of all the collective agreements during this time involved establishments in the public sector, reflecting the government's policy of encouraging collective contracts.

CONDITIONS OF EMPLOYMENT

The Ministry of Labor operates an employment service with branch offices throughout the country that serve as clearing houses for labor recruitment. The employment offices maintain current files of openings and applicants, and actively canvass employers for possible job vacancies. The employment offices have interviewers who evaluate and record the qualifications claimed by applicants, but the country has no general system of job classification relating to degrees of skill and responsibility.

Only a few private enterprises maintain personnel offices that actively engage in recruiting. Resort to newspaper advertising for workers is limited to those with special skills. Private labor contractors who operate for a commission and recruit casual, unskilled labor for agricultural and construction work are important in many rural areas. Much recruiting is based on information concerning specific openings or individual applicants, passed on byword of mouth in the local teahouses or other gathering places.

The first month of a new employee's service is a trial period during which his performance is evaluated. If he fails to measure up, he is discharged. After 30 days the worker gains permanent status under the Labor Code, and a number of rules about notice, severance pay and tenure make it difficult or expensive for an employer to discharge him. The employee, for his part, is required under the law to give certain notice before quitting his job, and if the legal formalities are not observed a new employer may be held liable for payment of compensatory damages to the old employer.

In general there is a free market for the Turkish labor force and there are no rules or restrictions on movement within the country to seek employment. To engage in a profession, however, requires a license given only upon proof of ability. Employment opportunities for those who are not citizens are severely limited by legislation passed in the 1930's, reserving most gainful occupations to Turkish nationals.

The Ministry of Labor sponsors skill upgrading and apprentice training programs in conformity with a 1938 law requiring employers of more than 100 workers to conduct such programs outside working hours. On-the-job training is resorted to in order to qualify new workers for their particular assignments. Formal training programs are mostly limited to the larger industrial establishments, and in the mid-1960's the 1938 law on worker training was generally not observed.

Wage rates in the commercial and industrial sectors of the

economy are determined by interaction between the government and free enterprise, both of which compete in the labor market. The government in its state-owned enterprises has taken the lead in improving working conditions and in offering job security and fringe benefits. Private enterprise is not subject to the restrictions of a public budget, and with the resulting flexibility, private employers can offer higher wages if the occasion demands it, but less long-term security.

The government influences the entire country's wage levels indirectly by establishing rates for its own employees, and directly by prescribing minimum wages in certain industries and regions, under authority of the Basic Labor Code and implementing procedures set up in 1951. The minimum wage regulations, however, apply to only a small percentage of the total labor force. Of far greater importance are the wage policies of the government in the state-owned industries. These policies are necessarily responsive to political pressures. If the state grants wage increases to its industrial employees, privately owned enterprises generally find themselves obliged to follow suit.

A variety of allowances, bonuses, payments in kind, and free or low-cost services add to the stated wages earned by most commercial and industrial workers. These supplementary payments include seniority bonuses, housing allowances, family allowances, and wedding and funeral allowances. Efficiency bonuses, which are in fact a form of compensation to offset increases in the cost of living, are given periodically in all government establishments and in most private enterprises in place of wage increases. Consequently, most workers receive a number of extra pay checks each year (see ch. 4, Population and Labor Force).

State-owned industries generally provide one free meal per day, work clothing and free transportation. Medical care, hospitalization, and recreational facilities are often subsidized in the larger industries and made available to workers free or below cost. The extension of personal aid to individual workers in cases of financial or health problems is standard practice. It is not possible to assign a monetary value to many of the supplemental benefits, but their contribution to real wages can be substantial.

Civil service employees and white-collar workers in the stateowned industries are paid by the month, but the law requires both the government and private employers to pay manual workers weekly unless the worker requests a longer interval. Income taxes are deducted from payrolls by employers and in some of the larger industrial plants the work contracts provide for checkoff of union dues. In enterprises covered by the Labor Code, a worker's share of the premiums due on his social insurance is collected by payroll deduction.

WELFARE AND BENEFITS

The Labor Code and related legislation establish standards to govern working conditions and practices that are well abreast of modern concepts. The standards, however, are not fully reflected in actual practices, either because the Labor Code may not apply to a particular economic activity, or because of a lack of funds or other obstacle to full enforcement. In its general provisions the Code establishes a basic 40-hour week, regulates overtime and overtime pay, and provides for daily rest periods and weekly rest days. Night work and the work of women and juveniles are regulated, and paid national holidays and annual vacations are prescribed.

The Basic Labor Code and the Public Health Act of 1930 make provision for the health and safety of workers. Working establishments must conform to specified hygienic and mechanical safety standards, and are subject to periodic inspection. First aid equipment must be kept available in all establishments covered by the Labor Code, and under the Public Health Act, firms employing 50 workers or more must have a doctor in attendance if the work is deemed hazardous. A dispensary is required where more than 100 workers are employed, and establishments with more than 500 workers must have a hospital. In practice most establishments make medical facilities available but these do not always fully meet the specified requirements.

