Iranian Workers Face Economic Catastrophe as War Compounds Decade-Long Crisis
Wages plummet 400% over ten years while unemployment surges above 70% amid military conflict and international sanctions.
Iranian workers are experiencing their worst economic crisis in modern history, with wages dropping by more than 400% over the past decade while unemployment has surged above 70% during the recent military conflict with Israel. The economic devastation has left millions of Iranian families unable to afford necessities, as the minimum wage of approximately $94 covers less than a quarter of monthly living expenses that exceed $400.
The crisis has intensified dramatically following the 12-day military conflict with Israel that concluded this week, with ordinary Iranians bearing unprecedented economic pain as their government prioritizes military spending over citizen welfare. More than 15.5 million insured workers, around 3 million retirees, and millions of uninsured workers now struggle to survive in an economy where expenses far outstrip earnings.
The combination of international sanctions, government mismanagement, rampant inflation exceeding 40%, and military expenditures has created what economists describe as the deepest and longest economic crisis in Iran's modern history.
The Staggering Scale of Wage Collapse
The magnitude of Iran's wage crisis becomes clear when examining the dramatic decline in purchasing power over the past decade. According to Iran's state-run Mardom Salari newspaper, which ran the shocking headline "The 400% Drop in Wages Over a Decade" on January 29, 2025, the standard of living for workers has declined fourfold.
A decade ago, the minimum wage for workers was around 6 million rials, equivalent to approximately $235 at the time. Today, the minimum wage amounts to just $94 when adjusted for the current exchange rate. This represents a catastrophic erosion of purchasing power that has accelerated rapidly in recent months.
The decline in wages is accelerating at an alarming pace.
At the beginning of 2025, the minimum wage was equivalent to $133, meaning that in just 10 months, workers' purchasing power dropped by 30%. This rapid deterioration reflects the compound effect of currency devaluation, inflation, and economic mismanagement.
According to Business & Human Rights Resource Centre, an Iranian government agency reported that "with less than 50 days remaining until the end of the Persian year 1403, the real value of wages has fallen to $86". This marks a stark contrast to March of the previous year, when, despite nominal wage growth of over 35%, the real value stood at $119.
Unemployment Crisis Reaches Critical Levels
Iran's unemployment situation has reached crisis proportions, with different sources reporting varying but consistently alarming figures. According to Iran International, unemployment has surged above 70% as the economic crisis deepens. The Iranian regime's Statistical Center reported that by the end of winter 2025, the unemployment rate among individuals aged 15 and older reached 7.8%, reflecting a 0.6% increase compared to the previous season.
However, critics argue that due to flaws in the data collection methodology, the actual unemployment rate is significantly higher than the figures published by regime-affiliated data centers. The International Monetary Fund projects Iran's unemployment rate for 2025 at 9.5%, up from 7.8% in 2024.
Gender disparities in unemployment are particularly stark. Among men, unemployment increased from 5.9% in autumn 2024 to 6.5% in winter 2025, while among women, it rose from 13.7% to 14.2%. The unemployment crisis affects both urban and rural areas, with urban regions seeing rates rise from 7.8% to 8%, while rural areas experienced an increase from 5.2% to 6.9%.
According to the National Council of Resistance of Iran, the Majlis reported that 50% of males aged 25 to 40 are unemployed and not seeking employment. This represents a massive waste of human capital and indicates the severity of economic desperation among Iran's working-age population.
Living Costs Spiral Beyond Workers' Reach
The gap between wages and living costs has reached unprecedented levels, creating a humanitarian crisis for millions of Iranian families. In 2025, the Iranian government raised the minimum wage to 10 million tomans—roughly $118 USD at the current open-market exchange rate of 850,000 IRR/USD. However, official figures show that the minimum cost of living for a family is at least 35 million tomans ($412 USD), leaving a 72% gap between wages and basic expenses.
