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7 Facts About Poverty in Iran
In recent years, absolute poverty in Iran has risen drastically. Action is necessary in order to provide basic needs and prevent more Iranians from falling under the poverty line. Here are seven facts about poverty in Iran.

7 Facts About Poverty in Iran

  1. Economic Downshift: According to the Iranian Parliament’s Research Center, between 23 to 40 percent of Iran’s population will be living in absolute poverty soon. This is due to an increase in unemployment, inflation and a downward trend in economic growth. The Research Center’s report shows that the inflation rate has risen to 47 percent from 2018 to 2019 and estimates that 57 million more Iranians will fall into poverty over 2020.
  2. Support Packages: The Iranian Parliament’s research center recommends that the government send support packages to the Iranians suffering under the worst conditions in order to supply them with basic needs. The government would provide support packages four times a year. It would also include cash cards that people can use only for food items.
  3. Crossing into Poverty: For a family of four living in Tehran, the poverty line rose to a monthly income of 27 million rials or $650 per month. Now, anyone living with a monthly income of $650 per month and under is considered to be living in poverty. The Research Center’s report shows a 22 percent increase in people living in poverty since 2017. The increase means that Tehrani families of four that were not under the poverty line in 2017, now are.
  4. Organizations that Help: The Imam Khomeini Relief Foundation is an Iranian organization that provides support to families living in poverty. The government and private donors support the foundation. The Imam Khomeini Relief Foundation invested almost $155 million in solar plants to assist families living in poverty.
  5. The Weakened Rial: In May 2019, President Hassan Rouhani announced his decision to partially withdraw from the 2015 nuclear agreement. Shortly after, the rial decreased by 3,500 points. In 15 months, the rial went from 40,000 to 156,500 to the dollar.
  6. Sanctions and Corruption: Iran’s banking and oil sectors are its backbone, but U.S. sanctions have greatly affected these sectors, causing an economic crisis in Iran. Many Iranian’s have fallen victim to panic-buying due to fear of price increases. Internal corruption has led to an occasional scarcity of goods due to merchants and entrepreneurs hoarding goods to increase prices.
  7.  Plan B: To generate income, Iranian officials say that they are ramping up non-oil goods. They have also built up a network of traders, money collectors and exchange companies in other countries to get around banking and financial sanctions. If sanctions remain, they plan to export other goods to prevent further economic despair.

In Iran, 26 million people are living in absolute poverty. However, with more support from the Iranian government and better relations with the U.S., Iran’s increase in poverty can come to a halt.

Lisa Di Nuzzo
Photo: Flickr

Causes of Poverty in Iran
Poverty in Iran? Big yes. Iran’s economy grew at an accelerated pace of 9.2 percent at the close of the Iranian fiscal year, an auspicious preview to the “economic revolution” promised by President Hassan Rouhani in his inauguration earlier this year. However, developments from the economic sector did little to create jobs for Iranians and failed to translate to any significant impact in addressing poverty in Iran. Over 70 percent of Iranians still live in poor conditions, while 30 percent were classified as absolute poor at the end of 2016.

Unemployment due to the lack of available jobs is still a grave concern among citizens, as the government is still unable to improve from the annual job creation rate of 600,000. This dismal number presents an even graver issue to be addressed: with over a million students graduating from college every year, most of these young Iranians are not able to find work and a source of income. One out of four young Iranians are unemployed, and most of them end up falling into the 61 percent of the population who are neither employed nor looking for employment.

Even graduating with a higher degree (for example a master’s degree or a Ph.D.) does not guarantee anybody a job upon graduation. Many of these people have struggled to find jobs that are in line with their specializations and often opt for blue-collar jobs with meager salaries just to put food on the table. Mehdi Ebrahimi, an Iranian man who received a master’s degree from Tehran’s Payame Noor University, has chosen to carry heavy loads in border areas to be able to earn income and fend for his family, instead of embarking on a painstaking search for work in line with his degree.

 

What Causes Poverty in Iran

 

Hardship does not end with securing a job, however, since 90 percent of the labor force lives below the poverty line. Disgruntled workers argue that the minimum wage income of 8,112,000 Iranian rials (roughly $246) is barely enough to cover basic necessities. For a family of four, surviving requires roughly twice the amount.

“Many workers cannot even afford the basic products they need for survival. Many of these items are now considered luxuries,” said Rahmatollah Poormoussa, head of Iran’s state labor organization.

To put the wage disadvantage that these workers have in contrast to their international counterparts, the Iranian minimum hourly wage of roughly $1 is a tenth of the average minimum wage in Western countries and only a third of the wage taken home by workers in Turkey. China, notorious for paying workers the lowest minimum wage, pays about 1.2 times more than their Iranian counterparts.

Contractual employment is also a challenge for these workers. For irregular laborers, contractual work often means an unstable and unreliable flow of income. Most of these workers are not paid until weeks after they are due their wage, and most of the time their wage does not come before their stock of basic necessities is depleted. It is no surprise that 95 percent of contractual workers fall under the poverty line.

Subsequently, they and their dependents suffer from the insecurity of not knowing when breadwinners will be able to take their wages and buy food and other needs. Contractual workers and their families comprise a large amount of the 70 percent of Iranians who reported to be food insecure.

The difficulty of creating jobs may likely be a result of long political turmoil, caused by national and international conflicts, as well as the previous closure of industrial and manufacturing units. Economic conditions have become slightly better after sanctions against the country were lifted, but it has still not been enough to promote the well-being of citizens and alleviate conditions for the poor.

Critics of the Rouhani’s administration have also cited the regime’s pouring of funds into foreign conflicts and military spending rather than on infrastructural and social welfare projects as a reason for the ineffectiveness of government to address poverty in Iran. If Rouhani’s government really wants to jumpstart the “economic revolution” he has promised his people, they say, he must begin to see infrastructural and welfare projects as a top priority for his administration.

Investing in these projects will be a good starting point in fixing the market, improving the quality of lives of workers and subsequently address the growing problem of poverty in Iran.

Bella Suansing

Photo: Flickr