Thoughts on min wage

[Reyntj]

So the min wage has gone up 16.95% in line with the cost of living..

Try to usd weakened 8.6 % in the same period..

The difference between the to is inflation with no currency change...almost 8.5 %...global inflation is not 17% per annum...in foreign currency terms prices have gone up 8.5% in 6 months alone...

Thats ridiculous & evidence that the constant increase in wages are causing inflation..

Turkey min wage 28000
Trnc 61000...
Rent food costs petrol are not more than double in trnc compared to turkey the country is broke why are they doing this?

Their argument is a of family four cant live on the minmium wage well thats true for most countries same as uk & turkey. So with turkey propping up trnc its allowing it...

Meanwhile the governent borrows billions in tl every month to just pay wages that it has no plan to pay back..i appreciate the west has a similar problem but trnc unrecognised status limits the lenders to local banks & turkey..it also cant print its own currency and bail itself out ..google has debt to gdp at 125 % ...the debt weakens trnc hand in any cyprus negotiation in either direction..someone has to bail them out at some point and they will call the tune..

[Hair Cut]

The problem is it's an economic Merry-go-round.

No one in the government understands what economics is. They should have stayed herding their goats.

The country is slowly sinking into the Med.....

[steveodp]

I don't understand why the minimum wage is for a family of four? It's one person earning, so surely it should be calculated to support one person? It's like they have combined minimum wage and child benefit. Is this common in other countries?

[Reyntj]

I compared to turkey on purpose as the argument they will make is many advanced countries like for example uk only 5 % of the population earn the minimum wage whereas here its more like 30-40% same as turkey...

Its pretty obvious that having a min wage higher than half of europe without the economy to back it up is going to be problematic for an unrecognised country...its the public salaries which also increase inline with cost of living thats the biggest problem..i think i read 80% of all government income goes to salaries pensions benefits it might be 100% now..to put it in context uk its 52% and im not saying uk is great..i cant see how that gets fixed theres a point where the borrowing has to stop?? Or huge austerity measures or a bail out or maybe they have a cunning plan ...baldrick style...tax increases inevitable.

[alphamike]

We've all being saying it's been unsustainable for years, but still they carry on, and every time they rise the min wage, we have this conversation all over again.

[kibsolar1999]

if you think a (minimum) wage of say 1000 gbp brut for eg waiters will increase inflation... then explain why a piece simple (and not even good cheese) cake in a cafe costs 9 or 10 euros, as in germany no waiter would work for 1000 euros net, but you never pay more than 5 or 6 euros.
and why they want for a stupid, cheap made Hambuger with half burned chips in a really not brilliant beach bar 15 euros, or 3 euros for a NEScafe?
aso, aso.
the minimum wage is NOT the reason for these high prices!

[Reyntj]

Compare with turkey not germany...basically the locals here are over egging things to the realities of the economy for both salary & pricing..

And there are many european countries where waiters getting paid less than 1000 euro .i agree with what you are saying but trnc gross min salary is now c 71000 tl over 1300 euro...not 1000 euro..compared to europe there are only 6 countries higher and 14 lower....

I agree with you..but both salary & prices should be lower..its common sense that if wages here are more than double than turkey prices will be higher...with the same currency..

They are in a tricky situation and debt to gdp is now120% to gdp or much higher and increasing..rising from c 50% in 2007...it seems to now to be approaching breaking point is my observation..with huge payments to pay the debt..i guess they know turkey will bail them out but this might finally come to a head.im not sure this is deja vu.

[kibsolar1999]

ok, compare with Turkiye... i know friends who will NOT travel to Turkiye any more as prices, eg, in restaurants trippled or even quadrupled in 4 years.. from, eg, 35 dollar for 4 to 100 or more.
because of the minimum wage?
and why i can buy turkish food (eg, Tukas, or others) in a turkish shop in germany cheaper as i can get in N.Cyprus?
and why i can get 1 kg, eg, Tschibo coffee in an offer for 15 (normal 20) euros, but here never below 35-40 euros?
so, many many examples which imo show that it seems that some squeeze the majority, or?
the rise of the minimum wage is a RESULT of that.
it is also no need to charge triple or more of that what a worker earns. the additional costs for the employer is not very much more as the brut minimum wage. also the workers can be "happy", as the deduction from brut to net for tax, health, unemployment, retirement money... is somewhat 20% only. far too low to make a system work.

[Reyntj]

Bulgarias gdp per capita is about the same as trnc...salaries need to match what income a country has per person..their gross min wage is €620 euro...

You cant blame people for wanting more money but it will likely come at a Cost as any bail out will come with consequences & exacerbates inflation

Gdp per capita in germany is more than double so theres more disposable income and everyones eating cakes has economies of scale competition and buying power.

