Workers Await New Minimum Wage

EghtesadOnline: The second meeting of the Supreme Labor Council on setting the next Iranian year’s (March 2017-18) minimum wage for nearly 13 million Iranian workers will be held today at the Ministry of Cooperatives, Labor and Social Welfare.

News ID: ۷۷۴۵۴۹

12 March 2017

In their previous meeting, the council agreed to determine the living wage and consider it as a base for setting the minimum wage next year (March 2017-18), Mehr News Agency reported.

The council agreed upon a monthly income of 24.8 million rials ($661) as the living wage for a family of three and a half members.

The minimum wage currently stands at 8.12 million rials ($216) per month, Financial Tribune reported.

The decision to determine the living wage was taken after more than two decades since the introduction of the Iranian Labor Law.

According to the deputy head of Workers’ House, Hassan Sadeqi, Clause 2 of Article 41 of the law calls for balancing minimum and living wages.

“The government and employers’ failure to comply with the law has created a huge gap between the workers’ need to meet their basic needs, namely shelter and other essentials such as clothing and food, and what they receive in actuality,” the Persian daily Tejarat quoted Sadeqi as saying.

“There are two approaches to setting workers’ wages: Either to determine the minimum wage based on the average inflation rate or to calculate the living wage and consider it as a base for setting the minimum wage.”

A look at the performance of the Supreme Labor Council—which consists of representatives of the government, employers and workers—shows the government and employers always favored setting the minimum wage based on the average inflation rate announced by the Central Bank of Iran.

“This is while the living wage, which is the amount of income needed to provide a decent standard of living, should be set in the first place and then based on that, workers’ minimum salary must be adjusted with the inflation rate,” he said.

Sadeqi noted that between the years 1389 (March 2010-11) and 1395 (March 2016-17), the rate of inflation outpaced workers’ salaries by 23% and officials have since failed to bridge this gap.

“For instance, the average inflation rates posted for 1392 (March 2013-14) and 1391 (March 2012-13) were 35% and 30% respectively whereas the workers’ salaries saw a rise of 25% in both years. In 1390 (March 2011-12) and 1389, the inflation rate stood at 21.5% and 12% compared to an 18% and 9% rise in wages,” he said.

“All in all, the rise in workers’ salaries was 27% less than CBI’s official inflation between 1389 and 1392.”

Noting that workers’ wages exceeded inflation rates in the Iranian years of 1393 and 1394 by 1.4% and 2.6%, respectively, Sadeqi pointed out that the 23% gap between worker’s income and inflation rate compared to 1389 is still there.

Stressing that over these years, workers were only capable of meeting 40% of the needs of their families, the representative of workers’ community called on government officials to take advantage of the current year’s single-digit inflation rate and fill the gap between what the workers need to lead a decent life and what they receive.

In its latest report on inflation, the Central Bank of Iran announced that the average goods and services Consumer Price Index for urban areas in the 12 months ending February 18, which marks the end of the Iranian month of Bahman, increased by 8.7% compared with last year’s corresponding period.

The Statistical Center of Iran’s has put inflation for Bahman at 6.8%.