In Iran: 80% reduction in wages

[hashem]

Government of Iran has agreed with 20% increase in wages for the new year. This happens when inflation rate is about 100%. This means actual wages have been reduced by 80%.

Minimum wage is 140$ per month but since Irans currency is losing its value, it would be 70$ by end of the year if inflation rate stays as it is.

Even governmental sources admit that inflation rate is at least 26%. But if we note that Irans currency (Rial) has lost more than 2/3 of its value during the last 2 years, its clear that governmental sources are not trustworthy. 2 years ago one dollar was equal to 11000 Rials. Today its equal to 34000 Rials. Since most of the goods are imported from abroad and governmental subsidies have been removed, its clear that government is lying. Even price of governmental services like insurance were increased more than 20%.
All this is taking place while number of luxe cars which were imported has increased in recent years which is a sign of increase in class differences and shows that foreign sanctions are not the sole (or most important) reason for misery.

This situation cant last for long. Either workers and toilers rise to overthrow the current system or there will be mass starvation.

[Brutus]

Yes, I hope it is the former

[ВАЛТЕР]

I'm sure if there is a general uprising, it will be called a "Zionist conspiracy" or some other such bullshit by some of the anti-imps, rather than simply a result of capitalism.

[Flying Purple People Eater]

Hashem, would you by any chance be able to link us to the article which said this?

And this is horrid. Simply horrid. I hope the Iranian working-class can get fight against this. A horrifically oppressive regime and US imperialists ready to swoop right the fuck in for 'democracy and control' if there happens to be any major social unrest.

[hashem]

Hashem, would you by any chance be able to link us to the article which said this?

see this article:

http://71.18.109.83/?p=55989

its in Farsi but you can use a translator software to make it understandable.

the last news is government has agreed with a 25% rise instead of 20%. but that doesnt make much difference especially with current rate of inflation. current minimum wage is 4871250 Rials per month while 1 Dollar is equal to 342000 Rials and Rials value is rapidly decreasing.

[Paul Pott]

Clearly the western strategy of starving the people to implode Iran's society is bearing fruit. The theocracy's only strategy left to remain in power has been to keep the ruling class wealthy.

The Iranian working class must reject the noose of the local criminals and the war of the global criminals, and finish what was begun in 1979.

[melvin]

This is horrific. hopefully the Iranian working class will be able to exact revenge. or else this will be an incredible tragedy.

this is so sickening I wish I couldn't believe it, but capitalism is so harsh that I can.

[Cheif45]

I love how from what I'm seeing, you're blaming the Iranian government for this.

[ВАЛТЕР]

I love how from what I'm seeing, you're blaming the Iranian government for this.

We're blaming capitalism for this, which the Iranian government is a product of.

[hashem]

I love how from what I'm seeing, you're blaming the Iranian government for this.

shouldnt it be blaimed? it has increased budgets of military and religious organizations while it throws worker activists who ask for more wages into prison.

[Paul Pott]

What some people forget is that even though the interests of Iran's ruling class align against imperialism and with certain national liberation struggles, Iran is a far-right, ultra-reactionary regime that has the blood of more working class people and communists than zionists on its hands. Above all the "Islamic Republic" has stolen the Iranian revolution.

I don't buy for a second that the "Green" revolution back in '09 wasn't covertly organized by western agents, but this has been the strategy of the west toward Iran - by directly attacking the material conditions of the people, they hope to make as many Iranians as possible rally around their proxy movements. Eventually they want them to be complacent when war comes and Iran is finally occupied, a puppet regime from those movements is put in power, and western aid arrives.

The Iranian strategy since the imposition of sanctions has been to keep any part of the ruling class from supporting a possible rapprochement with imperialism. This has been done entirely at the expense of the working class, who suffer the most from the west's economic warfare to begin with.

The Iranian working class has a tough struggle ahead, no matter what happens.

[Luís Henrique]

Government of Iran has agreed with 20% increase in wages for the new year. This happens when inflation rate is about 100%. This means actual wages have been reduced by 80%.

The math doesn't match.

If the inflation is 100%, wages lose 50% of their value if they are not increased at all. If they are increased by 20%, they are reduced by 40%, not 80. It is a huge loss, but by no means comparable to 80%.


Even governmental sources admit that inflation rate is at least 26%. But if we note that Irans currency (Rial) has lost more than 2/3 of its value during the last 2 years, its clear that governmental sources are not trustworthy. 2 years ago one dollar was equal to 11000 Rials. Today its equal to 34000 Rials.

But the rate of exchange compared to the dollar is not the same as inflation; we would need to see how much the internal prices have risen. True, normally the price of internal commodities and the price of the dollar are somewhat related - but I am far from sure that the Iranian situation qualifies as "normal", given the external sanctions.


This situation cant last for long. Either workers and toilers rise to overthrow the current system or there will be mass starvation.

