Labor activists in Iran have warned about rising unemployment, bankruptcies of production units, and the expansion of informal jobs as the energy crisis deepens. At the same time, the growth of informal work and inflationary pressures on workers’ livelihoods have further darkened the outlook of the labor market.
The state-run newspaper Jahan Sanat, on Monday, August 25, in a report warning about the consequences of the energy crisis on employment in Iran, wrote that electricity shortages and repeated blackouts in factories have “shut down the engine of the economy” and pose a serious threat to jobs and production.
The report emphasized that the energy shortage crisis not only destroys the labor market but also, by reducing investment, severely threatens future employment and exposes society to dangerous social consequences.
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In recent weeks, following repeated power outages in various Iranian cities, several citizens reported on social media that the blackouts disrupted their businesses and economic activities.
Industrial blackouts and the threat to workers’ jobs
Power outages have hit energy-intensive industries such as steel, cement, aluminum, petrochemicals, and automotive, causing production line shutdowns, reduced efficiency, and higher costs, and in some cases, leading to factory closures and workers losing their jobs.
The Real Price of Electricity for Industries in Iran Has Increased Up To 30 Times https://t.co/xgjfYETBJk pic.twitter.com/VafKBD4Lik
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According to Jahan Sanat, the blackouts have increased industries’ reliance on diesel generators, leading to “higher commodity prices, reduced demand, and ultimately lower production and workforce downsizing.”
Hamid Hajesmaeili, a labor market expert, told this newspaper that blackouts caused by the energy crisis have severely pressured businesses and industrial units, resulting in a 40% reduction in production capacity.
On August 5, industry activists also warned that with widespread blackouts imposed since May, steel production is expected to decline by 33% this year.
Warnings from experts and labor activists about a wave of unemployment
Tasnim News Agency, affiliated with the IRGC, also wrote in a report that repeated power outages and the ongoing energy crisis in recent months have created serious problems for both large industries and small- and medium-sized workshops, warning that the unemployment rate may rise in the coming months.
Tasnim noted that many workshops, due to repeated power cuts, have been forced to reduce working hours or shut down part of their production lines, warning that continued energy outages will directly affect unemployment rates.
At the same time, Fathollah Bayat, head of the Union of Contractual and Temporary Workers, warned that with ongoing power outages in Iran, many factories and companies will be forced to lay off workers and downsize.
Meanwhile, Mohammadreza Tajik, a member of the Supreme Labor Council, pointed to high inflation and the sharp rise in living costs, saying that the minimum wage of workers must be revised for the second half of the year.
Malek Hosseini, deputy labor minister in the government of regime president Masoud Pezeshkian, also stated that 57% of Iran’s labor market is in the hands of informal jobs, with workers in these sectors mostly lacking insurance coverage.
