Minimum Wage Covers Only 8 Days of Expenses/ What Is the Cost of the Living Basket?

A former member of the Supreme Labor Council says the cost of the household living basket for workers has reached 91 million and 300 thousand tomans, and that the minimum wage, which when approved in Esfand 1404 equaled 15 days of a family's living costs, now covers only 8 days. Despite a forecast of a wage review by the end of Shahrivar, the Supreme Labor Council has yet to convene to review restoring wages, and workers' purchasing power remains under pressure.

The former member of the Supreme Labor Council, announcing that the cost of the subsistence basket of the working family has reached 91 million and 300 thousand tomans, says that the minimum wage, which was equal to the cost of 15 days of a family's life when it was approved in March 1404, now only covers the cost of 8 days. This is despite the fact that the wage revision is expected by the end of September, the meeting of the Supreme Labor Council to review the wage restoration has not yet been held and the purchasing power of workers is still under the pressure of inflation.

According to Ambassador Arjan, the increase in living costs has deepened the gap between workers' wages and livelihoods in the first half of the year; A gap that, according to Faramarez Tawfighi, a former member of the Supreme Labor Council, even a multi-million wage increase alone cannot compensate. In a conversation with Ambassador Arjan, while criticizing the postponement of wage revision and the weakness of workers' organization, he believes that until inflation is curbed and workers do not have effective bargaining power, the nominal increase in salaries cannot lead to a sustainable improvement in livelihoods.

Faramarz Tawfighi, a former member of the Supreme Labor Council, announced that the cost of the subsistence basket of a working family has reached 91 million and 300 thousand tomans. He says that the minimum wage, which was equal to the cost of 15 days of a family's life when it was approved in March 1404, now only covers the cost of 8 days. This is despite the fact that the wage revision is expected by the end of September, the meeting of the Supreme Labor Council to review the wage restoration has not yet been held and the purchasing power of workers is still under the pressure of inflation.

According to Ambassador Arjan, the gap between wages and living expenses has increased in a situation where the Supreme Labor Council was supposed to make a decision on revising the livelihood basket of working families before the end of September, according to the 1405 wage resolution. However, with the passage of a significant part of October, neither the meeting of wage restoration was held nor the wage committee convened to determine the new costs of living.

In a conversation with Ambassador Arjan, referring to the calculations made based on the method of the Wage Committee and the statistics of the Iranian Statistics Center, Tawfighi announces the cost of the livelihood basket of a working household as 91 million and 300 thousand tomans; According to him, this figure shows a sharp drop in the purchasing power of workers within a few months.

He believes that the increase in the cost of living has quickly eliminated the effect of the annual wage increase. In this way, even if the wage increases at the time of approval according to the existing indicators, the continuation of the inflationary process can reduce the purchasing power of workers again in a short period of time.

Why is the multi-million increase in wages not enough?

Tawfighi believes that discussing the increase of two, three or even five million tomans in wages, regardless of the speed of the growth of living expenses, cannot be the answer to the workers' livelihood crisis.

According to him, the livelihood portfolio has increased by about 50 million Tomans within six months; An increase that shows that even raising the multi-million salary is not proportional to the growth of essential household expenses.

From the point of view of this former member of the Supreme Labor Council, the problem is not only the amount of nominal salary increase, but the ratio of wages to the real cost of living and the speed of change of this ratio throughout the year. In inflationary conditions, salary increase by itself does not mean improvement of livelihood; Especially if the price of essential goods and services increases faster than household income.

He also criticizes the non-holding of meetings of the wage committee and emphasizes the necessity of continuously updating the calculations related to the livelihood basket. According to Tawfighi, until the real costs of living are regularly reviewed and the results of these reviews do not lead to effective decisions, the wage determination mechanism cannot be expected to prevent the reduction of workers' purchasing power.

criticism of economic policies; The market does not obey the government

Tawfighi further considers livelihood problems to be more than the difference over the wage figure and criticizes the ineffectiveness of economic policies in curbing inflation. According to him, government actions do not necessarily lead to price control, and the market does not always follow official decisions.

Referring to the role of influential economic groups in decision-making relations, he believes that the weak bargaining power of large groups such as workers, along with the influence of some economic interests, can lead to the continuation of policies that are not beneficial to the majority of society.

Read the full text of Ambassador Arjan's conversation with Faramarz Tawfighi here.

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