Turkish crisis hits working people
16 August 2018
The Turkish lira’s (TL) freefall depreciation against the US dollar and the euro has immediate repercussions on prices of goods and services, raising the official inflation rate to 15.4 percent in July—the highest level in 14 years. This, however, largely underestimates the real increase in prices.
At the beginning of the year, the minimum wage, paid to almost half of Turkish workers, was 1,603 TL, equivalent to 424 USD, when one dollar was 3.78 TL. Now it is only 221 USD. At the beginning of August, the average monthly gas and electricity bills rose to 14.7 percent of the minimum wage, while prices of staple food products have increased two- or in many cases three-fold.
Widespread workplace closures, bankruptcies and downsizings are threatening all sectors of the deficit-ridden Turkish economy, including construction, banking, automotive, metal, textile and even agriculture. Within a year, Turkey’s Istanbul 30 stock market index has fallen by more than 50 percent in US dollar terms, indicating a danger of stagflation.
Turkey’s heavily import dependent construction sector, mainly responsible for the growth of the Turkish economy over the last decade, has already come to a standstill, leaving tens of thousands of workers unemployed, as the collapse of lira led to a drastic increase in costs.
The number of redundancies and unpaid days off are increasing in the textile and metal industries. According to a current statement of the Dev-Tekstil trade union’s Cukurova branch, some 1,500 textile workers have already lost their jobs in the region.
Meanwhile, there are growing rumors among metal and automotive workers that multinational conglomerates, such as Bosch, Ford, Mercedes Benz, Siemens, Renault and…