Gap Between Employer and Employee Wages: 1.5 Million Toman

Rooz Online

While labor activists in Iran believe that the poverty line in the country will rise to over 2 million Toman within a year, the administration plans to raise the wages of workers by only about 100,000 to 120,000 Toman for the new Iranian calendar year which begins next month on March 21, 2014, resulting in more tension between employers and employees on one hand and the administration on the other.

Domestic media in Iran, including Tabnak website affiliated with former Revolutionary Guards commander Mohsen Rezai, published a report, titled “Four Main Scenarios in the Increase of Labor Wages in 2014,” which say, “Evidence indicates that even though the Ministry of Labor has discussed the need to use new methods to calculate the minimum wage rate for next year, the increase in the wage rate for workers that are governed by the labor law will follow the same rules that the High Labor Council had determined at least ten years ago.” This dashes the hopes of many workers and labor activists.

Some labor representatives have openly said there is no hope for a fundamental change in labor wages in the coming year and that at best the rate will increase by 100,000 or 120,000 Toman, which is the same amount that it has been increasing annually in recent years and short of the expectations of workers, some official labor organizations and even the Ministry of Labor.

Earlier this year, the Ministry had recommended using a new method to calculate wage increases to that there would be a 20 percent monetary raise and a 25 percent increase in goods for the coming year. Employers on the other hand had recently announced that they could not sustain more than a 20 percent wage hike that the government had recommended for its staff.

Deputy Labor Minister Ali Akbar Sayareh had suggested last week that representatives of labor and employers should consider a 2 rate increase for next year, one for workers under the age of 30 and the other for those over 30. He told ISNA student news agency that employers and employees should present their recommendations for a wage increase above the amounts determined by the High Labor Council for workers of the mines industry. A workgroup has been set p to determine the rate for next year and such talks are now in progress at the highest labor organizations in the country. All views will be considered in the High Labor Council.”

A 20 percent increase in the labor wage rate would mean a 541,000 Toman increase in monetary terms which would be still lower than the poverty line that has been officially announced.

At the same time, the labor union for contract workers issued a statement, published by ILNA, which says that the recent developments and recommendations for increasing the labor wages for next year have been disconcerting. “Despite the 31.5 percent officially announced inflation rate the High Labor Council only recommends a 25 percent increase in the minimum wage rate, which is the final strike at the labor community … and the 50 percent increase in the cost of living of a family’s basic basket of commodities compared to last year and a two fold increase in the price of these goods compared to the officially announced inflation rate.” The statement acknowledges that there is a big difference between the official and real rate of inflation which has resulted in a wide gap between income and the expenses of employees. It recommends that the Council create a group of representatives from the government, employers and employees who would work to come up with a formula to reduce this gap.

Alireza Mahjoob, the secretary of the Khane Kargar (Labor House, the official labor union in the country) also said that the representatives working on the new wages should consider real inflation and what has not been taken into account in recent years and that the “amount should not be less than a million Toman.”

In a report on the labor situation, Bahar No website wrote that labor representatives had told the minister of labor that the poverty line stood at 2 million Toman. It said some 3.5 million workers who fall within the rules of the labor law receive only 486,000 Toman a month as their wages. “The monthly monetary need of a worker’s family has increased by one million Toman this year and from the total 11.5 million works who fall under the labor law only 3.5 workers receive the minimum amount set by the High Labor Council, which for the current year stands at 486,000 Toman.”