Does economic growth support the minimum wage? Evidences based in Turkey

Abstract. The effects of the growth performances over minimum wages are examined in this study. Minimum wage is a level of income which is determined by the government in order people to be able to maintain humanitarian consumption rate under the economic conditions in which they survive. Such an partial interference to competitive economics can affect many macroeconomic variables. In this study, the relationship between minimum wage and the growth performance is investigated within fast growing Turkish economy. The effects of minimum wage over employment and how the employment rate changes by the effects of minimum wage increases reflect to the growth processes is depicted. After the applied tests, the results are acquired as there is co-integration relationship in the long run between minimum wage and the growth and Granger causality occurred in double direction. Keywords. Economic growth, Minimum wage, Employment, Unemployment. JEL. F43, E24, J31.