Iran Economy NewsThe Faulty Cycle of Iran’s Social Security and Poor...

The Faulty Cycle of Iran’s Social Security and Poor Situation of Workers and Retirees

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Workers in Iran have experienced difficult living conditions in recent years. Low purchasing power in the face of staggering inflation, declining wage earners’ living standards, and loss of employment opportunities are the main indicators of the hardships of workers and wage earners. In such a situation, why should a worker in Iran hope that the situation will improve with the presidential election and the coming to power of a new government?

Experience has showed that nothing will change, and the general relations of the economy must change at a level beyond the government in order for the situation to improve. Which means that the extreme corruption in Iran’s government must be solved.

The situation of the labor force can be defined and read in the context of a set of economic variables, and if these variables are not corrected, there is no hope for lasting reform. The economy has long been in a state of decline and recession. ‘Recession’ is equivalent to reducing investment and employment and reducing the level of production of enterprises and affects factors of production, including labor. The first effect is rising unemployment and wage problems, which is why wages have long been ‘undesirable.’

TRecession is worse and deadlier for the poor than the rich, and inflation is the killer of wage earners. The combination of these factors leads to economic and livelihood losses for workers. Iran is involved with the coronavirus for more than a year and a half. And corruption has become one of the main pillars in Iran’s economy, without any hope of change.

For this reason, the ’employment focus’ has distanced itself from the economic goals of governments. Governments have not talked about meaningful job creation for years. These issues have piled up and the situation has reached the position which we are witnessing today. Correcting this situation is not so simple and even more impossible.

The fact is that the Statistics Center of Iran does not provide accurate statistics. We do not have accurate information on the components that affect the life and livelihood of the working class. Inflation statistics are a small part of it. We do not have accurate statistics on labor market components such as the exact unemployment rate and the employment rate of workers.

All we know is: Unemployment insurance and unemployment insurance claimants have increased significantly. So, Iran’s economy needs sustainable and fruitful changes to solve macroeconomic problems related to national production, employment, and domestic investment.

The workforce is affected by these variables; Both employees and retirees, and of course the reduction in the employment rate, will also harm the Social Security Organization, as the organization’s inputs will be greatly reduced, and this will exacerbate the crisis in the organization.

When the Social Security Organization is harmed, retirees are harmed again because their insurance and medical obligations are disrupted. This vicious cycle continues, and wage earners suffer again and again.

Iran’s economy has become a sick economy. While the government is insisting on the continuation of its nuclear program, so paralleling to this the sanctions are continuing and has increased the expenses but reduced the income, meaning that the government had to pay rent to meet the basic needs.

So, the government lost from both expensive imports and cheap exports, and between these, Iran’s rule is not at an economic winning position and is losing day by day its benefits, which is the reason of it begging for the JCPOA (Iran nuclear deal) negotiations.

For two or three years, with inflation of 35% and 40%, the low-income classes, female-headed households, minimum and sub-minimum waged workers, and the unemployed were exposed to severe cultural, economic, and social damage. These injuries have been comprehensive and efficient.

Workers were forced to live on salaries approved by the Supreme Labor Council, which have nothing to do with the inflated living incomes, resulting in problems in all sectors, including housing, treatment, education and even food, and are to cut from their living costs day by day.

And an important point about Iran: wherever we have had rampant inflation, we have seen the poor get poorer and the rich get richer. Inflation seems to act as a reversal flow of the economic shift from the poor to the rich, increasing the Gini coefficient. Of course, lately we no longer know what the Gini coefficient in Iran really is and how much inequality we have.

We are just sure that inequality has increased month by month and year by year, which is a very serious and significant alarm for the rule in Iran who is fearing people’s upcoming escalation and protests against the government, like the gasoline price hike in November 2019.

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