Iran: Minimum Wage and State Manipulated Food Baskets

The government has drawn a new plan to impose wage suppression on workers; reducing the required calorie intake and the amount of expensive food items.

The bargaining process over the 2024-25 wages in the Supreme Labor Council has been prolonged, as in previous years. In the absence of real representatives of workers and independent associations in the Supreme Labor Council, the tripartite representation of government officials, employers, and representatives of worker associations affiliated with the government has turned into a vulgar show to impose wage suppression.

The government, acting as a mediator between workers’ representatives and employers, is not only biased but also serves as the largest employer, benefiting greatly from exploiting workers with low wages. In 2008, by changing the guidelines for the formation and management of the Supreme Labor Council, the impact of the council’s worker members was minimized.

According to these guidelines, five of the eleven members of the Supreme Labor Council are from the cabinet or appointed by the government, three are representatives of the employers, and the other three are workers’ representatives. The workers’ members of the council are introduced by the supreme centers of official workers’ associations, namely the Islamic Labor Councils and the officially recognized trade associations by the government. The government directly intervenes in the selection of the council’s worker members and prevents the presence of representatives from independent worker associations such as syndicates or independent trade associations and public assemblies in the council. The government’s intervention in determining the workers’ members of the council has recently included the representatives of the Islamic Labor Councils, and the Minister of Labor, acting as the secretary, has dismissed Ali Khodaei, the representative of the supreme council of Islamic Labor Councils.

In the amendment to Article 5 of these guidelines, which states that meetings are valid with the presence of seven official members and decisions are valid with a majority vote, the worker members are nullified if they disagree with the council’s decision. The minimum wage announcement by the Minister of Labor without the signature of the council’s worker members in 2020 and ignoring the opinions of the worker members in subsequent years are among the evidence confirming the decorative presence of the worker members in the Supreme Labor Council.

The Regime’s Innovative Approach:
Cutting the Caloric Content of the Staple Diet

Following the same trend, after failing to impose regional wages on workers, the government has found a new strategy to prevent wage increases based on the cost of living basket; tampering with the food basket and reducing the required daily calorie intake to artificially decrease the cost of living basket.

An representing the Islamic Labor Councils in the Supreme Labor Council meetings and wage negotiations, revealed in an interview with Etemad newspaper: “The Ministry of Health has reduced the daily nutritional needs for beneficial food items in a new table presented to the Supreme Labor Council.”

According to him, the Nutrition Institute of the Ministry of Health has reduced the daily need for bread, rice, red meat, white meat, sugar, and fruits in the new food basket presented to the Supreme Labor Council, kept the daily need for vegetable oils, potatoes, and vegetables stable, and increased the daily need for pasta, eggs, legumes, and dairy products. However, there is no mention of the share of aquatic groups (fish and shrimp) in this table.

Red and white meats lead the official inflation rate in 2023. In February, the inflation rate for these protein foods reached 93%. The average price increase for fish was reported at 64% in the same month. According to unconfirmed reports, per capita meat consumption has decreased by nearly 100% due to inflation and has reached zero among the poorest layers.

Comparing the food basket presented with those of 2008 and 2011 shows that the government has reduced the share of protein foods and also goods that might be affected by price liberalization policies or fluctuations due to reduced imports, replacing them with starchy foods or foods with low nutritional value, and has also reduced the required calorie intake by about 80 units.

According to Bagheri, a representative of the Ministry of Health and Medical Education justified the manipulation of the food basket at a meeting of the Supreme Labor Council, stating, “Due to the high obesity rates in the country, the required calorie intake in this food basket has been reduced.” The reason given by the Ministry of Health for reducing rice and bread in the food basket is “the problem of water scarcity and high water consumption of rice and wheat.”

The head of the wage committee of the Supreme Council of Islamic Labor Councils said the Ministry of Health did not invite labor representatives to the consultation meeting for changing the food basket, and “from the perspective of the labor community representative in the Supreme Labor Council’s wage committee, a one-sided, politically motivated food basket has been prepared and presented in line with making the workers’ cost of living basket cheaper.”

