The issue of rising wages of the lower classes and its delay has become a challenging issue for the Iranian government. The government has announced an increase in salaries of its employees by an average of ten percent next year, but the official meetings of the Supreme Labor Council on the issue of the 2022 wages have not yet begun, due to the regime’s critical financial situation.
The fundamental question is whether rising wages equal to the rate of inflation, even slightly higher than the official rate of inflation, can reduce the deep gap between income and the cost of living.
Hossein Gholami (trade union activist) gives a ‘negative’ answer to this question by performing a series of simple calculations.
He believes that increasing wages based on inflation will increase the gap between wages and the cost of living and impoverish the working class. The only solution is to match the wages with the living expenses or the household subsistence basket.
Even if we consider inflation as 50 percent and salary increase as 60 percent, the gap of eight million Tomans between the minimum wage and the subsistence basket will reach more than eleven million Tomans in the next year, because the main problem is the deep gap that has been created over the years.
Whenever wages rise slightly like this year, inflation pushes faster. Therefore, with a 60 percent increase in wages and pensions, the gap between wages and livelihoods will widen again.
With a 60 percent increase in salaries compared to this year, the salary deficit will increase by 3,600,000 Tomans. If salaries were equal to the cost level of 12 groups of consumer goods, i.e., food, medicine, clothing, education, etc., and above the poverty line, an increase in wages commensurate with inflation would work, but since wages are generally one-third to one-fifth of the poverty line, the extent of inflation means the expansion of class gap and conflicts.
In this way, all wage earners become poorer, except those around the maximum wage. The percentage increase is only in the interest of groups with astronomical wages. Low wagers and those living below the poverty line will suffer from this policy.
The 4 million wages must be increased by 400 percent, to reach the top of the poverty line and make it possible to cover living expenses next year.
In recent years, governments have printed about 2 trillion tomans a day and reduced the purchasing power and value of money. If a person could buy 6 kilos of meat for 300 tomans, today he can buy only 2 grams because the value of money has decreased about 4300 times. Therefore, the devaluation of money is a silent withdrawal from the pockets of the people, especially the wage earners who have fixed incomes.
Class conflicts are well illustrated in the regime’s news and media. When they write, a grave in the cemetery of the rich is 2.5 billion tomans, or that some people close to the rule imported cars worth 250 billion tomans or the former head of the central bank says that the value and wealth of the nobles are more than the central bank reserves, it means nothing but an unbridled class conflict.
In 2020, the share of wages in Iran’s GDP reached less than 4 percent; The wage level in Iran’s inflated economy is about one percent. While this rate was around 10 percent in Australia and Spain and 16 percent in Denmark, Norway, and France.
There is a phenomenon called poor workers in Iran, and the government, instead of taking the country’s wealth from certain groups which are the minority and ruling class, are bargaining for the minimum wage.
According to Morteza Afgheh (university professor), “a significant part of the wealth of the people has fallen into the hands of certain people, and since we cannot get this wealth from them, we bargain for the minimum wage of the weak groups of society.’
At present, the minimum wage in the most remote areas covers 30 to 40 percent of the costs.
The regime’s government is constantly theorizing about the negative impact of wages and seeking to persuade society to accept a non-wage increase, while the share of wages in the cost of goods is now less than 5 percent. This figure, compared to other factors of production such as raw materials, transportation, machinery, and other overhead costs, is not a significant figure at all and is almost zero.