“15 Days Became 8!”: Workers’ Purchasing Power Collapses in Six Months / Unraveling the Uncertainty Over Wage Adjustment / Is a 5-Million Raise No Longer a Solution?

A former member of the Supreme Labor Council, noting that the cost of the worker household living basket has risen to 91 million and 300 thousand tomans, says the minimum wage approved in Esfand, which at the time of approval equaled the cost of 15 days of a family’s living, now covers only 8 days.

According to Ambassador Arjan's report, wages lagging behind the cost of living has once again turned the issue of workers' livelihood into one of the main challenges of Iran's economy. The increase in the cost of the livelihood basket and the decrease in the purchasing power of the minimum takers occurs in a situation where the legal mechanisms for determining wages and following up on labor demands are also facing criticisms about the effectiveness and executive power. In such a situation, the question is not only how much the wages of workers should increase, but whether the current structure of decision-making in the field of labor and economic policies of the government provides the possibility of compensating the wage lag and curbing the pressure of living.

Although the Supreme Labor Council had emphasized in the wage resolution of March 1404 to make a decision on the restoration of the minimum wage before the end of Shahrivar, a significant part of the month of Mehr has not yet held a meeting to restore the wage and even the wage committee does not hold a meeting to determine the minimum cost of living.

Faramarz Tawfighi, a former member of the Supreme Labor Council and a labor activist, referring to the increase in living costs and the decrease in the purchasing power of workers, says that the calculations made for the subsistence basket of the labor household, based on the method used by the Wage Committee and relying on the figures of the Iranian Statistics Center, have reached a figure equal to 91 million and 300 thousand tomans; A figure that, according to him, shows a significant gap between the minimum wage and the real cost of living.

A former member of the Supreme Labor Council's Wage Committee in an interview with Ambassador Arjan says: "The livelihood basket has reached 91 million 300 thousand tomans; It means that the current minimum wage is enough for a family to live for 8 days. On the day of approval of the wage, on March 25, the minimum wage was equivalent to the cost of 15 days of living, but now this amount has been reduced by half.

According to Tawfighi, this comparison shows how the increase in the cost of living can destroy the achievement of the annual wage increase in a short distance. In such a situation, even if the wage increases at the time of approval according to the existing indicators, the continuation of price growth causes the purchasing power of workers to decrease again.

Criticizing the process of following up wage approvals, he believes that the issue of wages has been sidelined during political developments and discussions related to the impeachment of the Minister of Cooperatives, Labor and Social Welfare. According to him, the labor representatives in the Supreme Labor Council do not have enough executive power to impose their demands, and even the council's approvals may actually be out of the decision-makers' priority.

The former member of the Supreme Labor Council emphasizes that the task of impeaching the Minister of Labor should be clarified as soon as possible; But if this issue is not on the agenda, the decision-makers and representatives must return to the issue of wages and the implementation of wage approvals.

Why are workers' wage demands sidelined?

This labor activist believes that one of the basic problems of workers is the weakness of the organized power to pursue demands. From his point of view, in a situation where the cost of living increases rapidly, workers need organizations to defend their rights that can follow their demands continuously and effectively in the decision-making process.

Criticizing the performance of some labor representatives, he says that it is expected that the pursuit of wage demands will be prioritized in the current difficult situation; However, according to his belief, part of the workers' representative capacity has been spent on taking a position on officials and defending individuals, without bringing a clear result to improve the living conditions of workers.

Pointing to the positions of some officials and representatives, Tawfighi says that the comments made in the name of supporting the workers do not necessarily match the real demands of this group. In his opinion, the criterion for evaluating the performance of labor representatives should be the extent to which they affect the wage and living conditions, not just attending political discussions or announcing public positions.

In this context, he considers the weakness of workers' organization as one of the factors of the continuation of the existing situation and believes that a part of the society that does not have effective organization and bargaining power becomes more vulnerable to economic decisions and the increase in living costs.

