A wage cut imposed in May on the employees of a steel company in southern Turkey has reportedly forced workers to cut spending and negatively affected the local economy.

Mr Tahsin Mutluay chairman of the İskenderun Chamber of Grocers and Retailers said that “Due to the reduction of salaries workers are naturally obliged to make savings, reducing the activity in the market. Accordingly, several businesses have shut down.”

The İsdemir steelworks, located in İskenderun a town in the province of Hatay on the Mediterranean coast of Turkey introduced the wage cut as of May 1st 2009.

According to Mr Bayram Ozarslan head of a mutual aid association for İsdemir’s employees and retirees, the impact of the wage cut will be more visible in the coming weeks. He said that “In particular, those workers who try to make ends meet by taking out loans have a tough time paying them back.”

Mr Mufit Tennioglu vice chairman of the İskenderun Chamber of Commerce said that it is inevitable that the pay cut at the region’s largest integrated iron and steel facility affects the region’s economy, trades people and related sectors.

Mr Tennioglu said that “The measure at İsdemir is a temporary but necessary one. It inevitably affects the region’s economy. But this period will be overcome through the joint efforts of employers and employees. Our country is overcoming this crisis and we are hopeful.”

(Sourced from Hurriyetdailynews.com)