Unseen Struggles: Child Labor and Informal Employment in Istanbul's Grey Economy

As Turkey hosts millions of Syrian refugees, the issue of informal employment, particularly in the textile industry, continues to pose significant challenges. Hindered by language barriers and bureaucratic obstacles, an overwhelming 95% of working Syrians in Turkey find themselves employed informally within the gray economy. This precarious employment situation not only leaves Syrian workers vulnerable to exploitation, low wages, and lack of social security and benefits, but also exacerbates existing tensions within the labor market, as different social and ethnic groups find themselves competing for limited resources.

The Dual Labor Market in Turkey and the Role of the Informal Sector

According to data from TurkStat, one in every three Turkish workers is employed unofficially.[1] High labor costs, relatively high minimum wages, and a low level of worker skills have engendered a dual labor market in Turkey. In this dualistic system, those employed informally find themselves working under harsh conditions, irrespective of their nationality. Most notably, an astounding 95% of working Syrians in Turkey are employed informally within the gray economy.[2] There are frequent media reports highlighting the plight of Syrian refugees working in textile and clothing workshops often situated in "basements under the stairs". It's a well-known fact that these clothing workshops employ a significant number of unregistered Syrian workers, including Syrian children aged 8-10 years.[3]

The Plight of Syrian Workers in the Turkish Gray Economy

Approximately one-third of the Turkish economy is deemed informal or "gray". This economic characteristic enables Syrians to secure employment rapidly, bypassing the red tape associated with obtaining work permits, or to establish small businesses without having to negotiate complex bureaucratic processes and exorbitant fees. However, the informal nature of this sector of employment comes with significant issues for Syrians. Syrians find themselves in competition with local residents for low-paying jobs in the already constrained labor market in Turkey. Syrians are often expected to work 3-4 hours longer than their Turkish counterparts. This situation sets different ethnic and social groups against each other while Turkish industry capitalizes on the availability of cheap labor.[4]

Worker Exploitation and Wage Disparities in the Informal Sector

The prospect of employing newcomers informally proves attractive to employers who can thus evade paying taxes and making contributions to the social security system. The negative repercussions are particularly noticeable in sectors where lower-qualification informal work is prevalent. Given that Syrians generally lack the requisite Turkish language and communication skills, their impact on employment in the formal sector, where higher skills are demanded, is minimal.[5] However, in the textile industry, the influx of Syrians appears to assist employers in filling positions that Turkish workers are disinterested in. Employers applaud the arrival of informal Syrian labor, but seldom acknowledge that the disinterest from local workers stems from poor working conditions and low wages.[6]

In the informal sector, it's estimated that for every 10 Syrians employed (in part-time work), jobs for 4 locals are eliminated, and the continued influx of Syrians suppresses wages.[7] The arrangement on wages between the employer and employee prior to the commencement of work is a commonplace practice in the gray economy. With regard to non-payment of the agreed wage, Turkish employees seem to bear the brunt of the issue. According to a study by the organization Birleşik Metal, while 17% of Syrians receive a lower salary in the textile sector than agreed with the employer, up to 30% of Turks fail to receive their salary at the agreed level.[8]

The Role of Employers in the Exploitation of Syrian Workers

According to Ayşegül Kayaoğlu, Turkish employers lament the perceived necessity of employing Syrians, with many doing so out of a sense of sympathy for their plight. However, they contend that they are compelled to pay Syrians lower wages because they work less efficiently than Turks, a sentiment that stirs discontent among domestic workers who feel that Syrians are paid at par with them despite lacking the requisite skills and training. Some employers even complain that experienced Turkish employees leave due to this issue. However, from conversations with Turkish workers, it emerges that employers are exploiting the situation, and, according to Turkish workers, Syrians are not to blame for their reduced wages.[9]

The hiring of Syrians is seen by employers as a double-edged sword. As one textile factory owner stated, during a visit to the coordination center in Sultanbeyli to employ Syrians on his production line, the situation is beneficial for both parties: "We pay them less, but they need work, and it is our duty to help them."[10] Despite the exploitation and the difficulties, this system allows Syrian refugees to find work, albeit under precarious conditions.