This represents a wage that runs out halfway through the month, forcing millions of workers into second and third jobs, debt, and deprivation. Mohammad Reza Tajik, the head of the Workers' Assembly of Tehran Province, emphasized that "the wages of workers are always one year behind inflation," adding that even a 100% wage hike would fail to bridge the gap between wages and living expenses for the working class.
According to Iran International, Mohsen Baghaei, a workers' representative on the Supreme Labor Council, warned of significant price hikes in essential goods over the past two months, with cooking oil increasing by 40%, rice by nearly 100%, and other staples like potatoes and onions also rising steeply. Baghaei estimated that the average cost-of-living basket for workers has risen by over 30% in just two months, pushing the basket's value from 300 million rials (around $325) to 380 million rials ($413).
Food Security Crisis and Malnutrition
The economic crisis has translated into a severe food security crisis affecting the majority of Iran's population. According to state-run newspapers, 60% of the population is unable to meet the minimum daily requirement of 2,500 calories for survival. The Ministry of Social Welfare announced in 2024 that 57% of Iranians are experiencing some level of malnourishment.
The deterioration in food consumption patterns reveals the depth of the crisis. According to Etemad newspaper on December 12, 2024, since 2011, per capita consumption of fruit has dropped by 50-60%, dairy by 80%, and meat by 60%. This represents a fundamental shift in Iranian dietary patterns, with families forced to eliminate essential food groups from their daily meals.
The situation has reached a point where it is "no longer just about shrinking dinner tables; people's tables have become void of meat, dairy, cooking oil, and other basic necessities, leaving the majority exhausted," according to Eurasia Review. This level of food insecurity in a country with Iran's natural resources represents a profound failure of economic management.
War's Impact on Economic Devastation
The recent 12-day military conflict with Israel has compounded Iran's existing economic problems, creating additional burdens on an already struggling population. According to The National News, "the impact of the continuing war on Iran's economy will be devastating, particularly because the economy has lost its resilience after 14 years of sanctions".
Mahdi Ghodsi, an economist at The Vienna Institute for International Economic Studies, noted that residents have begun leaving cities such as Tehran, Tabriz, and Isfahan, indicating that economic activity and employment have been "severely paralysed across sectors". The war has placed an additional burden on Iran's foreign trade, which was already strained by sanctions.
The government's prioritization of military spending over citizen welfare has become increasingly apparent. According to Iran International, "the Iranian government has continued to prioritize funding the Islamic Revolutionary Guard Corps (IRGC) and military ventures over investing in the well-being of its citizens". Mohamad Machine Chian, a senior researcher at the Centre of Governance and Markets at Pittsburgh University, described the situation as "a real tragedy," noting that "their quality of life has been steadily dropping for the past couple of years. But especially the past year, it has been a disaster".
Currency Collapse and Inflation Spiral
Iran's currency crisis has accelerated dramatically, with the Iranian rial becoming the world's least valuable currency. Since President Masoud Pezeshkian took office, the Iranian currency has halved in value. The purchasing power of Iranians is further undermined by the rising value of the US dollar in Tehran, which stands at 600,000 rials, with prospects of further depreciation looming.
The sharp depreciation has driven inflation above 40 percent, with food prices soaring by as much as 100 percent in some cases. According to Iran International, inflation began to soar to 40% in 2019 after the United States imposed economic sanctions on Iran. The cumulative effect of five years of high inflation has impoverished tens of millions of Iranian wage earners.
Persistent inflation and a sluggish economy have propelled millions of Iranians into the category of "working poor," with reports indicating that wages cover only 60 percent of monthly household expenses. This has created a situation where even employed individuals cannot afford necessities, thereby fundamentally undermining the social contract between the government and its citizens.
Government Response and Policy Failures
The Iranian government's response to the economic crisis has been widely criticized as inadequate and misdirected. According to Iran News Update, while the government announced a 45% minimum wage increase for 2025, with salaries for other Labor categories seeing a 32% rise, officials claim that this outpaces the 35% inflation rate recorded in November 2024. However, Labor activists argue that government-reported inflation figures do not reflect the economic reality for ordinary citizens.
