Millions of retirees are looking at the minimum wage increase.

The Minimum Wage Determination Commission is meeting in December. The increases in wages serve as a reference for retirees who receive an increase based on the inflation in January. While minimum wage increases are higher than those for retirees, unlike previous years, this year the increase for retirees has surpassed the minimum wage. So, what will be the percentage of the increase for retirees and minimum wage earners in 2025?

EYES ON JANUARY

Millions of citizens are focused on the salary increases to be made in January. While the inflation rates for the last 6 months are awaited for retirees, minimum wage earners are calculating based on the year-end inflation. Civil servants are also waiting for the 6-month inflation figure for the difference they will receive along with the collective bargaining increase. Outside of these groups, there is also a segment curious about the increase rate for civil servants, which includes those receiving social assistance. Many social benefits such as the 65-year-old pension, disability pension, and home care allowance will also increase in line with the rate of increase for civil servants.

INFLATION CALCULATION

According to a report by Yeni Asır, the inflation rate for October was calculated to be 12.06% over a 4-month period. Now, with the addition of the inflation rates for November and December, the 6-month rate will emerge. This rate will indicate the inflation increase for SSK and Bağ-Kur retirees, while also showing the inflation difference for civil servants and retired civil servants. The rate that will be formed for civil servants will also increase social support at the same rate.

HOW IS IT DETERMINED?

When determining the minimum wage, inflation figures do not have a direct impact. In fact, the exact figures regarding inflation do not emerge in December. However, the predictions made throughout the year regarding inflation rates come to the bargaining table as the most important data when determining the minimum wage. Looking at previous years, it is generally seen that increases are made above inflation figures.

DOES MINIMUM WAGE AFFECT RETIREES?

The wage increase rate announced by the Minimum Wage Determination Commission, which meets in December, also serves as a reference for retirees and civil servants who receive an inflation increase in January. The decision on whether to add a welfare share to the 6-month inflation that emerges for retirees and civil servants is influenced by the rate of increase in the minimum wage.

HOW DID THE INCREASE OCCUR?

Looking at the last 5 years, it is seen that minimum wage increases have occurred above the annual inflation rate. Especially with the interim increases in 2022 and 2023, it is observed that the minimum wage increase reached rates of 100% and exceeded the actual inflation.

ADDITIONAL INCREASE FOR RETIREES

Again, when looking at the increases in retirement salaries in recent years, it is seen that some additional payments and welfare shares have been added outside of inflation increases. In the years 2022 and 2023, when the minimum wage was determined twice, increases above inflation occurred with the welfare share, and it is seen that the cumulative increase has exceeded 86% when combined with the welfare share in January.

CLOSE RATIOS

When looking at the minimum wage and retirement increases made in recent years, it is generally seen that similar ratios emerge. Especially after the minimum wage was determined every 6 months in 2022 and 2023, it is observed that the welfare shares added to retirees and civil servants are close to these increase rates. In periods determined annually, it is seen that minimum wage increases have occurred slightly above the inflation increases given to retirees. Thus, it is observed that both retirees and minimum wage earners have received increases above inflation.

THIS YEAR WILL BE A FIRST

The Commission will begin its meetings in December to determine the minimum wage for 2025. It is expected that the inflation at the end of this year will be around 44%. Based on this rate, it is predicted that the 6-month increase for retirees will be around 15-16%. The increase in the minimum wage is also expected to occur between 35-40%. If the formulas from previous years emerge, a welfare share is expected for retirees. In 2024, since the minimum wage was determined annually, it appears that the cumulative increase given to retirees has fallen short. Thus, for the first time this year, the increases for retirees have surpassed the increases in the minimum wage.

WHAT WILL THE WELFARE SHARE BE?

If the minimum wage increase occurs between 35-40%, it is expected that the welfare share for retirees will be between 5-10 points. In this case, it will be possible for the 6-month inflation increase to rise to the 2025 rate along with the welfare share.