Workers’ cost of living has come under pressure from inflation and low wages. July inflation data point to intensifying financial pressure on working-class households. Prices of essential goods have risen rapidly. Among these, food has placed the greatest strain on household budgets. Housing, healthcare, and education have also become more difficult to afford for many wage-earning families.
According to official data from the Statistical Center of Iran, the Iranian regime’s official statistics agency, point-to-point food inflation reached 128.1% in July. This means the price of the specified food basket has become 2.8 times higher than it was in July last year. The prices of at least eight food items have increased by more than 100% over the past year. These figures reflect only average price increases. The food basket used in the official calculations is itself very limited and minimal.
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The cost of living basket and the deep gap between income and expenses
Working-class households are mainly concentrated in the fourth and fifth income deciles. According to the calculations presented, food accounts for 38.05% of living expenses in these deciles. Faramarz Tofighi, a labor activist, calculated the cost of the food basket for an average 3.3-person family based on official data. He also used the Nutrition Institute’s food basket in his calculations. According to these estimates, the cost of a working-class household’s living basket reached about 900 million rials (approximately $479) in July. This amount creates an enormous gap with workers’ monthly income. Meanwhile, a worker’s minimum monthly income is about $133. This figure represents the total official earnings of a worker with one child and one year of work experience.
The cost of living basket set by Iran’s regime’s Supreme Labor Council in February last year stood at 429 million rials. Within four months, it had risen to about 900 million rials. As a result, the cost of living basket increased by 211.14% during this period. The increase in living costs amounted to about 476 million rials. This surge occurred within just four months.
Inflation is outpacing wages
According to calculations presented by Faramarz Tofighi, the monthly wage of a married worker with one child and one year of work experience, including all benefits, amounts to 249 million rials. At the beginning of the year, this wage covered only 58.24% of the cost of the living basket. At that time, the worker’s monthly income was enough to cover about 17.47 days of minimum living expenses. However, by the end of July, the situation had changed noticeably.
The wage’s purchasing power has fallen to 27.58%. This income now covers only 8.27 days of living expenses.
Food has become a class-divided commodity
Meat, chicken, eggs, legumes, and rice are among the staple foods that are gradually disappearing from people’s living baskets, especially those of workers. Bread, which has always been a basic food for low-income households, has also not been spared from inflationary pressure.
For households with fixed incomes, rising prices for these goods mean the gradual elimination of essential items. Declining food quality is also one consequence of this situation. This issue is particularly significant for retirees. A large portion of retirees live on fixed incomes and have no way to offset inflation through higher earnings.
The cost of living basket: A gap that widens every month
A comparison of income and expenses shows that the gap between wages and the cost of living basket has deepened in a short period. At the beginning of the year, on March 22, a wage of 249 million rials (about $133 at the current exchange rate) could cover 58.24% of minimum living expenses. Four months later, that coverage had dropped to 27.58%.
At the same time, the cost of the living basket has risen from 429 million rials to about 900 million rials. The gap between income and expenses has not only grown but has expanded at a significant pace. The calculations indicate that workers need an income close to 900 million rials to maintain a minimum standard of living. Yet the wages of a large share of workers do not even reach half of that amount.
Under such conditions, a slight decline in inflation alone cannot compensate for the pressure imposed on wage-earning households. Lower inflation does not mean lower prices. It only means that prices are rising more slowly.
When a monthly wage is enough to cover only 8.27 days of minimum living expenses, the issue goes beyond ordinary economic pressure. These figures point to a severe erosion of workers’ purchasing power and worsening economic inequality in Iran.
