Research Institute of the Confederation of Progressive Trade Unions of Turkey (DİSK-AR) has evaluated the November 2018 Household Work-force Survey published by Turkish Statistical Institute (Turk-Stat) on 15 February 2019, January 2019 data published by İŞKUR (Turkish Employment Agency), November 2018 insurant statistics published by SSI (Social Security Institution), and January 2019 data published by the Ministry of Family, Labor and Social Services (AÇSHB).
The severe impact of economic crisis on employment is gradually becoming more visible. Employment is almost crashing. While the number of unemployed people has increased by more than 700 thousand last year, employment figures have dropped by one million during August-November 2018. Unemployment is hitting new highs as a result of the recession in industrial production and growth. All the labor market data published by institutes such as Turk-Stat, SSI, AÇSHB and İŞKUR indicate that the crisis has caused a substantial rise in unemployment and this trend will continue.
NARROW UNEMPLOYMENT RATE AT 4 MILLION
While narrow unemployment rate has reached 4 million, broad unemployment has exceeded 6,6 million. Narrow unemployment rate has increased by 706 thousand, going from 3 million 275 thousand to 3 million 981 thousand between November 2017 and November 2018. As a result, the number of unemployed people subject to the narrow definition of unemployment has hit the 4-million threshold.
On the other hand, broad unemployment rate has increased to 6 million 646 thousand, rising by 665 thousand compared to the rate of November 2017, which stood at 5 million 981 thousand.
Considering that unemployment rates still reflect the data of November, it can be predicted that the major cutback in industrial growth in December 2018 will translate into a heavier impact on unemployment figures of December 2018.
BROAD UNEMPLOYMENT RATE AT 6 MILLION 646 THOUSAND
While the broad unemployment rate was 5 million 981 thousand in November 2017, it has increased by 665 thousand in one year, reaching 6 million 646 thousand. 522 thousand people within the broad employment rate are discouraged job-seekers, while 1 million 614 thousand people do not seek any job yet are available to work. Time-related underemployment stands at 406 thousand, whereas the number of seasonal workers is 133 thousand. The total of these five different types of unemployment yields the broad unemployment rate.
What is Narrow Unemployment?
Persons not working at any job during the reference period (with no work performed in return for bonus, per diem, with or without remuneration and no affiliation with such work) who are 15 years or older and who have used at least one of the job search channels in the last 4 weeks and are available to start working in 2 weeks are defined as “unemployed” by Turk-Stat. Before 2014, the reference period was considered as “last 3 months” instead of “last 4 weeks” in job search criteria. Narrow unemployment rate is calculated as the ratio of the unemployed to the work force.
What is Broad Unemployment?
Narrowly defined (standard) unemployment rate does not demonstrate the status of labor market from all aspects. Due to the restrictions and problems of narrow/standard unemployment calculations, alternative unemployment calculations are needed to understand the real scope of unemployment.
Calculation of broadly defined unemployment consists of five components: 1) narrowly defined (standard) unemployed persons, 2) discouraged job-seekers, 3) persons who do not seek any job yet are available to work, 4) seasonal workers, 5) time-related underemployed persons. Broad unemployment rate, which is an alternative calculation for unemployment, is a method gradually becoming more common in labor economics.
Time-related underemployment: Persons who are employed during the reference week, who have worked less than 40 hours in total at their principal and other job(s) and intend to work for a longer time, and who are available to work more immediately if possible.
Not seeking any job/available to work: Persons who do not seek any job for various reasons but are available to start working in 2 weeks. They are further classified under two groups:
Discouraged job-seekers: Persons who have failed to find any job despite their efforts, or who do not seek any job as they do not believe they will find any job matching their qualifications but who have stated that they are available to work.
Other: Persons who do not seek any job for various reasons (seasonal working, being a housewife, being a student, having a regular income, retirement and inability to work etc.) but who have stated that they are available to work.
DRAMATIC INCREASE IN NON-AGRICULTURAL UNEMPLOYMENT
Non-agricultural unemployment rates (not seasonally adjusted) are rising rapidly. While non-agricultural unemployment was 12,2 in November 2017, it has become 14,3 in November 2018, increasing by 2,1 points. Having risen gradually since April 2018, non-agricultural employment has further climbed up during summer, reaching 13,5 in September, 13,6 in October and finally 14,3 in November. Non-agricultural unemployment rate demonstrates the grave situation of unemployment more clearly.
NON-AGRICULTURAL YOUTH UNEMPLOYMENT 26,2 PERCENT, WOMEN’S EMPLOYMENT 18,4 PERCENT
Economic crisis is raising non-agricultural unemployment rates for youth and women. Non-agricultural youth unemployment (between 15-24 years) increased from 22,1 percent in October 2017 to 26,2 percent in November 2018. While non-agricultural youth unemployment rate was standing at 19,2 percent in April 2018, it started rising during summer and hit 26,2 percent in November following a 7-point increase.
