Iran’s Supreme Labor Council Exacerbates Poverty Instead of Raising Wages

Amir2018TaghatiMarch 18, 2024
Iran’s Supreme Labor Council Exacerbates Poverty Instead of Raising Wages
As the end of the Persian calendar year approaches,

iran ahvaz oil workers
Written by
Mansoureh Galestan

As the end of the Persian calendar year approaches, discussions have commenced regarding the establishment of the minimum wage for the year 1403. However, the forecasts preceding the decision-making process within the regime’s Supreme Labor Council do not offer optimism but instead depict a bleak outlook characterized by heightened destitution and poverty.

The Supreme Labor Council, comprising key stakeholders such as the government, employer representatives, and state-appointed worker representatives, convenes annually to decide on minimum wage adjustments. Notably absent from these deliberations are representatives from independent labor unions.

The individuals designated as worker representatives within this council are typically handpicked from state-created labor unions, commonly referred to as “yellow” unions. Their role primarily involves endorsing the decisions made by the regime’s Supreme Labor Council. Additionally, these selected labor representatives, aligned with the state’s interests, also bear the responsibility of quelling any labor protests that may arise.

Amidst the current swirl of speculation and conflicting statements in Iranian state media, Tasnim News Agency reported, “During a recent session, the Ministry of Labor discussions ended without reaching a conclusion, as social partners spent hours deliberating. According to Tasnim reporter, in line with the Budget Law, there will be a 20 percent increase in both the minimum wages and continuous benefits of employees, including those covered and not covered by the Civil Service Management Law.”

Further in its report, Tasmin quoted the regime’s Minister of Labor, Sulat Mortazavi, stating that workers’ wages will only be increased by 22 percent.

Article 41 of the current labor law mandates that the minimum wage be adjusted in accordance with inflation. However, despite being formulated by the regime, this provision has never been upheld. This failure to adhere to the law has perpetuated a widening gap between wages and inflation, exacerbating impoverishment and leaving workers struggling to make ends meet. Even if inflation rates were to be acknowledged, the staggering rise in inflation throughout the year renders any adjustments insufficient. Consequently, not only does the minimum wage remain stagnant, but the purchasing power of wage earners continues to decline steadily over time.

Despite official statistics indicating food inflation surpassing 140%, drug inflation exceeding 80%, and overall inflation exceeding 45%, the Minister of Labor for the regime has surprisingly announced a preemptive 20% increase in the base wage for the upcoming year 1403.

The unrealistic announcement of inflation rates and the politicization of statistics serve to mask the lack of genuine wage increases. Ebrahim Raisi’s assertion of a 20% reduction in the month-to-month inflation rate from January to February of the current year is utterly dubious. Raisi’s claim of decreased inflation appears to be a manipulation of statistics and a deliberate distortion of the truth. Contrary to his statement, based on the same statistics he cites, the month-to-month inflation rate has actually increased by 8.35% compared to January. Moreover, the overall inflation rate compared to the previous year has resulted in a significant decrease in purchasing power for the citizens.

Reports from state media, while often based on inaccurate statistics and exaggerated data, still convey the severity of the situation.

In an article on March 17, the state-run Sharq newspaper wrote, “If we were to use gold as the benchmark for assessing the purchasing power of workers’ wages, we would realize the extent to which workers’ living standards have deteriorated over the past decade. Over this period, the price of gold has surged by a factor of 37.58, while the minimum wage of workers has merely increased by 12.37 times.”

Reporting on the regime’s failure to announce next year’s minimum wage, the newspaper Etela’at wrote on March 17, “The government and the Organization of Planning and Budget are likely the most significant factors contributing to this disagreement [over the minimum wage], as they hold the upper hand in the Supreme Labor Council. Their apparent argument is that increasing the minimum wage in line with annual inflation not only raises liquidity but also exacerbates the government’s budget deficit. Since the government’s intention is to rid itself of the burden of the 40% median inflation, it does not wish to further increase its budget deficit by excessively raising wages.”

In another acknowledgment of the failure of Ebrahim Raisi’s administration to realize what Khamenei had labeled as the slogan of the year, namely “controlling inflation and boosting production,” the state-run Ham-Mihan conducted interviews with 10 experts and economists. The consensus reached was that “none of these 10 individuals believed that the government had effectively controlled inflation or stimulated production,” and that “none found the government’s financial performance defensible.”

Meanwhile, among the chorus of internal critics, Abdolnaser Hemmati, the former governor of the Central Bank of the regime, strongly criticized Raisi for his failures over the past year. On March 15th, Hemmati penned the following on his Telegram channel, “You said that a competent government could resolve sanctions and the JCPOA. What were the results? The dollar soared to 60,000 tomans, experiencing a staggering 140% increase in exchange rates, while the national currency plummeted by 58%. Moreover, persistently high inflation rates, soaring housing prices, and rental costs continued unabated. The decline in people’s purchasing power despite ranking first in the world in terms of oil and gas resources, the increase of over 30% of the population falling below the poverty line, the significant lag behind regional competitors in terms of gross domestic product and economic power, the worsening raking of corruption and the business environment. Which of these indicators reflects the government’s efforts to shape a stronger Iran?”

 

 

Iran’s Supreme Labor Council Exacerbates Poverty Instead of Raising Wages

Amir2018TaghatiMarch 18, 2024
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