Incomes That Do Not Cover Minimum Living Costs

The Open Data Iran database is an innovation project aimed at collecting data related to Iran in one place and presenting it in easily accessible formats. Radio Farda, in collaboration with this organization, publishes a series of articles. According to Article 41 of the Labor Law, the Supreme Labor Council is required to determine the minimum wage for workers in different regions of the country or various industries each year. This council has two criteria for determining wages: the inflation rate announced by the Central Bank and the requirement that the minimum wage must be sufficient to support a family with an average number of members. Looking at the minimum living costs announced by the Wage Committee of the Supreme Labor Council for the year 1396 (2017) and comparing it with the statistics released by the Central Bank regarding the income groups for the year 1394 (2015), it can be said that in 1394, about two-thirds of urban households had incomes lower than the minimum living costs. The minimum annual living costs for a household in 1394 were announced in Esfand 1395 (March 2017) by representatives of workers, employers, and the government as 2,489,000 tomans per month for a household of 3.5 members, which amounts to about 30 million tomans per year. Naturally, we still do not know what the income of urban households will be in the coming year. The figures for 1395 have not yet been published, but the figures for 1394 have been released by the Central Bank, and in this article, we will try to see how urban households fared in 1394 by subtracting inflation from the minimum living costs. According to the latest information, the Central Bank announced the 12-month inflation rate ending in Bahman 1395 (January 2017) as 8.7 percent. If we assume that this inflation rate is also predicted for the coming year in the Wage Committee's calculations, we can subtract the total of these two percentages, namely 17.4 percent, from the minimum living costs and arrive at a figure of 2,060,000 tomans (monthly). Based on this calculation, the minimum living costs for an average urban household in 1394 were about 25 million tomans. What percentage of people had the minimums? The Central Bank publishes an annual report on the expenses and incomes of urban households. In part of this report, households are categorized into 15 income groups, and the percentage of households in each income group is specified. In the chart below, you can see these groups. Note that in this chart, the five high-income groups (over 97.3 million tomans per year) are grouped together due to their small percentage. As you can see, six of the 15 groups mentioned in the Central Bank's report in 1394 had incomes of less than 25 million tomans per year. These six groups account for more than 66 percent of urban households. In other words, it can be said that out of every ten households in urban areas of Iran, six households did not even earn enough to cover the minimum living costs. About 30 percent of urban households in Iran also had incomes below 13.5 million tomans - which is almost half of the minimum living costs.