Non-agricultural women’s employment was 17,4 percent as of November 2017. While it fell to 15,8 percent in April 2018, it later neared 20 percent during the crisis. In November, non-agricultural unemployment rate for women resulted in 18,4 percent with a 1-point increase from the last year.
CRISIS DRIVES ALL TYPES OF UNEMPLOYMENT
Extremely high levels of unemployment impact all types of employment. Not only narrow employment, but all other types of employment are on the rise as demonstrated by dropping rates: Graduate unemployment from 12,2 percent to 13,1 percent, non-agricultural unemployment from 12,2 percent to 14,3 percent, women’s unemployment from 13,4 to 14,7 percent, NEET from 22,9 to 24,3 percent, broad unemployment from 17,6 to 19,3 percent, non-agricultural young women’s unemployment from 29,3 to 32 percent, NEET women’s unemployment from 32,6 to 32,8 percent. The highest increase in unemployment rates has occurred in youth unemployment and young women’s unemployment.
HIGHER UNEMPLOYMENT RATES DURING AKP RULE COMPARED TO PREVIOUS PERIODS
Unemployment rates during AKP rule have increased significantly compared to the previous period. While the annual average unemployment rate was 8 percent between 1988 and 2002, for which detailed Turk-Stat labor statistics are available, annual average unemployment rate during AKP rule between 2003 and 2018 resulted in 10,78 percent. Having seen a historical low of 6,5 percent between 1988-2002, unemployment rate hit the highest level of the period, which is 10,3 percent, due to the impact of 2001-2002 crisis.
Unemployment rate was standing at 10,3 percent as of the end of 2002, when AKP came to power, while it later increased to 14 percent as a result of the 2008 crisis. Therefore, AKP raised unemployment by around 3 points compared to the period of 1988-2002, when the majority of governments were coalitions. Despite major incentives and assertive discourses and ventures for employment mobilization campaigns, AKP governments have failed in the fight against unemployment.
Registered unemployment figures of İŞKUR show the number of job applications to İŞKUR which have not resulted in new hires yet. İŞKUR’s registered unemployment data are one of the most significant indicators of unemployment. Registered unemployment figures are on a dramatic rise due to the crisis.
INCREASE IN REGISTERED UNEMPLOYMENT BY 1.3 MILLION
Registered unemployment has increased by 1 million 318 thousand between January 2018 and January 2019. The number of registered unemployment applications filed to İŞKUR in January 2018 was 2 million 457 thousand, while it has rapidly increased starting from August 2018, reaching 3 million 775 thousand in January 2019. Therefore, the number of registered unemployment has increased by 54 percent overall in one year.
NUMBER OF REGISTERED UNEMPLOYED WOMEN EXCEEDS UNEMPLOYED MEN
It is observed that the number of unemployed people registered at İŞKUR has been rapidly rising in the last years. While there were 2,1 million registered unemployed individuals in 2015, this number later increased to 2,6 million in 2017, to 3,5 million in 2018 and finally to 3,8 million in January 2019.
Significant gender differences are observed in the number of registered unemployment. Women gradually opt more for applying to İŞKUR. In the past years, there were much fewer registered unemployed women than registered unemployed men. For example, there were 431 thousand unemployed women in contrast to 1 million 42 thousand unemployed men registered at İŞKUR in 2010. The gap between women and men has gradually closed, and finally in 2018, the number of registered unemployed women has exceeded men: 1 million 805 thousand women versus 1 million 704 thousand men. As of January 2019, there are 1 million 932 thousand registered unemployed women, while the number of registered unemployed men stands at 1 million 843 thousand.
There may be several drivers of this increase in registered unemployment figures of women: Incentives granted for women’s employment in the last years, utilization of these incentives via İŞKUR, and gradually higher preference for women in İŞKUR’s active labor programs. It can also be concluded that the number of women on the labor market has increased due to the crisis, and their tendency to search jobs via formal channels has become stronger.
EMPLOYMENT EDGED DOWN BY ONE MILLION IN THREE MONTHS BECAUSE OF CRISIS
Economic crisis certainly reduces employment rates. While total employment was 28 million 515 thousand in November 2017, it fell to 28 million 314 thousand in November 2018, decreasing by 201 thousand. This shows that the economy has lost its capacity to create new jobs and begun a period of stagnation and recession. Recession between August 2018 and November 2018 is at an even more serious level. Total employment was 29 million 319 thousand in August 2018, while it later dropped by 1 million 4 thousand within three months, resulting in 28 million 314 thousand. Reduction of employment by more than 1 million in three months is such a critical situation that it cannot be only explained with seasonal effects. Besides, this reduction is also parallel to the decline in growth and decrease in industrial production by almost 10 percent.
Translation: Nilay Iğdır