[EnjoyingTheSun]

The country is caught in an endless unsustainable inflationary spiral. Unfortunately there is no painless solution. Problem is will any government dish out the painful and very unpopular medicine which will probably take at least 5 years to bear fruit when they realise they only have a shelf life of 18 months?
It’s like when you use a credit card to top up your unaffordable lifestyle. The minimum payment never covers the debt which keeps rising and eventually that minimum payment is also going to be un affordable.
Surely in these difficult times, the mainland Turkish voters will eventually baulk about continuously sending money to bail out a country that isn’t willing to cut its cloth?

[tutor4u]

Because of the chronic inflation experienced in Turkey from the 1970s through to the 1990s, the old lira experienced severe depreciation. Turkey has consistently had high inflation rates compared to developed countries: from an average of 9 lira per U.S. dollar in the late 1960s, the currency came to trade at approximately 1,650,000 lira per U.S. dollar in late 2001. This represented an average inflation of about 38% per year. Prime Minister Recep Tayyip Erdoğan had called this problem a "national shame". With the revaluation of the Turkish old lira, the Romanian leu (also revalued in July 2005) briefly became the world's least valued currency unit.


In late December 2003, the Grand National Assembly of Turkey passed a law that allowed for the removal of six zeroes from the currency, and the creation of the new lira. It was introduced on 1 January 2005, replacing the previous lira (which remained valid in circulation until the end of 2005) at a rate of 1 new lira = 1,000,000 old lira.

Following its introduction, the official name of the currency was the "New Turkish Lira", but according to the Central Bank, the word "new" (yeni) was only a "temporary" measure. A news agency reported that "new" would be removed on January 1, 2009. The same source also indicated that the banknotes would have "different shapes and sizes to prevent forgery". The issuance of a new highest denomination, 200 lira, was contemplated at the same time.

So That's how they solved the last economic fiasco, I wonder how they will solve this one? Join the EU and adopt the Euro?

[EnjoyingTheSun]

So That's how they solved the last economic fiasco, I wonder how they will solve this one? Join the EU and adopt the Euro?

I think the IMF loan, cutting public spending and the austerity measures helped too!

[frugal90]

this was shared on a facebook page

Bit more context Country Monthly Statutory Gross Minimum Wage (Approx. EUR)
Luxembourg €2,704
Ireland €2,391
Germany €2,343
Netherlands €2,295
Belgium €2,112
France €1,823
TRNC €1,387
Spain €1,381
Slovenia €1,278
Lithuania €1,153
Poland €1,139
Cyprus €1,088
Portugal €1,073
Croatia €1,050
Greece €1,027
Malta €994
Czechia €924
Slovakia €915
Estonia €886
Hungary €838
Romania €795
Latvia €780
Bulgaria €620

[Reyntj]

Thnx frugal..you dont need to be an economist to know that doesnt stack up...and cheescake would not be 10 euro if the the min wage was lower..

We have our own self interest at heart here...i understand why the politicians pander to the electorate i guess they bank on a bailout at some point..likely soon.from my point this is all.just.observation and stating how things are i certainly dont have any answers on how to run the country better..i do think this is now finally going to come to a head as the debt to gdp is getting to unmanageable levels and the tc might have played into erdogans hands...

[Reyntj]

https://haberkibris.com/guney-kibrista- ... -22_m.html

A tale of two cities..

Greek cyprus has a budget surplus..

Thats achievable when your wages are inline with your gdp per capita...

[Brazen]

https://haberkibris.com/guney-kibrista- ... -22_m.html

A tale of two cities..

Greek cyprus has a budget surplus..

Thats achievable when your wages are inline with your gdp per capita...

The governments here have blown the advantages of holidaying here rather than the south. Years ago the airfare was a bit more expensive and it took longer, but when here it was unspoiled by development, the locals couldn’t do enough for you and your money went a very long way. None of these things now apply so why would anyone want to come here unless they have bought property? It’s now far cheaper to go to the south and many are now doing that.
I just can’t visualise how things are going to change without them capitulating to the south and uniting on their terms. It cannot last.

[Reyntj]

Great summary brazen..Also confirmed by the recent stats..

https://haberkibris.com/otellerde-konak ... -17_m.html

Foreign (non turkish) hotel visitors now only makes up 13.7 % of visitors..turkish make up the rest my guess is mostly casino players...restaurants shops dont benefit here as they just fly in stay in hotel then leave..the foreign visitors has fallen c 25 %.....if turkish citizens get visa liberalisation trnc will suffer as they will have more options ..i guess the fall was also due to iran throwing the odd drone via lebanon..i agree i cant see prices falling.there are tourists for this price bracket but trnc has to up its game if it wants to compete with other higher priced alternatives...like london paris new york dubai marbella maldives etc...

