Gap Between Iranian Workers’ Wages, Living Costs Widens to 67%

EghtesadOnline: Workers’ representative in the Supreme Labor Council, Ali Khodaei, put forward three main demands in a meeting with the newly-appointed Minister of Cooperatives, Labor and Social Welfare Mohammad Shariatmadari earlier this week.

News ID: ۷۴۶۱۷۶

31 October 2018

Workers’ wages are well below living wage, he said, adding that the gap between workers’ wage and their living wage has widened to 67% in the current fiscal year (March 2018-19) due to the recent economic difficulties, suggesting that a worker’s salary can only cover 33% of the costs of living for a three-member household.

After a dozen sessions, the representatives of workers, employers and the government agreed to increase last year’s (March 2017-18) minimum wage from 9.29 million rials ($63.6) to 11.14 million rials ($76.3) this year.

Workers of other pay levels above the minimum saw a pay rise of 10.4% plus a monthly fixed sum of 846, 240 rials ($5.7) to their basic pay and a daily rise of 17,000 rials (11 cents) to their severance base pay, Financial Tribune reported.

The living wage for a 3.3-member household last year (March 2017-18) was set at 26.7 million rials ($182.8) by the council. Food and beverage expenditures accounted for 25.7% of the figure and non-food items made up 74.3% of the households’ expenditures. It is three years now that the council sets the living wage of Iranian households for the following year’s wage hike.

The law indicates that the minimum wage for each year must be set in accordance with the inflation rate during the previous 12 months. The annual inflation rate for March 2017-18 was put at 9.6% by the Central Bank of Iran and 8.2% by the Statistical center of Iran.

This is while SCI and CBI, in their latest reports, have put the average goods and services Consumer Price Index for the 12-month period ending Oct. 22 at 13.4% and 15.9% respectively.

Job security is the simplest demand a worker can have, Khodaei said in the Sunday meeting, referring to the point that the proposal on streamlining job contracts is gathering dust in the Cabinet.

Currently, more than 95% of workers in Iran work on temporary contracts that are renewed every one, three or six months. The constant fear of non-renewal causes distress among employees.

Furthermore, the increasing number of short-term contracts causes problems such as decreasing job stability, inadequate on-the-job training and falling productivity. Job insecurity is also associated with poor health and family tensions.

Noting that only 10% of Iranian workers belong to a labor union, Khodaei said workers are willing to have unions to represent them in negotiations with employers for better wages and improved working conditions.