699K Jobs Salvaged by Covid-19 Relief Aid Given to Businesses

EghtesadOnline: A total of 699,000 jobs were safeguarded throughout the coronavirus crisis as a result of loans extended by the government to businesses under the Covid-19 relief assistance program.

News ID: ۷۸۶۳۱۵

11 April 2021

According to Alaeddin Azvaji, the director general of Policymaking and Job Department of the Ministry of Cooperatives, Labor and Social Welfare, a total of 235 trillion rials ($940 million) in loans were allocated to 14 groups of businesses, including 858 subgroups in the first stage of the program.

In the second stage, which is still underway, four sectors of “transportation”, “tourism and handicraft industries”, “sports and youth”, and “culture and art”, were found eligible to receive, respectively, 37,000 billion rials ($148 million), 20,000 billion rials ($80 million), 8,000 billion rials ($32 million) and 18,000 billion rials ($72 million) in loans.

“So far, more than 513,000 economic enterprises have signed up for Covid-19 relief assistance program at Kara.mcls.gov.ir, of which 388,000 businesses have received the low-interest loans [at 12% lending rate] and 125,000 are undergoing the loan process,” Azvaji was quoted as saying by Fars News Agency.

“Iran’s labor market experienced one of its worst crises last year [March 2020-21]. Surveys by the Statistical Center of Iran show nearly one million people lost their jobs compared with the year before. Figures by the Social Security Organization of Iran indicate that 998,000 of insured people became redundant in the first quarter of last [fiscal] year [March 20-June 20, 2020].”

Noting that unofficial employment [jobs without health insurance and retirement benefits] accounts for 29% of Iran’s total number of jobs, Azvaji said, “An estimated 476,000 uninsured workers became jobless in Q1 of last year, which brought the total number of lost employment to 1,474,000 then. However, SCI numbers suggest that some of those who left the labor force last spring returned to work in the subsequent quarters.”

SCI on Q4 Labor Market

Iran’s unemployment rate, the proportion of jobless population of ages 15 and above, stood at 9.7% in the fourth quarter of last fiscal year (Dec. 21, 2020-March 20), indicating a 0.9% decline compared with the same period of the year before.

The Statistical Center of Iran put Q4 labor force participation rate—the proportion of the population of ages 15 and above that is economically active either employed or looking for a job—at 40.9%, registering a 1.5% decrease year-on-year.

Employment is defined as persons of working age engaged in any activity to produce goods or provide services for pay or profit, whether at work during the reference period or not at work due to a temporary absence from a job, or to working-time arrangement.

The total number of employed population was 23.13 million, down 300,000 compared with the same quarter of the previous Iranian year.

The services sector employed 50.4% of the Iranian employed population, as industrial and agricultural sectors provided 33.8% and 15.8% of jobs respectively.

The sector consists of wholesale and retail trade; restaurants and hotels; transport, storage and communications; financing, insurance, real estate and business services; as well as community, social, education, health and personal services.

The center provides two figures for the youth unemployment rate: the proportion of the population between 15 and 24 years and those between 18 and 35 years.

The youth unemployment rate of those between 15 and 24 years stood at 23.6% in Q4, posting a 2.1% decrease while the unemployment rate of those between 18 and 35 years stood at 16.8%, posting a decline of 1% YOY.

Underemployment, the condition in which people in a labor force are employed for less than 44 hours of service per week, stood at 10.8%.

Of the employed population, 33.9% worked more than 49 hours per week.

The decrease in unemployment comes as labor force participation has shrunk in line with the loss of jobs due to the coronavirus pandemic.

The economically active population, the sum of employed and unemployed persons, reduced by 1.62 million in the second quarter of the current fiscal year (June 21-Sept. 21), indicating a 3.1% decline in labor force participation rate compared with the corresponding period of last year, according to a report by Majlis Research Center, the research arm of the Iranian Parliament.