I don't think there is going to be mass starvation, though evidently the living standards of the working class must be falling. Whether there will be increased political resistance from workers is not exclusively given by their economic losses, but implies considerations on their level of organisation. I certainly hope they are able to put up a good fight, but I am far from sure that anything similar to a socialist revolution is possible as of now.

Luís Henrique

[melvin]

I love how from what I'm seeing, you're blaming the Iranian government for this.The Iranian government is not free from guilt.

[hashem]

If the inflation is 100%, wages lose 50% of their value if they are not increased at all. If they are increased by 20%, they are reduced by 40%, not 80.

its true. but this is the second year (28 months to be exact) which country is experiencing such a high inflation. it started when government removed its subsidies and before new wave of foreign sanctions. in last year increase in wages was lower.
more than two years ago government decided to pay each person 410000 rials (its now 455000) instead of subsidies. back then it was equal to about 38 Dollars but now its equal to 13.3 Dollars.


But the rate of exchange compared to the dollar is not the same as inflation; we would need to see how much the internal prices have risen. True, normally the price of internal commodities and the price of the dollar are somewhat related - but I am far from sure that the Iranian situation qualifies as "normal", given the external sanctions.

internal prices have risen as well. during 28 months price of common goods has tripled. some goods are more expensive than Europe.


I don't think there is going to be mass starvation, though evidently the living standards of the working class must be falling. Whether there will be increased political resistance from workers is not exclusively given by their economic losses, but implies considerations on their level of organisation. I certainly hope they are able to put up a good fight, but I am far from sure that anything similar to a socialist revolution is possible as of now.

there wont be mass starvation very soon. but this situation cant last forever. shortage of different goods has been avoided at a high price: government uses money from oil exportation in order to import huge amounts of ordinary goods from countries like China and India and sells them inside the country. this leads to destruction of national industry and agriculture. oil industries use outdated technology and neighbours of Iran (Iraq, Qatar and Turkmenistan) are rapidly draining off anything they can from common oil and gas fields while Irans oil production is lower than 1979 despite its population has been doubled. what if Iran losses its ability to produce oil or oil exportation stops because of sanctions or war?

even at present moment money from oil is not enough for 70 million people. some of it is wasted by governmental corruption or military and ideological plans and rest of it is practically offered to Chinese, Indian or ... capitalists, which is practically a subsidy for foreign products.

[Geiseric]

I wouldn't be surprised if the U.S. is fracking at all from the border with Afghanistan. Still people in Iran have mobilized in a huge way for the past few years, I hope they organize a fightback and a secular working class party to lead in their intensifying struggle.

[Flying Purple People Eater]

I love how from what I'm seeing, you're blaming the Iranian government for this.

What are you implying? That it isn't?

[Devrim]

The math doesn't match.

Yes, I noticed this as soon as I looked at it, but I didn't want to seem like a pedant.;)


its true. but this is the second year (28 months to be exact) which country is experiencing such a high inflation. it started when government removed its subsidies and before new wave of foreign sanctions. in last year increase in wages was lower.
more than two years ago government decided to pay each person 410000 rials (its now 455000) instead of subsidies. back then it was equal to about 38 Dollars but now its equal to 13.3 Dollars.

It is difficult to work out what the actual increases in living costs are. If I was trying to calculate dollar inflation though I would start from the black market rate, and not the official one.

What the actual decrease in living standards are is really difficult to measure. Official inflation figures are not totally accurate, even when they are not based on blatant lies.

Another point is the increase that you mention is to the minimum wage. It doesn't say how workers in better jobs are doing. Are pay increases at all managing to keep up with inflation.

I am probably one of the few people on here who have lived through periods of high inflation (I would imagine Luis is another). It is not always how it seems. If I remember correctly 2001 was the worst year in Turkey, but I got five pay rises that year. After a couple of months the money we were earning was worth very little. The first pay day after the pay rise was pretty good though.

Possibly the period where the working class in Turkey suffered most from inflation was not the point when it was highest, but the period when the government was bringing it under control.

Devrim

[hashem]

the increase that you mention is to the minimum wage. It doesn't say how workers in better jobs are doing.

increase in wages for workers who are receiving more than minimum is lower, although there is no trustworthy statistic but their wages are getting closer to minimum. reasons: high unemployment, destruction of industry and agriculture, lack of worker organizations and brutal suppression of worker activists, oppressive labour laws.

meanwhile, there are workers who earn less than minimum wage. according to Irans labour laws, workers of workshops which employ less than 10 people and all of workers in carpet industry are not subjects of labour laws and may be employed with less than minimum wage.

also note that the amount money which people are receiving instead of subsidies, hasnt changed much during more than 2 years. it has lost its value and its not even enough for paying electricity, gas and water bills.

[Ocean Seal]

Government of Iran has agreed with 20% increase in wages for the new year. This happens when inflation rate is about 100%. This means actual wages have been reduced by 80%.