A multi-million wage increase will not solve the problem of poverty

In another part of this conversation, referring to the continuous increase in the cost of living, Tawfighi believes that the discussion about increasing the salary by two, three or even five million tomans, regardless of the speed of the growth of the livelihood basket, cannot be the answer to the livelihood crisis of the workers.

He says: "Increasing wages by two, three or five million tomans is not very relevant in the current situation; Because the livelihood portfolio has increased by 50 million tomans within six months. With this inflationary trend, increasing wages alone cannot solve the problem of poverty."

From the point of view of this labor activist, the main issue is not only the amount of wage increase, but also the speed of price increase and the inability of wage policies to compensate for this increase. If household essential expenses grow faster than wages, even a nominal increase in wages will not lead to a sustained improvement in purchasing power.

This view emphasizes the gap between the nominal increase in wages and the real change in purchasing power. In inflationary conditions, an increase in salary does not automatically mean an improvement in living conditions; Rather, it should be checked to what extent the new salary covers the cost of essential household goods and services and how this ratio changes throughout the year.

Tawfighi also points to the discussion of the formation of the wage committee and criticizes the non-determination of the livelihood basket in the current situation and believes that until there is a specific mechanism to check the real costs of living and follow up on its results, we cannot expect wage decisions to effectively prevent the reduction of workers' purchasing power.

In the same context, he also questions the so-called "Zero Inflation" plan of Tehran Municipality and says that in a situation where the general trend of prices is still increasing, it is not possible to expect such a plan to lead to a sustainable control of inflation without examining the implementation tools and factors affecting prices.

criticism of economic relations; Why does the market not follow government policies?

Tawfighi continues his criticism of economic policy and believes that in the current situation, not only the government's actions have not led to price control, but also the market does not necessarily follow the official decisions.

Referring to some reports and statements made about the role of large economic enterprises in developments related to foreign trade and maritime blockade, he considers these cases as a sign of the complexity of power relations and economic interests. According to him, when interest groups can influence decisions, economic policies may be influenced by narrower interests instead of being adjusted in line with public interests.

However, the claims made about the agreements attributed to an economic group and its details require independent review and valid documentation for definitive adjudication. What is important in Tawfighi's argument is his general criticism of the structure in which he believes that the interests of influential economic groups influence decisions, while large groups of society, including workers, do not have sufficient bargaining power.

He says: "Today we are facing a situation where the market does not obey the government and the government's actions lead to higher prices. This situation shows that we are facing problems beyond everyday economic decisions."

From the point of view of this labor activist, the issue of livelihood cannot be solved only by temporary decisions about wages or price control of a few goods. Until inflation is contained and economic policies can reliably stabilize the cost of living, any wage increases may be dwarfed by price growth in the short term.

What is the prospect of improving the livelihood of workers?

Tawfighi, in summarizing his point of view, expresses pessimism about the rapid improvement of the living conditions of the workers. He believes that as long as relations based on the interests of interest groups prevail over policy making and economic decision-making, and workers do not have effective organizations to pursue their demands, we cannot expect fundamental changes for the benefit of the majority of society.

He says: "I don't think anything positive will happen for the benefit of the majority of people, especially the working class, in the near future, as long as these beneficial relationships dominate the country's decisions."

This assessment once again links the wage issue to two interconnected factors: on the one hand, inflation and the continuous increase in living costs that reduce the purchasing power of households, and on the other hand, the weakness of workers' representation and bargaining mechanisms to influence wage decisions.

In such a situation, determining the wage figure without taking into account the evolution of the livelihood basket and the inflation process, cannot provide a complete picture of the workers' situation. On the other hand, even wage decisions more commensurate with the cost of living may quickly lose their effectiveness if high inflation persists.

Tawfiqi's main concern is that in the absence of curbing inflation and strengthening the power to pursue workers' demands, the gap between wages and living expenses will continue to increase and a larger part of household income will be spent on meeting basic needs; A process that, according to him, does not leave a clear perspective for improving the livelihood of workers without changes in the way of politics and relations governing the labor market.