Iran’s ‘Livelihood Basket’ Rate Reaches 11 Million Tomans

At a time when all economic data in Iran shows the shrinking of people’s livelihood basket, especially the lower-income deciles, and many goods, even the simplest and most basic ones, including rice and dairy, are disappearing from the weekly shopping cart of households, the government is advertising the slogan of the impossible control of the Inflation rate.

Meanwhile, the authorities are trying to highlight inflation control as a strategy for the government instead of providing the minimum living basket of the working classes and their families.

Therefore, considering the inflation rate mentioned in paragraph 1 of Article 41 of the Labor Law, more important than the minimum subsistence basket which is an irrevocable obligation in paragraph 2 of this article is a betrayal to the poor and lower classes, while official inflation is still breaking its previous records and there is no sign that it can be controlled for at least the next two and even more years. Even the 60% forecast inflation shows that in a few months, consumer inflation will increase again.

According to the National Statistical Center of Iran, the inflation rate of August 2021 was 45.2 percent, which represents a one percent growth rate compared to the previous month. Spot inflation reached 43.2% in August 2021, meaning households in the country spent an average of 43.2% more than in August 2020 to buy a ‘uniform set of goods and services.’

The spot inflation rate of the major ‘foods, beverages and tobacco’ group increased by 1.5 percent to 58.4 percent and the ‘Non-Edible Goods and Services’ group dropped 1.3 percent to 36.1 percent.

These official statistics show that the nutritional crisis of the working class and wage earners (including employed, retired, informal, seasonal, and project workers) is an ultimately serious crisis, and the greatest pressure from the cost of food is imposed on lower households.

Of course, we should keep in mind that housing costs and housing rent have no place in the statistical basket of the Statistical Center of Iran and the increase in housing costs is not involved in inflation calculations that if the real increase in the rent rate is calculated, in this section we will also have point-to-point inflation of more than 100 percent, i.e., households spending more than 100 percent more than the same month last year.

However, this reduced basket shows that in August 2021, households spent about 60 percent more to finance essential foods than in August of last year. And in the same period, the wage increase won’t reach 40 percent.

Now the question is when the inflation rate (even in the most diminished calculations possible by the Statistical Center of Iran) is rising permanently, how does the Labor Minister claim that wages cannot be raised because employers are losing money and should resort to curbing inflation?

Livelihood basket calculations are based on calculating the rate of raw items of foods and beverages in the food basket, which is unrealistic and does not match the real needs of the people’s baskets, which is the ‘real food’.

The overall livelihood basket is 8.866 million tomans, and if we consider the calculated livelihood basket for the wage negotiations of 2021, which was rated 6.895 million tomans for comparison, we will reach a different number of 1.970 million tomans, so in the most minimal calculations, the cost of living in the first five months, has increased 1.970 million tomans and the level of coverage of the 4 million tomans wages is about 45 percent of the wages. That means the people’s wages cover only about 13 days.

Overall, the ‘livelihood crisis’ is expanding and deepening further. While inflation is increasing without any end in sight, and all official data prove this claim, the minimum livelihood basket rate has reached about eleven million tomans and workers live nearly 19 days each month without any purchasing power as many officials say, while the numbers calculated in this text are the most optimistic figures.