Wage negotiations remain stagnant despite the crisis. According to Iran International, the Supreme Labor Council, which is responsible for setting the minimum wage for the new year starting in March, has only convened once since the start of the President Masoud Pezeshkian administration in July, with no meeting held in February. Workers' representatives complain that "while workers expect wages to reflect the cost-of-living basket, the Ministry of Labor's resistance to this principle has stalled progress".
Former MP Esmail Gerami-Moghaddam emphasized the severity of the situation, stating that even if salaries were quintupled, they would still be insufficient to bring Iranian workers above the global poverty threshold. This assessment highlights the fundamental structural problems in Iran's economy that cannot be addressed through simple wage adjustments.
International Sanctions and Economic Isolation
The economic crisis has been significantly exacerbated by international sanctions, particularly those reimposed under President Donald Trump's "maximum pressure" campaign. According to Deutsche Welle, in February 2025, Trump signed a National Security Presidential Memorandum to restore "maximum pressure on the government of the Islamic Republic of Iran," to persuade Tehran to renegotiate a nuclear deal by imposing tougher sanctions and increasing economic pressure.
The US particularly wants to choke Iran's oil exports, which comprise the primary source of state revenue. Tehran is trying to prepare by cutting energy subsidies, but Iranian business journalist Mahtab Gholizadeh warned that this is unlikely to defuse the situation. She noted that "in the budget for the new Persian year (which began on March 21, 2025), the government estimated that the daily oil export target would be 2 million barrels. That will probably not be achieved with Trump".
The budget deficit is likely to grow, and "the abolition of subsidies could mean that the country faces a severe wave of inflation," according to Gholizadeh. This creates a vicious cycle where economic pressure leads to policy changes that further harm ordinary citizens while failing to address the underlying political issues driving the sanctions.
Social Impact and Human Consequences
The economic crisis has created profound social consequences that extend far beyond simple financial hardship. According to the National Council of Resistance of Iran, over one-third of the Iranian population lives in "absolute poverty". The poverty rate has reached about 35%, meaning that more than one-third of Iranians are below the poverty line.
The impact on families is devastating. With more than 15.5 million insured workers, around 3 million retirees, and millions of uninsured workers struggling to meet basic living standards, an estimated 30-40 million people in Iran are affected by the economic crisis. This represents nearly half of Iran's total population living in financial distress.
The crisis has particularly affected women, who face additional structural disadvantages and discriminatory factors, including stricter recruitment criteria, a lack of opportunities for advancement, and lower pay for the same work. The unemployment rate among women (14.2%) is more than double that of men (6.5%), reflecting both economic and social barriers.
Worker Safety and Labor Conditions
The economic crisis has coincided with deteriorating workplace safety conditions, creating additional hardships for Iranian workers. According to the National Council of Resistance of Iran, at least 2,079 workers lost their lives in Iran over the past year—an average of nearly six deaths every day. Alongside the fatalities, 16,273 workplace injuries were recorded from May 2024 to April 2025.
These statistics reveal the human cost of economic desperation, as workers are compelled to accept hazardous conditions due to a lack of viable alternatives. The combination of low wages, poor safety standards, and limited Labor protections creates a situation that Labor activists describe as approaching "modern slavery".
Jafar Azimzadeh, head of the Free Workers Union of Iran, condemned employer representatives' remarks about wage expectations, accusing them of "whitewashing the slavery system". He asserted that for 47 years, an "inhumane system" has systematically violated workers' rights.
Regional and Global Context
Iran's economic crisis occurs within a broader context of regional instability and global economic pressures. The recent military conflict with Israel has highlighted how geopolitical tensions can exacerbate existing economic vulnerabilities. According to Context Corner, Trump's first 100 days in office have been marked by escalating trade wars and economic pressure campaigns that have affected multiple countries, including Iran.
