Iran’s 45% minimum wage increase faces criticism over inflation gap

Iran’s Supreme Labor Council approved a 45% increase in the minimum wage, setting the new base salary at 104.4 million rials ($110) per month, but the decision has drawn criticism from lawmakers and labor representatives who argue that it fails to match rising living costs.

Despite the wage hike, workers' representatives had demanded at least a 70% increase to keep pace with inflation.

The council did not issue a decision on housing allowances, leaving it at 9 million rials ($9.50) per month, while rent for a 50-square-meter apartment in Tehran averages 150 million rials ($160) per month.

Hussein-Ali Haji Deligani, a member of parliament, dismissed the 45% wage increase as insufficient in the country's collapsing economy.

“With 100 million rials ($106), a family cannot survive,” he said, calling for a fundamental adjustment of wages to match inflation.

The increase is 10 percentage points higher than last year’s 35% wage increase, but some lawmakers emphasized that percentage gains mean little when purchasing power declines.

Mojtaba Yousefi, an MP from Ahvaz, pointed out that “when wages rise slower than inflation, workers’ real income drops by 20%.”

According to Iran’s labor law, the minimum wage must be set in accordance with inflation and provide for a household’s basic needs.

Inflation has been consistently around 50 percent and the economic crisis has significantly diminished the purchasing power of ordinary Iranians, leading to tens of millions falling into the category of working poor.

Experts highlight that the poverty line for Tehran residents is approximately 300,000,000 rials (approx. $600) per month, three times the current minimum wage.

Ali Babaei Karnami, head of the parliamentary Social Committee, previously said that any increase below 50% would be “a deviation from the law.” He also cited reports estimating a household’s essential expenses at 260 million rials ($277) per month, more than twice the newly set minimum wage.

Under the new system, a married worker with two children will see their total monthly income rise from 116.9 million rials ($124) to 163.5 million rials ($174), while a single worker without seniority will earn 134.9 million rials ($144), up from 94.6 million rials ($101).

Each year, Iran’s labor ministry convenes negotiations between worker and employer representatives, but two key factors ultimately determine wages: the government’s salary increases in the annual budget and the inflation rate reported by the country’s statistics agency.

Critics argue that raising wages without broader economic reforms risks fueling further inflation while failing to improve workers’ real incomes. At least one third of Iran now lives below the poverty line.

In dollar terms, wages have barely grown due to the weakening rial, leaving many workers effectively poorer despite nominal increases.