Negative Effects of Privatization

Essay by ozgurmadranUniversity, Bachelor'sA, March 2010

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The negative effects of privatization on labor have created some challenging problems for the countries that are in the process of privatization. This paper is about the impact of privatization on dismissed workers in Turkey. Dismissed workers have lost some of their earnings after they are reemployed by the new owners of the enterprises. Earnings losses were smaller for the self-employed than for the wage employed. The jobs that once these dismissed workers were doing, became very insufficient, that is, lack of high earnings. Decreasing the earnings of the workers meant that there will be a group of people that will spend their money on the first necessities for their lives. Instead of paying money for extra needs, they will use the money for the most important necessities for their families. Workers feel that what they had lost is the advantage and right of them for making future plans about their lives.


Many countries have launched large-scale privatization programs in the last two decades including Turkey. Although Turkey has started its privatization efforts in 1983, its progress grows slower than many of the economies of Central and Eastern Europe. Main goal of privatization is to put an end to the inefficiencies of the state owned enterprises by freeing the resources of this huge organism to enhance the living standards of the people. But this is not the case, always.

Privatizations have some disadvantages as well as benefits, over the countries that are trying to give up the control of the state economic enterprises. Here, we will deal with the impact of privatization on dismissed workers in Turkey. Dismissed workers suffered significant earnings losses upon re-employment, losses that amounted to an average of 66 percent of their state earnings. Nonetheless, those earnings losses were smaller for self-employed...