Minimum Wage and the Cost of the Living Basket of Laborers in Iran

Minimum Wage and the Cost of the Living Basket of Laborers in Iran
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According to the decision made by Iran’s Supreme Labor Council in 1399 (2020-2021), the minimum monthly wage of laborers in this country has increased by 26 percent over the previous year and is now set at about 1 million 900 thousand tomans (73 USD) . However, Fathollah Bayat, the head of the Iranian Contracting Workers’ Union, said the average monthly cost of the laborers’ livelihood basket has reached about 10 million tomans (384 USD). Fathollah Bayat also put forth that the cost of the laborers’ livelihood basket in big cities like Tehran has reached about 11 million tomans (423 USD), which does not fully cover the living expenses of a family of 3.3 workers.

An increase in the laborers’ livelihoods is happening while in recent months, rising inflation, as well as skyrocketing prices, especially in sectors such as food, housing, health care, and transportation, has reduced laborers’ wage coverage to its lowest level in recent years. In other words, with the passage of the household’s livelihood basket beyond the 10 million tomans limit, the rate of laborers’ wage coverage has reached below 30%. It is noteworthy to state that in addition to the staggering inflation, the COVID-19 outbreak has also entailed overhead costs for laborers’ lives. With the spread of the Corona pandemic, the costs of prevention and possible health care, as well as the costs of virtual education, have been added to the consumption basket of Iranian families.

In addition to this, the poverty line in Iran is estimated between 9 and 10 million tomans (346-384 USD). Regarding this, Gholam Ali Mohammadi, a member of the Islamic Labor Council of the Entekhab Industrial Group, warned about the situation of laborers, saying that "if wages are below the poverty line, not only the worker and the worker’s family will suffer, but also production; employees should have a safe and secure place to work; laborers should be able to pay for their children’s education so that the laborers can work without worries”.

With such a situation, the Social Commission of the Iranian Parliament has proposed a 35% increase in the minimum wage for laborers in 1400 year (2021-2022), which will be about 2 million 565 thousand tomans (98 USD), comparing with the current year. However, considering the poverty line of 10 million Tomans in Iran, laborers’ expectations indicate that the minimum monthly wage of a worker must be at least 10-12 million tomans (384-461 USD) in order to live.

Current rate on February 19, 2021.