The Impact of Informal Employment on Various Sectors

According to a survey conducted by the Turkish Red Crescent in 2018, 20.7% of Syrian workers in education are employed in irregular and informal jobs. In the agricultural sector, this rate is as high as 92% for employed Syrians.[11] Informal and irregular employment inevitably goes hand in hand with low wages, which are far below the legally prescribed minimum wage, as well as poor working conditions and exploitation, especially for children and women.

Child Labor in the Gray Economy: A Deep Dive

Employing children is also part of working within the gray economy. Back in 2016, when 86% of Syrian children in Istanbul were not integrated into the education system, 26.6% of their parents stated in a survey by the organization Hayata Destek that their children simply had to work to contribute to the family budget. Half of those who sent their children to work said that their children worked in the textile industry, whether in garment production or footwear. One-third of working children in Istanbul are employed in the service sector, such as kiosks, grocery stores, eateries, cafes, and restaurants. Nearly one-fifth of working children's parents stated that their children work in industry, from furniture to car manufacturing.[12] The data is shown in graph. 

Sultanbeyli District: A Microcosm of the Wider Syrian Refugee Experience

In the Sultanbeyli district, almost all refugees, apart from a few working in the public sector, are also informally employed with long working hours. They work without social security and are exposed to various forms of exploitation. "Many refugees often come here to complain about their employers. There are several fraudulent cases where employers refused to pay salaries at the end of the month. However, we cannot do anything about it because the work is unofficial. Syrians cannot even file a complaint in court if they don't have documents," said Kemal, the head of the refugee coordination center.[13]

Textile and Clothing Industry: A Hotspot for Informal Employment

The textile and clothing industry, where 45% of all employed Syrians in Istanbul work, faces very tough price competition from abroad in Turkey, especially from China, India, and Bangladesh.[14] Due to the high price elasticity of demand, the textile and clothing industry is striving to keep all production costs, especially labor costs, at the lowest level possible. Data shows that informal employment and lower wages are more common in these two sectors than in any other sector in Istanbul.[15] However, 46% of working Syrians in this sector do not even earn a minimum wage.[16]

The Consequences of COVID-19 on Vulnerable Labor Sectors

According to the World Bank, the textile and clothing industry are among the most vulnerable in terms of job loss due to the COVID-19 pandemic.[18] In these sectors, it is not possible for workers to perform their work from home. Due to the uncertain legal status of Syrians and the lack of employment contracts, these workers are not protected against temporary dismissal bans and cannot access benefits from short-term employment contributions or daily wage support introduced by the government.[19]

The Aspirations of Young Syrian Workers in Istanbul: Formal Employment and Job Security

Although the gray economy allowed for the rapid absorption and employability of Syrians in the first years, it is now necessary to adopt political and administrative measures to integrate them into the formal labor market to achieve the Turkish government's goal of reducing the level of illegal employment over the next five years from 36% to 28.5%.[20] A survey among young Syrians in Istanbul found that these respondents would prefer to work based on official contracts, pointing out that working without a contract could put them in a difficult situation.[21]

Conclusion

The informal labor market of Istanbul, nestled within the larger formal economy, is sustained by a workforce ensnared in a cycle of exploitation and inequality. Child labor, a disturbing facet of this reality, often involves children as young as ten years old, particularly girls, working in so-called "workshops under the stairs". The economic pressures faced by many families make sending children to work a necessary survival strategy, exacerbating the issue of child labor.

The COVID-19 pandemic has intensified these challenges, potentially reversing years of progress made towards the integration of Syrian children through inclusive education in state schools. As the pandemic forces education online, many families lack the resources for their children to participate, driving them further into the labor market.

Only an equitable and fair approach to formal employment can alleviate the negative impacts of immigration, not only in Turkey but in any country. Positive examples like the Sultanbeyli district, which actively responded to the arrival of Syrians, prevented their concentration in certain areas, and established community centers, show the role local institutions can play in fostering better integration. While local self-governments may not single-handedly improve the standing of Syrians in the labor market, they can provide the necessary structures for newcomers to become informed about opportunities, thereby fostering a first step towards better integration. Successful integration, both professionally and otherwise, is a matter that requires the commitment of all parties involved.