The interconnected nature of modern economies means that Iran's crisis has implications beyond its borders. The country's economic isolation affects regional trade patterns, energy markets, and migration flows. The crisis also demonstrates how economic warfare through sanctions can create humanitarian consequences for civilian populations while potentially strengthening authoritarian control.
The comparison with other countries facing economic challenges reveals the particular severity of Iran's situation. While many nations have experienced inflation and economic difficulties, the combination of sanctions, mismanagement, and military spending has created a uniquely devastating scenario for Iranian workers.
Future Outlook and Potential Scenarios
The outlook for Iranian workers remains bleak, with multiple factors suggesting continued deterioration in economic conditions. According to Iran International, President Pezeshkian has missed numerous opportunities to address the deepening crisis and has failed to include a welfare plan in the budget to alleviate the suffering of citizens.
The structural nature of Iran's economic problems suggests that quick fixes are unlikely to be effective. The combination of international sanctions, domestic mismanagement, military spending priorities, and currency instability creates a complex web of challenges that cannot be easily resolved through conventional economic policies.
The International Monetary Fund's projection of 9.5% unemployment for 2025 may prove optimistic given the current trajectory. The continued prioritization of military spending over social welfare, combined with the likelihood of continued international pressure, suggests that Iranian workers will face ongoing hardship for the foreseeable future.
Voices from the Crisis
The human dimension of Iran's economic crisis is captured in the voices of those experiencing it directly. One user on Telegram stated, "Even if wages increase by 100%, it still won't be enough". This sentiment reflects the widespread recognition that the crisis has moved beyond the scope of conventional wage adjustments.
Ali Asghar Ahaniha, an employer representative, attempted to downplay expectations, stating, "In the current economic war, we cannot expect all household expenses to be covered through wages". This comment drew sharp criticism from Labor advocates who saw it as an attempt to normalize poverty wages.
The disconnect between official responses and worker experiences highlights the depth of the crisis. While government officials discuss wage increases and economic adjustments, workers and their representatives describe a situation approaching the levels of a humanitarian emergency.
International Response and Human Rights Implications
The economic crisis in Iran raises important questions about the humanitarian impact of sanctions and economic pressure campaigns. While sanctions are designed to pressure governments, their effects often fall disproportionately on civilian populations, particularly workers and vulnerable groups.
The scale of malnutrition and poverty documented by Iranian government agencies themselves suggests that the economic crisis has reached levels that may constitute a humanitarian emergency. The fact that 60% of the population cannot meet minimum caloric requirements represents a fundamental threat to human welfare.
International human rights organizations and labor groups have begun to document the impact of Iran's economic crisis on workers' rights and living conditions. The systematic violation of workers' rights, combined with the inability of wages to provide for basic needs, creates conditions that challenge fundamental principles of human dignity and social justice.
A Nation's Workers in Crisis
Iran's workers face an unprecedented economic catastrophe that combines the immediate impact of military conflict with the long-term effects of sanctions, mismanagement, and structural economic problems. The 400% decline in wages over the past decade, combined with unemployment rates exceeding 70% and widespread malnutrition, represents one of the most severe worker crises in modern history.
The human cost of this crisis extends far beyond statistics. Millions of Iranian families struggle daily to afford basic necessities, while workers face dangerous conditions and inadequate compensation. The government's prioritization of military spending over social welfare has created a situation where ordinary citizens bear the cost of geopolitical conflicts and policy failures.
The outlook for Iranian workers remains dire, with structural problems requiring fundamental changes in both domestic policies and international relations. Until these underlying issues are addressed, Iranian workers will continue to face economic hardship that challenges their basic human dignity and right to a decent standard of living.
The international community faces difficult questions about how to address Iran's nuclear program and regional activities while minimizing harm to civilian populations. The current crisis underscores the intricate relationship between geopolitical pressure and humanitarian consequences, underscoring the need for policies that can distinguish between government actions and civilian welfare.