Minimum wage is 140$ per month but since Irans currency is losing its value, it would be 70$ by end of the year if inflation rate stays as it is.

Even governmental sources admit that inflation rate is at least 26%. But if we note that Irans currency (Rial) has lost more than 2/3 of its value during the last 2 years, its clear that governmental sources are not trustworthy. 2 years ago one dollar was equal to 11000 Rials. Today its equal to 34000 Rials. Since most of the goods are imported from abroad and governmental subsidies have been removed, its clear that government is lying. Even price of governmental services like insurance were increased more than 20%.
All this is taking place while number of luxe cars which were imported has increased in recent years which is a sign of increase in class differences and shows that foreign sanctions are not the sole (or most important) reason for misery.

This situation cant last for long. Either workers and toilers rise to overthrow the current system or there will be mass starvation.
The initial math is wrong. Wages will not be reduced by 80%. If wages are increased by 20% with 100% inflation, they will be at 60% of their original worth. However, this is still a very noteworthy drop.

[Luís Henrique]

I am probably one of the few people on here who have lived through periods of high inflation (I would imagine Luis is another).

Yup. Up to 80% inflation per month.


It is not always how it seems. If I remember correctly 2001 was the worst year in Turkey, but I got five pay rises that year.I am not sure 1985 was the "worst" year in Brazil, considering the official inflation percents. But it was the worst for me, because I only had anual pay rises. My wage was completely destroyed as of March; there was some relief when the minimum wage was raised in May, and again in November, though in the quite humiliating form of a complement to meet the minimum - and by no means compensating the impact of inflation. So to me 1985 was the worst year; I would have not survived if not for family help. In 1987-1994 the inflation rates were probably worse, but then I already had monthly raises (and from 1990 on, also a well-paid job), so the impact on my life standards was not as brutal.


After a couple of months the money we were earning was worth very little. The first pay day after the pay rise was pretty good though.I don't remember such thing as pretty good - rather it was a mad time of buying everything I could, in the expectation to live as long as possible on hoarding necessaries.


Possibly the period where the working class in Turkey suffered most from inflation was not the point when it was highest, but the period when the government was bringing it under control.That's quite possible, though in Brazil the best time for us was 1986, when the government brought inflation down by freezing prices. It was a wonder how our money had actual value... then 1987 brought reality back, and the cycle restarted.

My experience is that we suffer more when the government tries to bring inflation down from 10% a year to 5%, than when it tries to bring it down from 1,000% a year to 10%.

Luís Henrique

[Luís Henrique]

There is also a difference between inflation as it hits the poor and as it hits the rich. If the price of bread rises, it hits the poor badly; if the price of caviar rises, not so much.

Luís Henrique

[hashem]

The initial math is wrong. Wages will not be reduced by 80%. If wages are increased by 20% with 100% inflation, they will be at 60% of their original worth. However, this is still a very noteworthy drop.


I wrote about 20% raise in wages at first and my title is based on that, but Irans government agreed with a 25% raise later. Imagine a worker who was receiving 6000000 Rials (545 Dollars, which was a good salary) when the government changed its policy about subsidies. Last year wages were increased 18% and this year 25% while back then 1 dollar was equal to 11000 Rials and now its 34500 Rials. That worker is now earning 8850000 Rials (if we imagine that his wage has been increased proportionate to the raise in minimum wages, which practically isn’t true because higher wages are getting closer to minimum). His wage is equal to 257 dollars at beginning of this year (Iranian new year begins in spring) and would be equal to 167 dollars by end of this year if presume that exchange rate would be 1 : 53000 by then, While its possible and more probable that Rials value drops quicker than previous years.

Thus salary of that worker will decrease from 545$ to 167$. Its means about 70% decrease even if we presume best conditions.

[Prof. Oblivion]

There is also a difference between inflation as it hits the poor and as it hits the rich. If the price of bread rises, it hits the poor badly; if the price of caviar rises, not so much.

Luís Henrique

Inflation is a rise in the price level, not just a rise in the price of specific goods.

[Luís Henrique]

Inflation is a rise in the price level, not just a rise in the price of specific goods.

Being very technical, inflation is the coining of more money than what the economy actually needs, which leads to the devalution of money, and consequently to the rise of prices.

In practice, different prices never rise at the same rate (unless perhaps in hyperinflationary situations, when economic agents use the official levels of price rising as a benchmark to rise their own prices). When the price commodities that compose the traditional consumer basket of the working classes rise more than the average of all prices, then the working class is disproportionately hit by inflation. It doesn't mean that workers have a different "inflation", but that inflation hits the working class not as an abstraction, but as rise of prices of products that workers are used to buying.

Luís Henrique

[Prof. Oblivion]

True, though I guess I was just arguing semantics. That's the academic in me. :)