Unemployment and inflation in a war for which the Iranian regime is the primary cause are no longer merely economic phenomena but have turned into a political-structural crisis. The escalation of military tensions, disruptions in trade routes, and destruction of infrastructure have pushed Iran’s economy into a phase where the usual rules of the labor market have effectively broken down. In these conditions, prices are formed not based on supply and demand, but on uncertainty, war costs, and political instability.
A Tsunami of Unemployment and the Collapse of Job Security
Unemployment and inflation in this war of attrition have manifested most clearly in the labor market. An estimated loss of more than one million direct jobs is only the visible part of this crisis. If indirect unemployment in supply chains and services is added, it amounts to a real tsunami that has fundamentally destabilized the structure of employment.
The Naval Blockade And the Structural Fracture of Iran’s Economy
This wave of unemployment is not a direct result of the war, but rather the product of accumulated inefficiencies in the economic structure under the control of Iran’s ruling establishment. The war has merely acted as a catalyst, exposing pre-existing weaknesses.
Production units, which should serve as engines of employment, have rapidly moved toward reducing their workforce. Reports of declining factory capacity and the shutdown of production lines indicate that workers are the first victims of this situation.
At the same time, the rise in registrations for unemployment insurance is a clear sign of the deepening crisis. The sudden increase in applicants has not only put pressure on insurance funds but also shows that the economy is no longer capable of absorbing labor.
Structural Inflation and the Collapse of Purchasing Power
Alongside unemployment, inflation in a war with an uncertain future has simultaneously destroyed household livelihoods. In these conditions, inflation is not merely the result of increased liquidity, but rather the product of a complex combination of war-related factors, disruptions in imports, and rising transaction costs.
The increase in prices of imported goods, even beyond exchange rate changes, shows that inflation expectations have risen sharply. Economic actors set prices based on the most pessimistic scenarios. This causes inflation to become a self-reinforcing phenomenon.
Meanwhile, disruptions in infrastructure and supply chains play a decisive role. Iran’s economy is heavily dependent on maritime trade, and any disruption in these routes directly affects commodity prices. Increased costs of transportation, insurance, and financing are passed on to final goods prices, placing additional pressure on consumers.
As a result, workers’ purchasing power has sharply declined. Wages, even when nominally increased, cannot keep pace with inflation. The gap between income and living costs has reached a point where a large portion of the workforce is effectively below the poverty line.
War Economy and the Intensification of Stagflation
Unemployment and inflation in this war have ultimately manifested in the classic form of stagflation. On one hand, declining production and investment have pushed economic growth into negative territory, while on the other, high inflation continues. This combination is one of the most destructive economic conditions.
Within this framework, the behavior of economic actors has also changed. Capital, instead of moving toward production, flows into safe assets or unproductive activities. Even producers allocate their resources to purchasing raw materials or hoarding them to profit from rising prices or avoid losses.
This behavioral shift indicates a loss of confidence in the economic future. When economic actors focus on preserving asset value instead of expanding production, it means the economic structure has lost its functionality.
At the same time, rising production costs, stemming from wages, energy, and raw materials—have placed additional pressure on businesses. Many units are unable to continue operating and are forced to shut down or reduce capacity. This trend creates a new wave of unemployment and intensifies the crisis.
Ultimately, unemployment and inflation in wartime present a clear picture of economic deadlock. An economy in which war, structural corruption, and political inefficiency operate simultaneously cannot create a sustainable path for growth and employment.
This situation is not a temporary crisis, but the logical outcome of a structure formed on the basis of concentrated power, lack of transparency, and economic repression. As long as this structure remains in place, any external shock, including war, can push the economy closer to collapse.
