ABSTRACT
Introduction This chapter aims to discuss the implications of the growth pattern in Turkey for labor in the post-1980s period. The adjustment of wages and changes in functional income distribution in favor of capital has played a central role in relieving the pressures over profits during Turkey’s integration to the global economy. Furthermore the episodes of crises resulted in further distributional shocks at the expense of labor. Turkey’s post-1980 growth pattern, which is dependent on financial capital flows and generates cycles of boom and bust, as in the cases of the crises of 1994 and 2001, whose distributional outcomes were not neutral for labor vs. capital. This chapter will discuss the dynamics behind these distributional shocks and their persistence by analyzing the trends in wages, employment and the wage share. The main hypothesis of the chapter is that there has been a striking continuity in terms of the distributional policy of different governments from the 1980s to the 2000s. The major institutional and political changes after the 2001 crisis have brought no break in the neoliberal line and anti-labor (pro-capital) incomes policy of Turkey. As Turkey goes through a phase when risks due to both domestic and international financial fragility are creating new economic turbulences since 2006, understanding the distributional and labor market consequences of financial crises is particularly important for policy-making. The rest of the chapter is organized as follows: the next section discusses the growth regime and the boom and bust cycles in Turkey. The third section discusses the dynamics of functional income distribution with a focus on the share of wages. The fourth section presents the employment and unemployment trends. The fifth section discusses the institutional aspects of the labor market and the sixth section concludes.
