The Turkish Statistical Institute’s (TurkStat) income distribution statistics for 2023 have once again revealed the rapid deterioration in this area. According to the methodology applied in income distribution, living conditions and poverty statistics, the income on which the statistics are based belongs to the year before. The income data in the 2023 income distribution statistics actually belong to 2022. Therefore, the latest income distribution data should be evaluated within the 2002 data.
– The Gini coefficient, the most well-known indicator of income distribution, increased to 0.438 for household incomes. An increase in the Gini coefficient means an increase in income inequality. This figure is not only a record in the TurkStat data series that started in 2006, but also one of the worst in the world.
– Another indicator of income inequality is the ratio between the shares of the lowest and highest income brackets. The ratio between the highest and lowest income brackets in household incomes increased from 7.77 times to 9.20 times for 20 percent income brackets, from 14.22 times to 16.82 times for 10 percent income brackets and from 25.97 times to 30.57 times for 5 percent income brackets.
– Competing with the 2001 crisis year, these figures are the highest we have seen since the 2001 crisis. According to the 2002 income distribution data calculated with the incomes of the 2001 crisis year, the highest 20 percent income bracket had 9.46 times the lowest share, the highest 10 percent income bracket had 18.31 times the lowest share and the highest 5 percent income bracket had 35.23 times the lowest share.
– This calculation includes social assistance. If we exclude social assistance from the calculation, the income distribution based on households’ income is even more distorted. The Gini coefficient, which is 0.433 based on equivalent individual incomes, rises to 0.520 when all social benefits including pensions are excluded, and to 0.445 when social benefits other than pensions are excluded.
– According to household income, the lowest 5 percent share is only 7.9 percent, while the highest 5 percent share is 24.30 percent. According to equivalent individual income, the lowest 5 percent share is 9.3 per thousand, while the highest 5 percent share is 24.74 percent.
– More importantly, only the top 3 percent of the 5 percent have increased their share compared to the previous year. In other words, while the share of the bottom 85 percent decreased, the share of the top 15 percent increased even more.
– The problem is not only the decline in the share. The income of all the bottom 17 quintiles increased even less than the 12-month average CPI inflation. In other words, the income of 85 percent of the society has eroded even according to TurkStat inflation.
– The highest 5 percent income bracket has increased its share and income in real terms the most. The highest 5 percent income bracket also has the most distorted income distribution. In other words, if we do the calculation in 1 percent income brackets, it will become clear how terrible the picture is.
As a result, even in a year when the economy grew by 5.5 percent, the income of 85 percent of the society decreased in real terms. With this, income inequality has returned to the days when the Erdogan-AK Party government took over.