[1] KIRIŞCI, K a G. UYSAL KOLASIN. Syrian refugees in Turkey need better access to formal jobs. Brookings [online]. 18.7.2019 

[2] ERDOĞAN, M. TÜRKİYE’DEKİ SURİYELi MÜLTECiLER. TAGU – Türk-Alman Üniversitesi [online], 2019 str. 12 

[3] Syrian refugees in Turkey and trade union responses (tandfonline.com) str. 845 

[4] KINIKLIOĞLU, S. Syrian Refugees in Turkey: Changing Attitudes and Fortunes [online]. 5.2.2020 str. 4 

[5] SAĞIROĞLU, A. NOT ONLY A BURDEN BUT ALSO A CONTRIBUTION: THE IMPACTS OF SYRIANS ON THE TURKISH ECONOMY [online]. 2016 str. 3

[6] KAYAOĞLU, A. Labour Market Impact of Syrian Refugees in Turkey: The View of Employers in Informal Textile Sector in Istanbul [online]. 25.09.2020 str. 589 

[7] KIRIŞCI, K a G. UYSAL KOLASIN. Syrian refugees in Turkey need better access to formal jobs. Brookings [online]. 18.7.2019 

[8] EROL, E, A. AKYOL, C. SALMAN, E. PINAR, İ. GÜMÜŞCAN, K. MISIRLI, M. KAHVECİ a P. MUTLU. Suriyeli Sığınmacıların Türkiye’de Emek Piyasasına Dahil Olma Süreçleri ve Etkileri: İstanbul Tekstil Sektörü Örneği. BİRLEŞİK METAL-İŞ [online]. 2017 str. 79 

[9] KAYAOĞLU, A. Labour Market Impact of Syrian Refugees in Turkey: The View of Employers in Informal Textile Sector in Istanbul [online]. 25.09.2020 str. 592 

[10] BALCIOGLU, Z. New Tiles in the Urban Mosaic. Refugees in town [online]. 2018 

[11] KIRIŞCI, K a G. UYSAL KOLASIN. Syrian refugees in Turkey need better access to formal jobs. Brookings [online]. 18.7.2019 

[12] KAYA, A a A KIRAÇ. VULNERABILITY ASSESSMENT OF SYRIAN REFUGEES IN ISTANBUL. Hayata Destek Derneği [online]. 2016 str. 28 

[13] BALCIOGLU, Z. New Tiles in the Urban Mosaic. Refugees in town [online]. 2018 

[14] https://reliefweb.int/sites/reliefweb.int/files/resources/5efd9082772d8%20%281%29.pdf str. 21 

[15] OPPORTUNITIES-FOR-SYRIAN-YOUTH-IN-ISTANBUL.pdf (bahcesehir.edu.tr) str. 71 

[16] EROL, E, A. AKYOL, C. SALMAN, E. PINAR, İ. GÜMÜŞCAN, K. MISIRLI, M. KAHVECİ a P. MUTLU. Suriyeli Sığınmacıların Türkiye’de Emek Piyasasına Dahil Olma Süreçleri ve Etkileri: İstanbul Tekstil Sektörü Örneği. BİRLEŞİK METAL-İŞ [online]. 2017 str. 54 

[17] LARGE, T. REPORT: Big fashion brands have ignored the 'endemic' abuse of Syrian refugees in Turkey. REUTERS [online]. 25.10.2016 

[18] ŞEKER, S, E. ÖZEN a A. ERDOĞAN. Jobs at risk in Turkey: Identifying the impact of COVID-19. World Bank [online]. 2020 str. 9 

[19] TESSMANN, J. SYRIAN TEXTILE WORKERS AMID THE COVID-19 PANDEMIC: A CASE FOR CLOSER COOPERATION BETWEEN TURKEY AND THE EU. IPC–MERCATOR POLICY [online]. 2020 str. 6 

[20] KINIKLIOĞLU, S. Syrian Refugees in Turkey: Changing Attitudes and Fortunes [online]. 5.2.2020 

[21] OPPORTUNITIES-FOR-SYRIAN-YOUTH-IN-ISTANBUL.pdf (bahcesehir.edu.tr) str. 34