Promise of 20% Wage Increase Falls Short Against 35% Rise in Food Prices

Some officials in the Rouhani administration have spoken about a 20% increase in wages for workers, employees, and retirees. This comes at a time when price inflation has reduced people’s purchasing power and caused a 25% increase in the poverty line in 1397 (2018-2019).

“Tejarat News” has referenced calculations by the “Research Wing of Parliament” regarding Iran’s poverty line. According to calculations by the “Research Center of the Islamic Consultative Assembly,” the poverty line in the summer of the current year showed an increase of approximately 25% compared to the same period last year.

The same report evaluated the government’s policy of supporting families with incomes below three and a half million tomans as ineffective.

The “Tejarat News” website on Monday, December 10, reported on the effects of inflation and price increases on people’s purchasing power, announcing a 25% increase in Iran’s poverty line.

The Parliament Research Center calculated the absolute poverty line for the first six months of 1397 (2018-2019). According to these calculations, the poverty line varies across different provinces as well as in rural areas, and therefore, supporting poor families cannot be based on a single uniform policy.

Increase in Poverty Line in Tehran

Parliament’s calculations show a “very significant jump” in the absolute poverty line in summer 1397 compared to spring of the same year. In other words, the poverty line in Tehran increased by only 300,000 tomans in summer 1397 compared to spring 1397 for a four-member family.

According to the research center’s calculations, the poverty line for a four-member family in Tehran in the summer of the current year was equivalent to 2 million and 728 thousand tomans.

The same assessment reported a significant increase in the number of families living below the poverty line compared to previous years.

Although the cost of living in other cities and rural areas is lower than in Tehran, a decline in people’s purchasing power and more families falling below the poverty line is being observed throughout the country.

Calculations of the absolute poverty line in provinces, cities, and rural areas show a 25% increase in the poverty line across the entire country.

Wage Increase Promises

“Tejarat News” has referred in another report to promises by some government officials regarding a 20% increase in wages for workers, employees, and retirees.

The news of a 20% wage increase was published by the “Islamic Republic” newspaper, citing “a number of executive officials.” The Kayhan newspaper warned these officials on this matter and wrote:

“It is clear that these individuals are making such promises with good intentions and with the goal of reducing the psychological suffering of people who are under the pressure of price increases, but unfortunately, they are either unaware of the consequences and repercussions of these promises, or they are feigning ignorance. In either case, these officials must be warned not to make the same mistake again and not to make the country’s economic situation more critical.”

The author of the mentioned report continued: “The amount of price inflation caused by currency fluctuations in the current year is far more than 20%. Given this fact, how do these officials plan to solve people’s livelihood problems with this 20% increase?”

The report states that a 20% wage increase would lead to the bankruptcy of many factories and institutions that cannot afford to pay this level of wages.

It should be noted that according to calculations made by “Donyaye Eghtesad” (World of Economy), the prices of many essential goods, including food items, have increased by more than 35% over the past months.

Source: DW