Both the state-owned enterprises and the larger private establishments provide many services and facilities for their employees. A large factory or mine may become the nucleus of a nearly selfcontained community with company housing and retail shops, libraries, theaters, schools, medical and recreational facilities. These services have generally been developed in places where none existed before the enterprise was established.

The Worker's Insurance Institution, under the Minister of Labor, is the main social insurance instrumentality in the country. Its programs cover most permanent workers subject to the Labor Code, excepting white-collar government employees, career military personnel, and certain limited groups, such as railway employees, who have their own insurance programs. The Workers' Insurance Institution was formed in 1945 and since then has extended the coverage of its programs to include workmen's compensation for industrial accidents and diseases, maternity and sickness, benefits, old-age pensions, and disability and survivor benefits. Participation by all eligible workers in these programs is mandatory. Premiums to support the Worker's Insurance Institution vary with the particular program but in general they total about 7 percent of a worker's wages, to which the employer adds twice that amount.

CHAPTER 22

DOMESTIC TRADE

Trade and commerce have kept pace with the expanding economy and usually contribute about 10 percent to the gross national product. Villagers continue to consume some of what they raise but are selling more and more of their produce in the market towns or to wholesalers who come to the villages. Production, distribution, and sales, particularly in the agricultural sector, are usually in accordance with traditional methods, and broad gaps continue to exist between production and distribution. The financial weakness of the farmer limits his ability to affect the market and generally forces him to sell all of his products at the time of harvest.

Domestic trade is limited by the fact that a majority of consumers have little purchasing power. About 75 percent of the consumers live in the smaller towns and villages, and do not command enough income to purchase many durable consumer goods. Because of the structure and stage of development of the economy and low incomes, effective demand is limited.

Business, in general, and retailing and wholesaling, in particular, have been looked down upon as professions. Traditionally such enterprises were the domain of Jews, Armenians, Greeks, and Italians. Although this belief is slowly disappearing it is still prevalent; no great business heroes have emerged in Turkey and few entrepreneurs have gained social recognition. Corporate enterprise, as its exists in Western societies, still has little standing in Turkey.

In the past 40 years there have been considerable changes in the structure of business enterprises in Turkey. Under the Ottoman Empire and during the 1920's businesses were almost entirely privately owned, tightly knit family organizations. Practically none of these enterprises had outside, professional management because each family head was his own manager. Most people lived in agricultural villages where they produced almost everything they needed and retail trade was predominantly barter.

In the early 1930's Atatürk's economic reformers developed a relatively new system. It was based on a mixed economy combining private enterprise and public ownership. State holding

companies, such as the Sümerbank and the Etibank, became dominant forces in many industries including steel, cement, paper, textiles, tobacco, and chemicals. This gave competition to private businesses, and a new managerial class sprang directly from the state enterprises. Most of its members were trained as engineers and learned management on the job. Private enterprise, though temporarily staggered, was soon revitalized and able to compete on an equal basis. By the mid-1960's about 51 percent of the country's gross national product was turned out by private enterprise, while 49 percent came from the public sector (see ch. 20, Industry).

The progressive liberalization of attitudes toward trade combined with expanding internal markets and the developing cash economy have produced a new Turkish commercial class. In modern Turkey the entrepreneur is sensitive to the appeal of economic opportunity and, therefore, highly mobile. He is usually attracted away from the village by the greater economic opportunities of the city. If he becomes successful, he tends to gravitate toward Istanbul or Izmir. However, strong ties are usually maintained with relatives and customarily the family's own means are used to finance an establishment or its expansion. Success is often based on strong family relationships and the entrepreneur has to be introduced and backed if he is to become successful.

ORGANIZATION OF TRADE

The Commercial Code of Turkey establishes the types of business organizations recognized in Turkey and the rules governing such organizations. All commercial activity comes within the jurisdiction of the Code and must be registered with the Commercial Court Registry established by the Ministry of Justice.

In addition to individual proprietorships the country's business organizations include simple partnerships with each partner fully liable for the debts of the joint enterprise, limited partnerships of several sorts and stock corporations. In a stock corporation the capital is divided into shares, and the total capital may not be less than LT500,000 (LT9.00 equals US$1.00-see Glossary). At least five founder shareholders are required to establish a corporation and shares may be bought and sold.

The authorities do not discriminate against enterprises owned or operated by foreign interests. In fact in order to attract foreign investment in industry, the government offers incentives such as tax rebates on exported goods, depreciation allowances, and guaranteed repatriation of capital and profits. A promotional organization within the Union of Chambers of Commerce and Industry gives assistance to industries seeking foreign capital participation.