Iran - Working conditions

The highly fluid nature of Iran's labor market and the large size of the informal services sector make accurate estimates of employment levels difficult. A census, conducted in 1991, recorded 25.2 percent of the 57.8 million population as economically active, and 22.3 percent as in employment, suggesting that around 11 percent of the workforce was unemployed. However, the census ignored the fact that most Iranian adults must hold 2 or even 3 jobs in order to provide for the rest of their family. The government put unemployment at 2 million in 1997-98, equivalent to 12.1 percent of the workforce and up sharply from the previous year's estimate of 9.1 percent. Given the rapid population growth experienced over the past 20 years, together with a real reduction of government resources aimed at job creation, it is likely that even this estimate is too conservative. According to the Economist Intelligence Unit (EIU), an accurate estimate for unemployment figures lies between 14 percent and 18 percent, while the IMF suggests it may be as high as 25 percent.

High inflation has been another characteristic of the Iranian economy since the early 1970s and played a crucial role in the industrial action that presaged the 1979 revolution. In recent years changes in the exchange rate, the gradual removal of subsidies, and the suppression of imports have all contributed to rising prices and eroded real wages . Some evidence indicates that inflation has dropped steadily since 1995, settling in a range of 22-30 percent, according to sources from the International Monetary Fund (IMF).

The Labor Code empowers the Supreme Labor Council to establish annual minimum wage levels for each sector and region. The minimum wage has been inadequate for some years by the government's own admission. Officially the minimum wage should be sufficient to meet the living expenses of a family and should take inflation into account. The daily minimum wage was raised in March 1997 to US$2.80 (8,500 rials). This wage apparently is not sufficient to provide a decent standard of living for a worker and family. Information on the percentage of the working population covered by minimum wage legislation is not available. Private-sector personnel in contrast are better off.

Formally, workers are granted the right to establish unions; however, the government does not allow independent unions to exist. A national organization known as the Worker's House, founded in 1982, is the sole authorized national labor organization. The leadership of the Worker's House coordinates activities with Islamic labor councils, which are made up of representatives of the workers and 1 representative of management in industrial, agricultural, and service organizations of more than 35 employees. These councils also function as instruments of government control, although they frequently have been able to block layoffs and dismissals. In 1993, the parliament passed a law that prohibits strikes by government workers. Nevertheless, strikes occur, apparently in increasing numbers. Reports over the last 2 years included strikes and protests by oil, textile, electrical manufacturing, and metal workers, and by the unemployed.

One unforeseen result of the revolutionary government's drive for gender segregation has been the improvement in women's education. As men and woman are expected to work separately, the demand for female professionals has risen markedly, boosting the number of female graduates. The war effort contributed to this process, as women took the places of men required for military service. In 2000, there were more women enrolled in universities than men. In tertiary education, vocational subjects such as computer studies and engineering are becoming increasingly popular, while the quality of language tuition is improving. These trends will undoubtedly improve the qualifications of the local population from the point of view of foreign investors, but they also present the government with higher demands for skilled job-creation and increase the pressure to cut bureaucratic and ideological obstacles to a free labor market.