The Politics Minimum Wage in Indonesia and Turkey

• In Event: The Politics of Redistribution in the Global South

Abstract

Scholars have explored the factors that cause governments to increase spending on progressive social policies, but less is known about the politics driving the expansion of some redistributive policies, such as the minimum wage, which do not require government expenditure. Through a comparative analysis of minimum wage negotiations in Indonesia and Turkey we show that incumbents are more responsive to the labor movement’s demands for large minimum wage increases when there is an election on the horizon. Our extensive field research in both countries also reveals how regime type and the level at which minimum wage negotiations take place affect the opportunities and constraints that incumbents and the labor movement confront. Indonesia is a democracy, at least in the minimalist sense, while Turkey has become increasingly autocratic over the last fifteen years. One might expect democratic governments to be more likely to sign off on large minimum wage increases, but as the Turkish case demonstrates, more autocratic governments have also agreed to substantial raises. In addition, Indonesia is a highly decentralized polity, and wage negotiations are held at the district, municipality, and/or provincial level, while in Turkey minimum wage setting is highly centralized. These differences in institutional setting also affect the politics of minimum wage setting by creating different opportunities and constraints for both the labor movement and incumbents.

Authors

• Teri L. Caraway, University of Minnesota, Twin Cities

• Ibrahim Oker, University of Minnesota, Twin Cities