’Hopelessly jobless’ the real danger in Turkey
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by Şebnem Turhan - Referans
Oluşturulma Tarihi: Mart 19, 2009 00:00
ISTANBUL - Unemployment in Turkey is expected to rise further as the global crisis bites into the economy. But in terms of social stability, the real problem lies in the ’hopelessly jobless,’ those who have even lost the hope to find a job
Unemployment in Turkey, which has reached an all-time high of 13.6 percent in the three months through January, is ringing alarm bells for the future. But what is missing from the general picture is the rapid rise of the "hopelessly jobless," which might be the main reason behind social explosions.
The number of those who lost the hope to find a job after the 2001 crisis has quadrupled by 2004. The same threat is more grave today. From September last year to December, the number of "hopelessly jobless" has increased by 300,000 people.
According to economists, the latest jobless figures are just a start, as many say as of the first quarter of the year, unemployment rate may reach 15, even 16 percent. This is a figure that may not decrease even in 2010, provided growth will be at normal levels after the crisis.
Pessimistic predictions for the year 2009
According to İnan Demir, an economist at Finansbank, the economy will shrink 5.4 percent this year. Demir expects a contraction of 9.5 percent in the first quarter, adding that unemployment may reach 15 percent.
"As the contraction process is prolonged, the ranks of those who have lost the hope to find a job will swell. As they pull out of the labor force, we may see a relative stability in the unemployment rate. But it is certain that we will see much worse figures than those in 2008," he said.
In the 2001 crisis, the economy contracted 5.7 percent, while unemployment jumped from 6.5 percent to 8.4 percent. In the following years, Turkey could not liquefy this unemployment stock as the rate became chronic at around 10 percent. What kept the rate so high was, in part, the boom in the number of those who have totally lost their hopes to find a job, pulling out of the labor market. Those "hopeless" numbered at 73,000 in 2002 and at 84,000 in 2003, but in 2004, the figure exploded to 351,000. In 2005, the "hopelessly jobless" numbered at 549,000, while the figure rose to 663,000 and 641,000 in 2006 and 2007, respectively.
Foreseeing a contraction of 3 to 4 percent for the year 2009, Garanti Investment economist Gizem Öztok predicts a high contraction rate of 13 or 14 percent in the first and second quarters this year. Öztok’s unemployment rate estimate stands at 16 percent.
Jobless stock continues to accumulate
The pessimistic estimates show it will be hard to liquidate the accumulating jobless stock. "In 2010, with a growth of 3 percent, unemployment cannot retreat back to 10 percent," Öztok said.
Hakan Aklar, an economist at Ak Investment, predicted a contraction of 2.5 percent for 2009. "Unemployment will peak in June and July," he said.
In terms of social unrest, the number of "hopelessly unemployed" is the key. The figure stood at 817,000 as of December 2008, a 25.5 percent year-on-year increase.
The "hopelessly unemployed" numbered at 538,000 in September, the month regarded as the start of the crisis in Turkey.
Another factor that creates concern is the period of looking for a job. The first five months of unemployment are generally busiest months in this sense.
In December, those looking for a job for one to five months stood at 1.98 million, while the figure stood at 122,000 for those looking for a job since the past three years or more. The latest figure was 132,000 in November, meaning that 10,000 more might be listed in the following month as "hopelessly unemployed."
The number of those who lost the hope to find a job after the 2001 crisis has quadrupled by 2004. The same threat is more grave today. From September last year to December, the number of "hopelessly jobless" has increased by 300,000 people.
According to economists, the latest jobless figures are just a start, as many say as of the first quarter of the year, unemployment rate may reach 15, even 16 percent. This is a figure that may not decrease even in 2010, provided growth will be at normal levels after the crisis.
Pessimistic predictions for the year 2009
According to İnan Demir, an economist at Finansbank, the economy will shrink 5.4 percent this year. Demir expects a contraction of 9.5 percent in the first quarter, adding that unemployment may reach 15 percent.
"As the contraction process is prolonged, the ranks of those who have lost the hope to find a job will swell. As they pull out of the labor force, we may see a relative stability in the unemployment rate. But it is certain that we will see much worse figures than those in 2008," he said.
In the 2001 crisis, the economy contracted 5.7 percent, while unemployment jumped from 6.5 percent to 8.4 percent. In the following years, Turkey could not liquefy this unemployment stock as the rate became chronic at around 10 percent. What kept the rate so high was, in part, the boom in the number of those who have totally lost their hopes to find a job, pulling out of the labor market. Those "hopeless" numbered at 73,000 in 2002 and at 84,000 in 2003, but in 2004, the figure exploded to 351,000. In 2005, the "hopelessly jobless" numbered at 549,000, while the figure rose to 663,000 and 641,000 in 2006 and 2007, respectively.
Foreseeing a contraction of 3 to 4 percent for the year 2009, Garanti Investment economist Gizem Öztok predicts a high contraction rate of 13 or 14 percent in the first and second quarters this year. Öztok’s unemployment rate estimate stands at 16 percent.
Jobless stock continues to accumulate
The pessimistic estimates show it will be hard to liquidate the accumulating jobless stock. "In 2010, with a growth of 3 percent, unemployment cannot retreat back to 10 percent," Öztok said.
Hakan Aklar, an economist at Ak Investment, predicted a contraction of 2.5 percent for 2009. "Unemployment will peak in June and July," he said.
In terms of social unrest, the number of "hopelessly unemployed" is the key. The figure stood at 817,000 as of December 2008, a 25.5 percent year-on-year increase.
The "hopelessly unemployed" numbered at 538,000 in September, the month regarded as the start of the crisis in Turkey.
Another factor that creates concern is the period of looking for a job. The first five months of unemployment are generally busiest months in this sense.
In December, those looking for a job for one to five months stood at 1.98 million, while the figure stood at 122,000 for those looking for a job since the past three years or more. The latest figure was 132,000 in November, meaning that 10,000 more might be listed in the following month as "hopelessly unemployed."