Skilled Workers Leave Iran Due to Wage Suppression
by Zamaneh Labor Group — 21December2023
Skilled workers are unwilling to work due to low wages. The government has no intention of making wages realistic. The continuation of this situation will confront Iran’s industry with a crisis of labor shortage.
The exodus of skilled workers from production units in Iran has caused factories and production enterprises to face a shortage of skilled labor. The Ministry of Cooperatives, Labor, and Social Welfare, which has prevented wage increases based on the actual inflation rate, claims that reducing the income and expense gap “has satisfied workers.”
The shortage of labor in production units was also acknowledged by the Deputy Minister of Cooperatives, Labor, and Social Welfare. He stated on December 19:
“Many employers looking for skilled workers and specialists have been unable to attract the necessary workforce despite months of effort.”
Before him, some provincial managers and members of the Chambers of Commerce had reported a shortage of skilled workers and workers’ reluctance to work for meager wages. The Deputy Minister of Labor confirmed that provinces like Semnan, Yazd, East Azerbaijan, and some parts of Bushehr are facing a more significant crisis of labor shortage and said that the government “is trying to put job seekers in the hands of employers through various actions.”
Younes Zhaeleh, the head of the East Azerbaijan Chamber of Commerce, had previously reported the shutdown of some production lines in factories due to a severe shortage of labor. He had said:
“The supply of skilled human resources and workers in enterprises has become a major challenge, and some production lines with billion-dollar investments in this region are shut down due to the lack of labor force, even though they have no problem with sales and expenses.”
The exodus of skilled workers from the labor market has one cause; the meager wages that now cover less than a third of a household’s expenses. Independent labor organizations, which were sidelined from the annual minimum wage negotiations, demanded last year that the minimum wage be increased to 17 million tomans. However, the Supreme Labor Council imposed a wage of less than eight million tomans on workers. Repeated promises by representatives of the House of Labor in the Supreme Labor Council to adjust wages have not been fulfilled, leading to an income and expense gap for workers in big cities of more than 12 million to 17 million tomans and in smaller cities of six million to eight million tomans.
Hassan Lotfi, a member of the Social Commission of the Islamic Consultative Assembly, admitted on December 16 that workers’ wages are negligible compared to living expenses, saying: “For a worker who earns seven million tomans and pays one million tomans for transportation and at least four million tomans for house rent, what is left?”
He called the government a supporter of employers in the Supreme Labor Council and added: “When it comes to wages and salaries, there is no one to consider the needs of the worker, whether they have housing or not.”
Lotfi continued, stating that “day by day, companies are facing a shortage of workers,” and said: “Many workers and even employees find that their income and expenses do not match, and for this reason, they turn to odd jobs.”
Similar statements to what this parliamentary representative said had been previously made by labor activists and members of government labor organizations participating in wage suppression. Akbar Shoukat, the head of the Building Workers’ Trade Association, said in July 2023: “The wage set by the Ministry of Labor for workers is not enough for their lives, and for this reason, workers prefer to go to odd jobs and brokerage, which are more profitable, instead of working in a production unit.”
Skilled Workers Migrate
The website “Economy 24” wrote on December 20: “An examination of the problems of economic enterprises shows that the migration of skilled labor and technicians to neighboring countries has become one of the main challenges of these enterprises and has caused a shortage of labor in their production units.”
This media, quoting Ehsan Soltani, an economic researcher and university lecturer in Iran who criticizes the policies of price liberalization, reported the migration of skilled workers and technicians to Iraq.
“Iranian labor migration to Iraq has become common….Naturally, when a worker can earn at least $600 a month in Iraq, why should they miss this opportunity? Iraq is not the only country attracting skilled Iranian workers. Saudi Arabia and Turkey are also among the countries attracting Iranian skilled workers.”
Soltani described the migration of educated labor force alongside the migration of skilled workers as “another bad event that has happened” and warned that “soon we will not only face a crisis of lack of workers, but also a lack of doctors, engineers, and specialists.”
Nasser Chameni, the former head of the Supreme Council of Labor Associations, also confirmed the migration of skilled workers to Iraq and especially to Erbil in the Kurdistan Region on December 10. He said: “The base salary in this country is 25 to 30 million tomans, and due to the high wages in countries like Saudi Arabia, Bahrain, and Kuwait, the number of Iranian workers is not small.”
He stated that the wages of workers in countries like Turkey, Iraq, Azerbaijan, the Emirates, etc., are two to three times higher than the wages of workers in Iran, and considered a wage of 10 to 12 million tomans for migrant workers, especially Afghan workers, as “not profitable” and said that they are also not willing to work with this wage.
Government Prepares for Wage Suppression
The wages of workers, with all their benefits, are equivalent to less than half of the poverty line of 30 million tomans and do not cover the expenses of a worker’s family for even a week. In such circumstances, the statements of government officials about the minimum wage in 2024 show that there is no will to make wages realistic.
The Minister of Economy specifically considered wage increases inflationary and contrary to what he called the government’s “anti-inflation policies.” The Minister of Cooperatives, Labor, and Social Welfare has also left the wage increase to social partners. In the absence of representatives of independent labor organizations in the Supreme Labor Council, members of the satellite organizations of the House of Labor are present as “representatives of workers” in wage negotiations. They have surrendered to the government and employers in all past years.
The proposal for an 18% increase in the salaries of government employees in the budget bill can be considered the government’s position in determining the minimum wage for workers. Representatives of employers, who enjoy special government support, have always opposed wage increases based on living expenses and claim that a sudden increase in wages will lead to more worker layoffs.
All these statements indicate the government’s decision to once again impose wage suppression on workers who have become poorer in recent years.
