70% of Iran’s Workers Live Below Absolute Poverty Line

Fariborz Raisdana says more than 70% of workers in Iran live below the absolute poverty line. According to this economist, the minimum wage for workers should not be less than 3 million and 700 thousand tomans. The current minimum wage is less than one-third of this proposal.

With the beginning of sessions of Iran’s Supreme Labor Council to determine the minimum wage in 1398 (2019-2020), the discussion about this issue, which is one of the main demands of workers and wage earners, has once again become the focus of mass media and public opinion.

In this context, economists and labor activists emphasize the need to restore workers’ purchasing power by increasing their minimum wage and say that the minimum wage should be able to address the livelihood problems caused by the increasingly deteriorating economic conditions for working-class families.

Fariborz Raisdana, an economist, in an interview with ILNA news agency, the text of which was published today, Wednesday, the 10th of Bahman (January 30), described the minimum wage set for the current year (1397/2018-2019) as “incorrect and unjust” and said: “In 1397, considering a household of 3.5 people, the absolute poverty line according to my calculations was 3.34 million tomans, which if we consider the actual coefficient received, if we assume it to be 1.6 times the minimum wage, therefore the minimum wage should not be less than 2.1 million tomans. It should be noted that this figure relates to a time before the economic crisis of 1397 began. This economic crisis, according to my calculations, caused 30 to 40 percent inflation, and as a result of our calculations, the minimum wage should reach 2.8 million tomans. That is, if the wage negotiation session had been held in the middle of the year, the wage would have reached this figure; finally, in order to also consider the minimum wage increase for 1398, we arrive at the figure of 3 million and 500 thousand tomans to rescue workers from the absolute poverty line.”

Raisdana added: “If we also include housing costs in the calculations, this figure should reach around 3 million and 400 thousand tomans for a household of 3.5 people, but given that there is widespread unemployment in society, which by my estimate is 19.5% and by official statistics is 12%, it is clear that even the minimum wage that was set, which was based on 1 million and 111 thousand tomans, was not achievable.”

Some time ago, negotiations on determining the minimum wage for workers entered a new phase with the sending of invitations by Iran’s Supreme Labor Council to representatives of workers and employers. The first session of this council was supposed to begin its review of determining the minimum wage from last Monday.

Mohammad Shariatmadari, Iran’s Minister of Cooperatives, Labor and Social Welfare, today, Wednesday, emphasized that “the minimum wage does not provide for a livelihood.” He had previously said that “the government will bear part of the wage deficit and improvement for workers, and employers must accept the other part.”

Proposal for Minimum Wage of 3 Million and 700 Thousand Tomans

Fariborz Raisdana in another section of his remarks said: “Despite unemployment and the absence of independent worker organizations and the presence of powerful employer organizations and government’s tendency in favor of employers, according to my calculations, about 70% of workers, while the total number of workers reaches 14 million people, live below the absolute poverty line (3 million and 334 thousand tomans).”

This economist emphasized: “Given the inflation imposed on Iran’s economy, 70% of workers and more live below the absolute poverty line. Accordingly, in the new year, these negotiations require conditions that can save the working class’s life as well as the economic situation from this chaos.”

Raisdana added: “The statistics that governments and statistical centers impose during wage negotiations are not correct. Workers should have representatives of economists, lawyers, and sociologists to enter the negotiations.”

According to this economist’s proposal, “for a household of 3.5 people (provided that serious measures exist so that unemployment does not poison the situation and so that employer and government pressures do not cancel these decisions), in my opinion, conditions must be created such that the minimum wage for workers should not fall below 3 million and 700 thousand tomans and the number of deprived workers below the poverty line does not expand further.”

Based on Raisdana’s assessment, the poverty line in Iran for a household of five people is four and a half million tomans, which “for a household of 3.5 people, which is the statistical measurement scale, comes to approximately 3.5 million.”

Mohsen Hashemi, Head of Tehran City Council, on the 23rd of Mordad, citing official statistics, had said that one-third of Iran’s people live below the poverty line and one-tenth of them live below the “absolute poverty line.” But Hossein Raghfar, an economist, in mid-Farvardin of last year described the “absolute poverty line” for an urban family of four as around four million tomans and concluded that 33% of Iran’s population suffer from “absolute poverty” and six percent of them live below the “starvation line.” Iran’s government officials also acknowledge that more than one and a half million Iranians do not even have the financial means to provide food for themselves.

The “Myth” of Inflation Increase if Minimum Wage is Raised

He continued: “I do not mean that in the discussion of raising the minimum wage one should speak recklessly and make unscientific claims and give numbers arrogantly. But it should be recalled that raising the minimum wage does not so simply cause inflation. These myths that various media outlets of both factions tell in people’s ears show the internal motivation of those speakers who with all their might speak in defense of profit and capital and the powerful layers ruling the economy that have brought the economy to ruin and misery.”

Raisdana added: “If the minimum wage is determined in such a way that a household of 3.5 people can reach 3 million and 700 thousand tomans, and unemployment insurance is expanded and covers all the unemployed, and powerful worker organizations defend these conditions, such a situation will not cause inflation and runaway inflation.”

Fariborz Raisdana finally emphasized: “If the minimum wage set in 1397 increases by more than double for 1398 and housing and child allowances are applied and worker organizations strengthen, it may cause an increase in the inflation rate, but it will be very limited. While its positive effect on production and economic recovery is much higher.”

Iran’s Supreme Labor Council in late Esfand of last year approved a 19.8% increase in workers’ minimum wage, bringing it to 1 million, 115 thousand, and 140 tomans in 1397. This is while the head of the Wage Committee of the Supreme Organization of Islamic Labor Councils announced in late Mordad of last year the rate of household living cost in Iran to be “around 5 million and 300 thousand tomans.”

Despite nearly 40 years having passed since the February 1979 Revolution and the promises of government leaders and heads of various governments of the Islamic Republic to create public welfare, Iranian society remains and increasingly struggles with poverty and the deepening widening of class gaps.

In Iran, different statistics about the state of poverty in society are published. While it is generally said that between 25 to 35% of Iran’s people live below the “poverty line,” Shahab Naderi, a member of the Islamic Consultative Assembly, had said in late Esfand of last year that “80% of Iranian society lives below the poverty line.”

Many of Iran’s government and state officials or their advisors have repeatedly warned about the danger of unrest occurring even more severe than the December 2017 protests due to the dire economic and livelihood conditions of the people. Masoud Nili, former special assistant to Hassan Rouhani for economic affairs, was one of them who said in Esfand of last year: “If we continue like this and proceed in this process, we will be in danger and there is a possibility that ‘next time there may not be an opportunity for you.'” On the 24th of Aban of last year, Iran’s president approved Masoud Nili’s resignation.

Source: DW