According to this report, 22.3% of the unemployed and 8.9% of employed persons were added to the population of economically inactive in Q2. Had they joined the population of people looking for a job, the unemployment rate for the period under review would have been 18.5% rather than the official 9.5% announced by the Statistical Center of Iran.

The MRC report continues: “Of the more than 1.62 million people of the active population that dropped out of the labor market in Q2, 1.01 million were women and 615,651 were men. The second quarter’s economic participation rate fell 3.1% year-on-year to reach 41.8%. In fact, women have experienced the biggest job losses in Q2. Out of 1.2 million people who lost their jobs in Q2, 460,000 were men and 750,000 were women. Men and women’s participation rates dropped by 2.7% and 3.5% to hit 69.5% and 14.1%, respectively.

The services sector accounted for the biggest share of the unemployed: out of 1.2 million persons who lost their employment in Q2, 817,000 were from the services sector. Out of 22 groups of economic activities, only three groups: “financial and insurance activities”, “construction” and “administrative activities and support services” registered growth in employed population. The sharpest declines were registered by three groups of “accommodation and food services”, “information and communications” and “art, leisure and entertainment”.

1m Businesses, 3m Jobs at Risk Amid Fourth Wave

The Iran Chamber of Guilds recently issued a statement expressing concerns regarding the economic implications of a new surge in Covid-19 cases, Mehr News Agency reported.

“Official figures suggest an increase in the number of new infections due to the decline in compliance with Covid-19 safety protocols during the Iranian New Year holidays. More cities and counties are falling in the high-risk red zone for coronavirus transmission and widespread closures of businesses are likely to ensue,” the statement read.

“If more cities, including Tehran, Karaj and Isfahan, move into the red zone of the country’s color-coded coronavirus framework, more than one million businesses affiliated to ICG will shut down and three million people will become jobless.”

Notably, only essential businesses categorized as Group I, including bakeries, supermarkets, grocery stores, car shops, chain stores, health and treatment centers, pharmacies, factories, transportation companies, public parking garages, post offices, internet service providers, press, nursery homes and print shops, are allowed to remain open in red zones.

His comments came before all of Iran’s 31 provincial capitals were placed on red alert, as a fourth wave of infections is sweeping across the country at an unprecedented pace and the total number of infected cases has surged past two million.

Tehran’s Grand Bazaar has been ordered to close for two weeks starting Saturday to contain the rapid spread of infections.

According to Qasem Noudeh-Farahani, the head of Tehran’s Chamber of Guilds, aside from Grand Bazaar, all non-essential businesses, i.e., Group II, III and IV of jobs are forced to shutter, since the capital city has been demarcated as a “red zone”.

The remote working program of government employees will remain in place as before, i.e., the highest-ranking executive in charge of the management of an organization will decide upon the presence or teleworking of employees.

According to Alaeddin Rafizadeh, a senior official with the Administrative and Employment Affairs Organization, the bylaw on remote working of employees as per the color-coded system issued on Nov. 17, 2020, and remains in effect.

According to a government classification, colors “red”, “yellow” and “white” indicate the R value, or the number of people a patient can pass the disease to, in a respective county.

“Our emphasis is on preventing interruption of services; people must have access to essential services at all times,” he told ISNA.

The Administrative and Employment Affairs Organization has divided services into two categories: essential and normal services. In yellow zones, 100% of employees of agencies providing essential services need to be present at their workplace. But the physical presence of employees of other agencies would be restricted to two-thirds of full capacity.

In orange zones, the physical presence of employees of agencies providing essential services would be restricted to two-thirds of full capacity. But the physical presence of employees of other agencies would be restricted to 50% of the total capacity.

In red zones, the physical presence of employees of agencies providing essential services would be restricted to 50%, provided that it won’t cause interruption in service delivery. The physical presence of employees of other agencies would be restricted to one-third of full capacity.

Rafizadeh noted that in all organizations, pregnant women, those with health conditions and women with children under age six must be placed in top priority group for teleworking.