A workers representative in Iran said that there was a 70% gap between Iranian workers’ wages and the county’s consumer basket, the ILNA state-run News Agency reported today.
Iran is set to determine the country’s consumer basket after the Statistical Center announces this month’s inflation rates. The minimum wage for next year will be set accordingly.
But it is not yet clear what approach the government and employers will take in negotiating the minimum wage in light of the new budget bill ratified by parliament and whether wages would even come close to the current 8.5 million toman consumer basket.
Yesterday, the Parliament’s Budget Integration Commission approved a modest 15% increase in the minimum wage which put the number at 2.6 million tomans (around $840).
Worker’s minimum wage will be specified after negotiations in the in the Supreme Council of Labor. Two independent workers’ organizations, the Haft Tapeh Sugarcane Workers’ Union and the Pensioners’ Alliance, have demanded a minimum wage of 9 million tomans.
Iran’s labor laws have set both the inflation rate announced by the central bank and the consumer basket as the criteria for determining the minimum wage. The Supreme Council of Labor, however, only considers the official inflation rate. The central bank has failed to announce Iran’s inflation rate for some time, and the Center for Statistics has now become the source of economic benchmarks such as inflation rates.
The Wages Committee of the Supreme Council of Labor held a meeting on Monday to determine the price of the consumer basket without any results.
Faramarz Tawfiqi, the Committee chairman said that they had to wait for inflation rates to be announced by the Center of Statistics.
Yesterday, the Statistical Center announced the annual inflation rate as 38.9% for the Persian month of Dey (Dec. 22- Jan. 20). According to the report, inflation for foodstuff such as meat and vegetables has reached 70%. Inflation in housing and rent is around 23% while health care has reached 26.4%. The report said that transportation rates had increased by 3% compared to last month and had now reached 46.6%.
Official calculations for the fate of the consumer basket are pending trilateral negotiations between the Labor House, employers and the government.
As usual, the decision will be made with the absence of the real representatives of Iran’s workers.
With the current state of the economy, it is highly unlikely that the Wage Committee will opt for a minimum wage that will even come close to the consumer basket.
Evidence shows that next year’s inflation rates will be at best the same as this year. The most optimistic estimates suggest that the rise in gas prices will lead to a less than 20% increase in the price of goods and services.
Next year’s budget bill, presented to parliament on December 8, showed a 25% increase compared to last year. However, Iran would need to export 870,000 to one million barrels of oil per day to reach those numbers, which is impossible with the current US sanctions.
A recent report by the World Labor Organization shows that Iranian workers are given significantly lower wages than workers in countries like Libya, Oman, Saudi Arabia, Turkey, and Venezuela.
Iranian workers held the highest number of protests in 2019 compared to other groups in the society with an average of 118 protests a month.