Government Seeks 20% Wage Increase; A Trade Group: It Only Means Making the Poor Poorer

On Tuesday, October 23, Iranian media reported that according to Article 12 of the next year's budget bill, the wage coefficient for various groups of wage earners will increase by 20%. In this regard, a trade group emphasized that this level of wage increase 'only means making the poor poorer.' According to some media reports, as in recent years, the amount of wage increases for employees has been the basis for determining workers' wages, the government, considering the anticipated 20% increase in employee wages, is seeking a 20% increase in workers' wages in the Supreme Labor Council meeting. The government news agency ILNA reported that while the government has set a 20% increase in the budget bill for the wages of employees and retirees, the annual inflation rate was reported to be over 34% in September. ILNA also quoted Akbar Shokat, a labor activist and head of the Construction Workers' Trade Association, saying, 'When the wage for employees is set below the inflation rate without regard to living conditions, it indicates that the mindset that prevailed in the previous government’s budget organization still persists, and there has been no tangible change.' Shokat stated that with inflation rates between 35% to 40%, setting a 20% base wage for government employees is completely unreasonable. He emphasized that 'workers' wages should be determined according to labor law, and the most important principle in determining workers' wages is that workers can meet their basic needs.' Two clauses of Article 41 of the Labor Law consider the inflation rate and the monthly expenses of a working-class household as criteria for increasing the minimum wage. However, labor activists and organizations have repeatedly emphasized that the Supreme Labor Council ignores the clause related to living costs. Akbar Shokat noted that over the years, wages have diverged significantly from the inflation rate. Currently, the minimum wage for workers subject to labor law, married with children, is about 11 million tomans, while the monthly livelihood basket is about 37 million tomans. Some experts believe that housing costs take up a significant portion of workers' income, forcing them to cut many essential expenses, including health, treatment, and education, from their lives. Reports indicate that setting wages without considering inflation and workers' living conditions has led to a severe reduction in the per capita consumption of many essential items, including meat, chicken, dairy products, milk, and even bread for lower-income deciles. Meanwhile, the Telegram channel 'Retirees' Union' wrote that 'after repeated promises from Medicalian regarding improving the situation of retirees and adjusting retirees' wages, it has now become clear with the 20% wage increase and a negligible amount under the title of difference that this government has no plans for fundamental changes in the course of Iran's economy.' This trade group concluded that with this 20% increase, 'there will be no relief in the livelihoods of workers and active and retired employees, and the downward trend of incomes against the inflation monster will continue.' The Retirees' Union emphasized that 'the 20% wage increase for active and retired employees in the budget bill, against the 50% or 60% or even more increase in goods, means nothing but making the poor poorer.'