Customized Food Basket

The decrease in purchasing power due to increasing inflation and wage suppression has forced workers to eliminate some foods and change their consumption patterns; a situation that has led some governmental institutions to warn about the decrease in calorie intake per capita and the increase in hunger among the poor. The thirteenth government, which implemented price liberalization policies as an effective factor in increasing the average price, has, instead of compensatory policies, ordered the Ministry of Health to draft a new food basket according to the consumption pattern imposed on wage earners.

Etemad, quoting a source from Beheshti, University of Medical Sciences, wrote: “This year, the Ministry of Health, disregarding the ‘food basket’ developed by this institute, has set up a new table in line with the desires of the Supreme Labor Council and with numbers much lower than the nutritional realities to base the determination of the cost of living and wages of workers in 2024 on this unrealistic food basket.”

This table has been compiled without consulting the Nutrition Research Institute and against the principles of food science. Food baskets are developed with three models: minimum, maximum, and optimal baskets.

The government has always used the minimum basket as a criterion for determining subsidies and wages, therefore, anyone receiving food less than the minimum basket will definitely face physical problems. The Ministry of Health has not only ignored the numbers of the minimum basket but has also sabotaged by manipulating the figures calculated by the Nutrition Research Institute, to ensure that the results of the Supreme Labor Council meetings are entirely in favor of the employer group in approving the minimum wages of workers.

When the basic standard for the need for food items in the food basket is low, workers cannot expect a higher standard of living, and therefore, the increase in workers’ wages in 2024 will definitely be minimal.”

Employers Hold Wages Hostage

The alignment of employers with the state in the Supreme Labor Council and the susceptibility of the council’s worker members, who have occupied the seats meant for independent worker representatives, leaves no hope for ending wage suppression. The government opposes wage increases in line with living costs under the pretext of controlling liquidity and inflation, and employers cite the incapability of enterprises to pay wages.

One of the three employer representatives in wage negotiations, while advocating for an increase in workers’ purchasing power in a radio program, said that small and medium enterprises would struggle with wage increases, affecting ongoing production and making budget provisioning and survival difficult in these tough economic conditions.

One of the member of the Supreme Association of Employer Syndicates, expressed similar sentiments, saying, “Industries cannot afford to pay even the minimum wage, which is already low. Workshops are operating at one-third capacity and are shutting down.”

Threatening to halt production and the subsequent unemployment of workers is the most repeated excuse by employers in opposing realistic wages. In previous years, they have used the same tactic, with the state’s support, to prevent wage increases based on the cost of living and tangible inflation.

Cost of Living Basket: 32 Million Tomans
Minimum Wage: Maybe 10 Million Tomans

The cost of living basket of 32 million Tomans would be approximately 107 Euros.
The potential minimum wage of 10 million Tomans would be approximately 33 Euros.

The Supreme Labor Council is set to determine the cost of living basket in its next session, to subsequently approve a wage lower than the determined amount and impose it on workers. Non-worker members of the council have not yet commented on the potential amount of the cost of living basket. However, different figures ranging from 23 million to 32 million Tomans have been mentioned among representatives of government-affiliated worker organizations.

The latest estimate by the Wage Committee of the Tehran Islamic Labor Councils Coordination Center assessed the cost of living for a four-person household in Tehran at 32 million and 850 thousand Tomans, and at the national level at 26 million and 550 thousand Tomans.

The head of the Wage Committee of the Tehran Islamic Labor Councils Coordination Center said this figure is based on the daily need of a four-person household to receive 3000 calories. According to him, the calculated basket includes 12 basic items, ranging from beverages and food to education, entertainment, housing costs, and more.

The Ministry of Labor, representing the government in wage negotiations, however, makes it impossible to approve an amount equivalent to half of the estimated cost of living basket. The ministry had told domestic media that the Supreme Labor Council has “analyzed the current situation and requirements of economic enterprises, considering the preservation of employment and protection of the workforce, the payment capacity of industries, and the proportionality between the rights and earnings of employees in the public and private sectors in determining wages.”

The head of the Planning and Budget Organization, in vague remarks, had referred to “expected inflation” as the basis for the minimum wage in 2024, which could mean an increase less than the official inflation rate announced by the Statistical Center.

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My journey in creating this space was deeply inspired by James Baldwin’s powerful work, “The Fire Next Time”. Like Baldwin, who eloquently addressed themes of identity, race, and the human condition, this blog aims to be a beacon for open, honest, and sometimes uncomfortable discussions on similar issues.

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