Late March is a festive occasion for Iranians and many others, as we celebrate the beginning of Persian New Year, coinciding with the beginning of the spring equinox in the northern hemisphere. Known as Nowruz, the festival has gained global recognition in recent years and even got its own Google doodle this year.
But on Iran’s political calendar, Nowruz is also a harrowing occasion.
In the lead-up to it each year, a council convened by the government determines the legal minimum wage, which has to be increased annually due to rampant inflation. As Iranians spend the final weeks of winter getting ready for Nowruz, trade unions and workers’ rights activists are busy fighting for a living wage. This time around, too, thousands of workers and their advocates have written open letters, signed petitions and staged demonstrations to ask for a monthly minimum wage of at least 150 million Iranian rials ($250 at the market rate) every month – which, even if it had been achieved, would have still been well below a living wage.
But the campaign failed to reach even this meagre goal. The minimum wage for the new year was finally set at only 116 million rials per months. While this is a 35 per cent increase from the previous year, it effectively counts as a massive pay cut, since the inflation was more than 43 per cent, according to official figures, with some items, especially in the capital city Tehran, having seen their prices more than double.
This is an obvious violation of Iran’s own labour code, which mandates an annual increase in the minimum wage to at least keep up with the inflation.
By most calculations, to afford a basket of necessary goods, Iranians need 250 million rials every month. This was the number given by Ali Babayi Karnami, a conservative MP who holds a PhD in economics and heads the parliament’s workers’ caucus. And that is a nationwide figure. In Tehran and other large cities, the real number would be between 280 to 300 million rials. The new minimum wage thus doesn’t even cover half of a living wage.
In US dollar terms, things are even worse. Since every dollar now trades for around 600,000 rials, the monthly minimum wage is now about $193. By contrast, the minimum wage is $618 in neighbouring Turkey, which has also suffered from its own economic crises and high inflation rates. Workers of Iran now have one of the lowest living standards in the region.
The minimum wage in Iran is supposed to be set by a trilateral process involving the government, workers and the private sector. It is determined by the High Council of Labour, convened by the Ministry of Labour, chaired by the minister himself and consisting of three representatives from each of the parties. But since independent trade unions are banned and their leaders have been jailed, workers’ representatives on the council instead come from the highly curated Islamic Councils of Labour (ICL), a state-sanctioned trade union often aligned with the government.
However, even these representatives have little power, since the government representatives always more readily side with the employers and thus leave them in the minority. In this sense, over the past few decades the Islamic Republic has been resolutely capitalist despite all its social justice pretensions, with Supreme Leader Ayatollah Ali Khamenei promoting and overseeing massive privatisation.
This year, workers’ representatives on the High Council had waged a campaign for the aforementioned 150 million rials. Alireza Mirghafari, an ICL trade unionist organising workers in the gas refineries of southern Iran, led a petition signed by more than 70,000 people echoing this demand. Employers’ representatives, meanwhile, were asking for the wage to be set at 90.8 million. The final number is, of course, much closer to the demand of the employers.
As the High Council convened on Monday to make its decision, the meeting continued past midnight. The workers’ representatives left in protest and refused to sign the final decision, which was published in the early hours of Tuesday, less than 24 hours to the new year.
Once you look at the details, things become even more harrowing.
In effect, only workers who are married and have children could get the full 116 million while the most basic wage base is set at 70.2 million, with the rest consisting of various top-ups, some of which are conditional. For instance, married people get a 5 million rial bonus, which supposedly signals the government’s pro-natal policies. But that amount currently cannot even buy a single kilogram of meat. The amount dedicated to housing has remained unchanged at 9 million rials, even though rents have increased by more than 50 per cent in large cities.
With international isolation, increased repression and prisons full of political prisoners, Iranians face many woes. But nothing is as grating and destructive as the country’s worsening economic conditions, which are the result of economic mismanagement, cronyism, a lack of planning, corruption and the western-led sanctions that are themselves results of the policies pursued by Mr Khamenei.
When he was elected president in a mostly staged election in 2021, Ebrahim Raisi had promised to improve things. His aides and supporters often blame the problems on his centrist predecessor, Hassan Rouhani. But three years later, it is clear that things are worse – and only getting worse.
In this month’s parliamentary elections, which were limited almost entirely to various brands of conservatives and hardliners, economic concerns were at the top of voters’ minds, as well as those of the majority who didn’t vote. There is a widespread consensus that the economy is in a state of disaster.
Ebrahim Jamili, an economist who sits on a board of Iran’s Chamber of Commerce, has predicted that the coming year “will be the toughest year, economically speaking, since 1979”.
A more forthright opinion was expressed by Javad Alavi Borujerdi, a high-ranking cleric and a grandson of a famed Grand Ayatollah. In a recent lecture, he said: “The people of Iran don’t deserve to live like this … people can’t even afford eggs anymore.”
He went on to add: “Whether we like it or not, they’ll blame it on us, the clerics.”
