Istanbul Chamber of Commerce Investigates Istanbul’s Labor and Employment Structure

By Tamer ÇERÇ?
ITO Vizyon

Despite absorbing 16.5 percent of overall employment in Turkey, with its boomed population of 12 million, the unemployment rate in Istanbul is 11.2 percent. In other words, one fifth of all unemployed are living in Istanbul. If we are to include the number of inert labor, seasonal workers and those ready to work but are not seeking job within the definition of unemployment, this rate is doubled both in Turkey and Istanbul. In order to develop the welfare of Turkey and Istanbul, expansion in additional employment for not only unemployed, but also the wider mass that is not included in labor market is indispensable.

Migration and rapid urbanization, being amongst the most important issues of Turkey and Istanbul, are at the same time causes for the change of nature in the issue of employment. Notably, excess rural labor that have been in the status of hidden unemployed, turned into bare unemployed as they moved into cities. Or else, they settled in marginal jobs and this resulted with the emerging of a new type of unemployment. Problems faced by Istanbul –economic and social center of the country, having increased labor supply with its increasing population – have implications Turkey-wide.

High rate of population increase, deficiency in capital accumulation, inability to sufficiently benefit from foreign investment, inadequacy in job creating investments, important portion of labor being unable to satisfy the needs of industry are all factors that now complicate the issue of unemployment more then ever.

Unemployment in Istanbul is 11.2 Percent

Istanbul Chamber of Commerce (ICOC) has conducted a study investigating Istanbul’s labor and employment problems at all points. The work prepared by Prof. Dr. Sedat Murat, “Istanbul’s Labor and Employment Structure from Past to Now” is published as a book. The book – structured under four main titles; Population and Labor Politics, Labor in terms of Scope, Employment and Unemployment, Underemployment and Improved Unemployment Rates – underlines a crucial fact for Istanbul and Turkey. The way to improve the welfare of both Istanbul and Turkey is through expansion of additional employment for not only unemployed, but also the wider mass that is not included in labor market. According to the research, despite absorbing 16.5 percent of employment in the country, unemployment rate in Istanbul is still 11.2 percent, as it keeps absorbing migration from all over the country and its population tops 12 million. The extent of the problem crystallizes if we consider that unemployment rate country-wide is 9.9 percent. Despite harboring a huge portion of investments and industrial facilities, Istanbul has the highest rate of unemployment. This is because, in the company of the enduring emigration, the rate of increase in labor supply stands higher then the demand for labor.

Migration Diminishes the Educated Population

Istanbul stands pretty good in terms of literacy when compared with country average. In fact, between 1970-2000, while nationwide literacy rate increased from 56.2 percent to 87.3 percent, this rate increased from 79.4 to 93.4 in Istanbul. Meanwhile, the rate of literates without graduation from any educational institution to elementary school graduates is lower in Istanbul. Also, in compassion to Turkey average, rates of middle and high school equivalent graduates and college graduates are higher in Istanbul.

 Yet, when we look at Istanbul’s share in Turkey in terms of population’s literacy structure, we observe that its quality is getting poorer. Indeed, Istanbul’s portion is increasing in; illiterates, literates without graduation from any educational institution and elementary school graduates. Whereas, there is decrease in middle, high school and equivalent schools and college and faculty graduates.

They Come With Hopes of Finding a Job

In the research, it is interesting to note the different reasons for migrating Istanbul with the rest of Turkey. For instance, for reasons of job seeking, dependence on family members and marriage, arrivals to Istanbul from other cities are more often then departures from Istanbul. On the other hand, for reasons of assignment, placement, earthquake and others, departures from Istanbul is more often then arrivals.

Meanwhile, two of the reasons strike attention as they indicate big differences for arrivals and departures; marriage and earthquake. Rate of people who move to Istanbul for reason of marriage (11 percent) is much higher then those who leave Istanbul (5 percent). On the other hand, the rate of people who leave Istanbul for the reason of the earthquake (8.8 percent) is much higher then those who move to Istanbul with the same reason (2.1 percent).

