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Item Restricted Economic Analysis Effects of the Turkish Minimum Wage on Retail and Service Industries(2023) Yasin Emre Yilmaz; Mantel, Peter; Villegas, Erick Behar; Faculty of Business Administration; Berlin International University of Applied SciencesAI-GENERATED ABSTRACT: Abstract: The minimum wage is defined as the wage paid to workers for a normal working day and sufficient to meet the minimum level of the worker's compulsory needs such as food, housing, clothing, health, transportation, and culture (Kurtcebe and Horzum, 2017). According to Machin and Manning (1997), the argument in favor of the minimum wage is that it prevents the worst forms of exploitation in the workforce and raises the living standards of the lowest paid to the minimum acceptable level. The argument against it is that it may drive out low-skilled workers. This paper critically examines the impact of the minimum wage on Turkey's retail and service sectors over a 16-year period (2006-2023). Given Turkey's high minimum wage workers rate, this research is relevant and timely. The literature reveals a complex relationship between the minimum wage and various economic outcomes such as employment, wages, economic growth, inflation, and income distribution. Neumark and Wascher (2008), in a comprehensive review of the literature up to 2006, argue that the minimum wage has a more significant impact on the employment of low-skilled workers than on those with intermediate skills. In addition, Croucher and Rizov (2012) suggest that higher wages can motivate workers and increase productivity. On the other hand, Del Carpio and Pabon (2017) show that large increases in the minimum wage can increase unemployment and the prevalence of informal employment, with negative consequences for labor productivity and businesses through reduced investment in employee training and the loss of productive workers. The literature on the impact of the minimum wage has found negative effects, including job losses and reduced profitability, and positive outcomes, including wage increases and increased productivity. Draca and others (2006) conclude that the impact of the minimum wage on profits is quite small. Key findings include mixed perspectives in the literature on the employment effect, increased wages for low-wage workers, debates on the magnitude of wage effects, and conflicting views on productivity and profitability. Industry- specific characteristics and firm size are crucial factors in these assessments. The study also points to potential negative impacts on labor productivity and enterprises, especially small enterprises. Keywords: minimum wage, labor market, employment, wages, economic growth, inflation, income distribution, labor productivity, Turkey, service sector