Iran's government struggles to raise wages as prices soar
Chief Editor of Iran International English website
Less than a week before the start of the new Iranian year, the government has yet to set new wages, which are adjusted annually for tens of millions of public and private sector workers.
The challenge is that last year’s high inflation would require tripling the current minimum monthly wage, which has fallen to the equivalent of $120. However, Iran’s deep economic crisis makes it nearly impossible for government-controlled enterprises to absorb such a sharp increase in labor costs. According to official estimates, a family of three needs at least $400 per month to cover basic necessities.
Even mid-level government employees, such as ministry press secretaries, earn only about $160 a month, a well-informed source in Tehran told Iran International. While this amount has greater purchasing power in Iran than in the US or Europe, it still represents a poverty-level income.
A meeting between government, business, and labor representatives is scheduled for March 11, but sources told local media that no decision is expected. With Nowruz beginning on March 20 and food prices soaring, many Iranians are struggling to afford holiday shopping.
An economic analyst in Tehran told Iran International that retail markets are stagnant as people cannot afford New Year shopping. Basic food prices have risen 30 to 100 percent since early January, driven by the Iranian currency losing half its value against the US dollar in recent months. This depreciation directly impacts the cost of food imports as well as machinery, fertilizers, and other agricultural necessities.
Meanwhile, the Trump administration is tightening economic sanctions, threatening to further reduce Iran’s oil exports—the backbone of its centrally controlled economy. Washington is demanding that Tehran abandon its nuclear program, but Supreme Leader Ali Khamenei has so far rejected negotiations on President Donald Trump’s terms.
By comparison, minimum wages in neighboring Iraq are twice as high as in Iran, while in Turkey, the minimum wage is nearly seven times greater, reaching $8,000 per year. With the current exchange rate, the average salary in Iran does not exceed $1,500 annually.
This growing financial hardship has sparked concerns of social unrest, similar to the mass protests of 2019 and 2022. Warnings about the risk of an uprising are appearing on social media and even in state-controlled media, as poverty spreads to the lower middle class.
Before the 1979 revolution, Iran’s urban middle class enjoyed rising living standards, with increasing access to homeownership, cars, and foreign travel. Today, economic pressures are reversing those gains, fueling discontent across the country.
