Erdogan’s cure for Turkey’s high unemployment
Turkey’s economy has not been doing very well lately. Unemployment is high, coming in at 11.1% for January, while youth unemployment is at 19.2%. In March there was a budget deficit of $2.4 billion, and a deficit of $8.4 billion since the start of the year. Inflation is also high, with the CPI measuring 7.5% in March.
The causes of Turkey’s economic woes are manifold. The sanctions by Russia, the end of QE by the US Federal Reserve, a low intensity civil war involving the PKK and structural problems (i.e. the lack of a true free market, corruption, etc.) are all contributors. Such problems, coupled to political developments in Turkey do not suggest the likeliness of an easy or simple solution.
However, Erdoğan, being the sultan that is he, cannot allow his neo-Ottoman Empire to have such poor economic activity and as such must come up with some solution, however ill conceived it may be. Erdoğan’s solution to high unemployment in Turkey is so simple that I am shocked I haven’t heard it presented before (although maybe it has been).
Speaking before the Union of Chambers and Commodity Exchanges of Turkey (TOBB), Erdoğan advised them “If each member here hires one more person, we can create 1.5 million new jobs for unemployed people.” In other words the solution to unemployment is arbitrary employment. Even the FED has thought of this brilliant solution to the problem of unemployment: just ask, or in the worse case demand or mandate, business to hire more people.
Erdoğan went on, “Will you go bankrupt if you hire one more person? No, you will have a bumper business when you do this. Money stays in the world behind us when we die. People should use their money to open employment opportunities to others.”
I will leave it to the readers it ponder whether Erdoğan’s idea is economically sound or specious. Yet, if it is so advantageous for businesses to hire people merely for the sake of employment, then why haven’t business people, who would supposedly benefit significantly from this, not have figured this out already?