A Labor Activist: The Government Undermined Workers' Purchasing Power by Circumventing Article 41 of the Labor Law

Ali Babaei Karanameh, the head of the so-called "Labor Faction" in the Islamic Consultative Assembly, called on Wednesday, December 20, for decisions regarding wage increases for workers to be based on inflation in society. In this regard, a labor activist told Voice of America that the government has undermined workers' purchasing power by "circumventing Article 41 of the Labor Law." According to Tasnim News Agency, Ali Babaei Karanameh stated: "The law should be amended in such a way that representatives of employers or the private sector and representatives of workers reach an understanding, with the government merely as an observer." Previously, the government has been repeatedly criticized by labor activists and organizations for defending employers' positions in the Supreme Labor Council, the authority responsible for determining the minimum wage for workers. Sadegh Kargar, a labor activist residing in Norway, told Voice of America: "The continuous rise in living costs has further weakened the already diminished purchasing power of workers," adding: "The 27% increase in the minimum wage last year, when the official inflation rate was at least 47% and food and housing inflation reached 60%, was conducted by circumventing Article 41 of the Labor Law and was illegal, effectively delivering another blow to workers' purchasing power." Additionally, Article 41 of the Labor Law emphasizes that the minimum monthly wage for workers should be determined based on the inflation rate and the living costs of a household. Nevertheless, even with the insistence of labor organizations recognized by the Islamic Republic, the Supreme Labor Council has never considered living costs in wage determination. Mr. Kargar emphasized that the Minister of Cooperatives, Labor, and Social Welfare has set aside the ruling abolishing Article 41 of the Labor Law as a criterion for wage determination, stating: "This action was taken while household expenses were estimated to exceed 20 million tomans last December and increased to about 30 million tomans by mid-year." The minimum monthly wage for workers subject to the Labor Law, married with children, is about 8 million tomans this year. Tasnim News Agency noted on Wednesday that about 70% of workers' income goes towards rent, forcing them to take on second and third jobs to cover living expenses. Despite all this, the government has opposed wage increases under the pretext of rising inflation. For instance, Ehsan Khandoozi, the government's economic spokesman, stated: "Increasing the minimum wage for workers during inflationary conditions is certainly correct, but this increase should not lead to the destruction of workers' job environment." Sadegh Kargar pointed out that representatives of employer organizations in the Supreme Labor Council and beyond welcomed the open lawbreaking by Solehat Moradi and said: "Now, after sending the budget bill for the coming year, the government intends to increase the salaries of government employees and retirees by 18%, which is less than half of the official inflation rate." This labor activist indicated that reports suggest the same amount of increase is being set for workers' wages next year, adding: "In this case, another 25% of the purchasing power of workers, government employees, and retirees will be diminished." He noted: "The government's policy, which was to freeze wages until last year, has changed to reducing wages since the rise of the Raisi administration." This situation has led to what Sadegh Kargar describes as an "expansion of the protest capacity in society, which we are currently witnessing in the form of daily street protests." He emphasized: "The existence of these wave-like protests and concerns about their consequences has led to conflicts between the government, parliament, and employers over wages," stating: "While all three groups have played a role in reducing purchasing power, they all continue to implicitly support their common wage policy and do not directly support wage increases even to the level of inflation, attempting to shift the blame onto each other." Mr. Kargar added: "Employer organizations that have fallen out with the government, on one hand, and the faction of Ghalibaf, which is engaged in a power and wealth-sharing struggle with Raisi's supporters, are trying to exploit the growing dissatisfaction and protests to their advantage by pretending to oppose the government's wage policies." This labor activist believes: "As long as workers remain divided and disorganized, they will be the main losers in the complex games of the powerful and wealthy, who seek to misdirect their struggles."