[frugal90]

i agree, the "product" is not good "value"!


So people will seek elsewhere unless there is change

[kibsolar1999]

Thnx frugal..you dont need to be an economist to know that doesnt stack up...and cheescake would not be 10 euro if the the min wage was lower..

in germany the min wage is 2343 euros ,but as i said, the cheesecake costs 5 euros.
yesterday i had a good one for 3,80 + a Lavazza cappuccino for 3.
imo the rise of the min wage is a reaction to the high inflation, not the reason.
how you want to make a family living in TRNC if two full working have an income of 1240 euros?
as so often, it is easy to blame the poor... heyaaaa, they are resposible for the high inflation!!! cut the wages!, that we can have our cheesecake for 9,50.

[Groucho]

Thnx frugal..you dont need to be an economist to know that doesnt stack up...and cheescake would not be 10 euro if the the min wage was lower..

in germany the min wage is 2343 euros ,but as i said, the cheesecake costs 5 euros.
yesterday i had a good one for 3,80 + a Lavazza cappuccino for 3.
imo the rise of the min wage is a reaction to the high inflation, not the reason.
how you want to make a family living in TRNC if two full working have an income of 1240 euros?
as so often, it is easy to blame the poor... heyaaaa, they are resposible for the high inflation!!! cut the wages!, that we can have our cheesecake for 9,50.

It's also worth noting that KKTC wage rates are minimal influence on mainland Türkiye rates. The working population in the north is a drop in the ocean in comparison to the mainland.

[Reyntj]

Kibsolar you got that wrong ...1 full time worker gets 1240 euro..2 is double that..2480 euro per month net

Most of the locals wont work for that...government jobs are.much more...

Its not blaming the poor its simple economics countries like bulgaria for example have lower salaries to match gdp per capita or they go broke ..its an observation and basic economic theory. You have framed that wrong im not blaming the poor im stating the facts. The country is paying out almost 100 % of revenue in salaries its unsustainable.

Giving people more money without increasing production leads to inflation is also a basic economic theory .not sure what your hunch is based on.

Salaries in turkey are half here...if your running a business with many staff like a restaurant for example do you not think prices can be cheaper ..???? Ive just been to elbistan a shave is 200 tl its 500 tl here...according to you thats nothing to do with salary difference...id like to know the rationale on that one ....

[Reyntj]

Have you not noticed immediately after.min wage rise all.the price increases...you.must.have your head.in the sand the last 5 years...my aidat has just gone up 16.95 %. ...funny that its linked to.min wage rise..and according to you thats not the cause of any inflation

[kibsolar1999]

Kibsolar you got that wrong ...1 full time worker gets 1240 euro..2 is double that..2480 euro per month net

Most of the locals wont work for that...government jobs are.much more...

Its not blaming the poor its simple economics countries like bulgaria for example have lower salaries to match gdp per capita or they go broke ..its an observation and basic economic theory. You have framed that wrong im not blaming the poor im stating the facts. The country is paying out almost 100 % of revenue in salaries its unsustainable.

Giving people more money without increasing production leads to inflation is also a basic economic theory .not sure what your hunch is based on.

Salaries in turkey are half here...if your running a business with many staff like a restaurant for example do you not think prices can be cheaper ..???? Ive just been to elbistan a shave is 200 tl its 500 tl here...according to you thats nothing to do with salary difference...id like to know the rationale on that one ....

no, i did not got that wrong. (in bulgaria) 2 x 620 are 1240. (btw, in TRNC 2 x 1387 makes 2774, not 2480)
would the prices in TRNC would go down by 50%, which would be needed that you can get the same for your income? never. you have to tighten other screws to raise income, eg, to pay salaries. maybe proper taxing? fight eg, VAT fraud? other ideas? i dont know.
"living like in Elbistan" can not be the solution. imo, Elbistan in south-east Türkiye is not really the place to be, or?
you also get one thing wrong:
in many countries the "min wage" is a tool to avoid dumping, eg for foreign workers (bulgarians working in germany)
not many locals work for that.
thats different to TRNC where even managers work for min wage , + bonus , to avoid higher taxes.

btw, shop price rises do happen every month, just days before the salaries are payed, although their own staffs salaries do not go up. funny, or?

[Reyntj]

Seems to be digressing and going round in circles..

Im not trying to make anybody poor .

The main point which i keep repeating is that trnc is paying higher salary than its gdp per capita and its unsustainable countries who do that go bust and this is an extreme example..and bulgaria has a similar gdp per capita for example.and thats why i mentioned it .you can continue digressing about not living in elbistan etc but i clearly mentioned that to demonstrate salaries making a difference in price which according to you dont ...seems you just want to have an argument...goodbye