Generally, while migration to Istanbul is intensively from underdeveloped cities, migration from Istanbul is more towards developed and coastal cities.

State of Employment and Labor

In the research, the method of comparison between Turkey and Istanbul was also employed for analyzing labor and employment structure. Consequently it was observed that in Istanbul, among the people of working age, the rate of those not involved in labor was constantly increasing, and the rate of labor was decreasing. Aside from socio-economic and cultural factors, urbanization phenomenon is a big reason behind this. With urbanization, women become unpaid family workers, while children and youth lean towards education. Such changes of positions result with increase in population not involved in labor.

Three-fourths of Employed are Ages 22 to 25

In fact, both in Turkey and Istanbul the rate of those at working age but not involved in labor market are 52 percent, while the rate of those involved stands at 48 percent.

Categories of men, higher educated and those in mature ages have higher rates of workforce involvement then women, lower educated and those in smaller ages. On the other hand, both in Istanbul and Turkey the course of employment is increasing. As a matter of fact, Turkey-wide employment has increased from 18 million 522 thousand to 22 million 330 thousand between years 1980-2006. During the same period, the increase is noted as from 1 million 564 thousand to 3 million 677 thousand in Istanbul.

In terms of age groups, 75 percent of those employed are composed of adults between ages of 22-25. Speaking of education, most of those employed have low levels of education, most of which are lower than high school graduates (56.5 percent).

Unemployment is Higher in Istanbul

When data of Turkish Statistical Institute, which constitutes the reference for this research, is broken down, we see that underemployment, seasonal workers and those suitable for work but not seeking are not included within the scope of unemployment. It should be noted that if these categories were also included within unemployment definition, the numbers would be much higher then stated.

When we look at General Census and Household Labor Surveys, we see that between years 1980-2006, unemployment in Turkey has increased 255 percent, and in Istanbul 447 percent. According to these data, unemployment number in Turkey is 2 million 447 thousand, and in Istanbul 90 thousand 466. However unemployment rates tend to drop since 2004 both in Istanbul and Turkey. Based on 2006 data rate of unemployment in Istanbul is 11.2 percent, in Turkey is 9.9 percent.

One-fifth of Unemployed are in Istanbu

Yet, both increase in overall employment and decrease in unemployment rate do not seem to be enough in meeting social and economic problems. This is because the most important reason for Istanbul’s experience of unemployment is the prevalence of agricultural employment in Turkey. Since a significant portion of country labor is employed in agricultural sector in the form of family member help, joining of these people among the unemployed mass gets delayed.

On the other hand, commonness of underemployment in Turkey causes the unemployment rate to seem lower. Yet, despite this, Istanbul’s share in terms of total unemployment in Turkey is increasing. In 1980, Istanbul inhabited 13.1 percent of unemployed in the country. When we look at 2006 data, we see that this number has increased up to 20 percent. In short, one in every five unemployed is living in Istanbul. The picture looks worse when we disaggregate unemployment into age groups, for youth constitute the majority of unemployed. Both in Turkey and Istanbul, one third of all unemployed belong to 15 – 24 age groups. 

Qualified Labor is a Problem

From a developmental perspective, the striking fact is that for women as education level increases, level of employment decreases. Whereas for men, as education level increases unemployment decreases. Categories of professions at which Turkey-wide unemployed are seeking job can be listed as follows: artist and related jobs with 19 percent, service and sales person with 18.1 percent and 17.3 percent represent unqualified jobs. In Istanbul rate of people looking for job in art and related fields is 20.2 percent, those in the field of facility and machine operator or fitter are 17.4 percent, and those in service and sales person field is 15.7 percent.

These data show that most of job seekers are looking for qualified jobs. Yet this does not come to mean that they are qualified.