Turkey, a country known for its strategic location and vibrant economy, has been grappling with a severe monetary crisis in recent years. The culmination of several economic factors, including high inflation rates, currency devaluation, and political instability, has significantly impacted various sectors, including employment. In this article, we will explore the profound consequences of the monetary crisis on employment in Turkey, shedding light on the challenges faced by businesses and individuals alike.
Decline in Business Activity and Investment
One of the most immediate impacts of the monetary crisis in Turkey is the decline in business activity and investment. Uncertainty surrounding the value of the Turkish lira and rising inflation rates have made it increasingly difficult for businesses to plan and make long-term investment decisions. As a result, many companies have reduced their expansion plans, leading to a slowdown in job creation and, in some cases, layoffs. The lack of new employment opportunities has put significant pressure on the job market, exacerbating the unemployment problem.
Rising Unemployment Rates
The monetary crisis in Turkey has caused a significant rise in unemployment rates. As businesses struggle to cope with the economic challenges, they resort to cost-cutting measures, including reducing their workforce. Many companies have downsized, laid off employees, or frozen hiring processes, leading to a surge in unemployment. This has been particularly detrimental to young people and recent graduates who are entering the job market during a time of economic uncertainty. The scarcity of employment opportunities has not only resulted in financial hardship for individuals but has also taken a toll on their overall well-being.
Informal Employment and Job Insecurity
The monetary crisis has also led to an increase in informal employment and job insecurity. With the decline in formal job opportunities, many individuals have turned to informal sectors or engaged in freelance work to make ends meet. While this provides some temporary relief, it often comes at the expense of job security, benefits, and social protections. Informal employment, which lacks proper regulations and oversight, leaves workers vulnerable to exploitation and prevents them from accessing social security benefits and other forms of workplace protection.
Economic Disparity and Income Inequality
The monetary crisis in Turkey has further widened the gap between the wealthy and the economically disadvantaged. As businesses struggle, low-income workers are disproportionately affected, facing higher unemployment rates and stagnant wages. This exacerbates income inequality and deepens the economic disparity within society. Moreover, the erosion of purchasing power due to currency devaluation affects the overall standard of living for many individuals and families, pushing them further into financial hardship.
Brain Drain and Emigration
The economic instability caused by the monetary crisis has prompted a significant number of skilled professionals and young talents to seek opportunities abroad. The phenomenon of brain drain, where highly educated individuals emigrate to more stable economies, has become a growing concern. The loss of skilled workers hampers the country’s ability to foster innovation, maintain competitiveness, and develop industries critical for economic growth. Furthermore, the emigration of young talents deprives the country of the potential to nurture a vibrant workforce and sustain its future development.
The monetary crisis in Turkey has had a profound impact on employment, leading to a decline in business activity, rising unemployment rates, an increase in informal employment, economic disparity, and the emigration of skilled professionals. The challenges faced by businesses and individuals alike in this economic downturn have highlighted the need for effective measures to restore stability, rebuild investor confidence, and stimulate job creation. Implementing sound monetary policies, fostering a favorable business environment, and investing in education and skills development can contribute to mitigating the negative consequences of the crisis and paving the way for a more robust and inclusive economy in Turkey.
Azkan Group can support you in your Employer of Record (EOR) and payroll requests (also called Umbrella Company) in Turkey. We can manage your HR requests even if you don’t have a legal entity in Turkey.