Turkish Jobless Rate Fell to 8.8% in May to July
bloomberg.com
By Steve Bryant
Sept. 20 (Bloomberg) -- Turkey's jobless rate fell to 8.8 percent in the three months through July as service industries such as retail and banking stepped up hiring after 18 consecutive quarters of economic growth, the statistics agency said.
The rate decreased from 9.1 percent in the same period of last year, the Ankara-based statistics agency said on its Web site today. About 23.2 million people were employed, compared with 23.1 million a year ago.
Turkey's service industry is employing many of the people who leave agricultural work to migrate to the cities, and the one million teenagers who join the working age population each year. The jobless rate was unchanged from the month-earlier period, at the lowest since at least January 2005.
``The Turkish economy is growing at a good pace and we can see that in some sector employment rates,'' said Nurhan Toguc, economist at Ata Investment in Istanbul. ``However, with so many entering the workforce every year, Turkey needs to grow at above 6 percent to make an impact on unemployment.''
Prime Minister Recep Tayyip Erdogan said on Sept. 14 that the drop in unemployment to 8.8 percent in the second quarter, the lowest level since a new measurement system was introduced in January 2005, showed growth was having an impact on jobs.
Gross domestic product will grow at above the target rate of 5 percent this year, Economy Minister Ali Babacan said in Singapore today. The economy expanded 7.5 percent in the second quarter.
Non-Farm Jobs
Non-farm jobs increased 857,000 in the three months through July compared with the previous year, the statistics agency said today. Agricultural jobs fell by 715,000.
``I don't see an encouraging picture because the labor market is going through a structural change,'' said Inan Demir, economist for Finansbank in Istanbul. ``Even if job creation in non- agricultural sectors is strong, it's only barely enough to absorb some of the new unemployed.''
The workforce participation rate, a measure of how many people of working age are in work or seeking employment, fell to 49.3 percent in the three months to July from 50 percent a year ago, the statistics agency said. While 72.3 percent of men of working age were working, or looking for work, only 26.6 percent of women were participating in the workforce.
Economists expect economic growth to slow in the second half of the year after the central bank raised the benchmark interest rate by 4.25 percentage points at three meetings since June 7 to support the currency and slow inflation.
Labor Laws
The Turkish economy created a net 6.2 million jobs between 1980 and 2004, while population growth required 24.1 million jobs, according to a World Bank survey in April.
Business leaders say that in addition to the demographic shifts, Turkish labor law, which awards for high severance pay, makes it too costly to take on employees.
The International Monetary Fund also says a national minimum wage of 380 liras a month ($258), which takes no account of differences in the cost of living between the wealthy west of Turkey and the poorer east, is driving many jobs into the informal economy.
``Unemployment is a major problem. It's a cancer here in Turkey,'' said Zafer Caglayan, head of the Ankara Chamber of Industry. ``This is what lies behind public order problems, behind terrorism and behind migration.'' |
