Anomalies in Iran's Labor Market

Fereydoun Khavand, an economics professor in Paris, has discussed the unemployment situation in Iran in an interview with Reza Valizadeh from Radio Farda. The Statistical Center of Iran reports a decrease in the unemployment rate from winter 2014 to spring of this year. What positive event in the Iranian economy has led to this decline in unemployment? In the latest report from the Statistical Center regarding Iran's labor market, one can see either the half-full or half-empty glass. The half-full, or optimistic view, emphasizes that the unemployment rate in Iran has decreased from 11.5% last winter to 10.8% this spring, even as the participation rate (the ratio of the active population, including employed and unemployed, to the working-age population multiplied by 100) has slightly increased. Conversely, if we want to see the half-empty glass, we note that the year-on-year unemployment rate has increased by 0.1% from spring 2014 to spring 2015. The reality is that these figures only account for absolute unemployed individuals, or those who, based on International Labor Organization standards, did not work even one hour in the week prior to the survey. The Statistical Center announces the number of unemployed in the country as two million six hundred and forty-seven thousand. If we also consider those who are underemployed or have given up searching for work, the number of unemployed rises to over four million, and the unemployment rate exceeds seventeen percent. Has there been any change in Iran's labor market during Hassan Rouhani's presidency? There has been no change in the anomalies of Iran's labor market, which resembles the labor markets of many other countries in the Middle East and North Africa. The participation or activity rate in Iran is only 38%, while the global average for this indicator reaches 65%, particularly due to the very low share of women in Iran's labor market and the number of people who have left the labor market out of despair or turned to activities like street vending to make a living. Media in Tehran speak of an explosion of street vending in the country's major cities. Another significant anomaly is the rampant development of higher education institutions, many of which have no connection to the country's economic needs, and their graduates, due to lack of employment opportunities, are ticking time bombs for Iran's labor market. What is the solution? What can be done to combat unemployment? There is only one way to combat unemployment, and that is economic growth. If China creates eleven million net jobs a year and the United States creates 220,000 net jobs a month, the only reason is growth. Iran needs a growth rate of seven or eight percent per year, which is only possible through increased investment from domestic and foreign sources. On the other hand, only by freeing energies in the private sector can we fight unemployment. An economy trapped by the government and quasi-government monopolies cannot create job opportunities.