Iran International
As Iran's fiscal year draws to an end in March, the government and parliament grapple with the challenge of raising wages in line with an inflation rate of 40% that has pushed millions of workers to poverty.
Raising wages would be fraught with challenges. The heavily dominant government sector lacks the funds to pay higher wages, while quasi-governmental and private enterprises could face bankruptcy if they attempt to double workers’ pay.
But why is doubling wages even being considered? Ordinary workers currently earn less than $150 a month, while official estimates indicate that a family of three needs at least $450 a month to cover basic necessities.
This disparity stems from persistent inflation, averaging 40% annually over the past five years. Since early 2018, Iran's current has plummeted twentyfold, while wages have increased less than eightfold.
Economists warn, however, that doubling wages is not a viable solution. The government cannot afford the increases, and if it resorts to printing money to meet the demand, inflation will only worsen.
Morteza Afqah, an economics professor, told the conservative Nameh News website in Tehran that Iran’s economic crisis cannot be solved through purely economic measures because the root cause lies in its foreign policy. He argued that the only path forward is to reach agreements with the United States and Europe on nuclear and other contentious issues. According to Afqah, sanctions relief is essential before Iran can even consider sustainable economic solutions.
Top decision-makers have acknowledged the severity of the economic crisis in public, emboldening some media outlets and commentators to be increasingly vocal about the urgent need to strike deals with the West.
Ahmad Zeidabadi, a prominent writer and commentator in Tehran, expressed the frustration of many in a tweet on Thursday. Referring to insiders who suggest they are willing to “negotiate with the devil” to save the Islamic Republic but remain opposed to talks aimed at rescuing the economy, Zeidabadi warned that this mindset could further anger a public already bearing the brunt of inflation and hardship.
Similarly, Sadeq Zibakalam, another well-known commentator, reminded his followers in a post on X that over a decade ago, the head of Iran’s nuclear program had promised to build five nuclear reactors for energy production. “
Where are the reactors?” he asked, noting that nothing materialized while Iran has lost hundreds of billions of dollars to sanctions imposed for its nuclear activities. “It’s time to negotiate,” he urged the government.
Despite these calls for action, Iran’s Supreme Leader has yet to signal any willingness to allow direct talks with the United States or to compromise on key issues. Meanwhile, US President Donald Trump has not officially outlined his policy toward Tehran, though his aides have indicated a tough stance on enforcing sanctions.
With the economy in crisis and public discontent rising, Iran’s leadership faces mounting pressure to make difficult decisions that could reshape the country’s trajectory. Whether they choose to engage with the West or continue their current path remains to be seen, but the stakes could not be higher for the Iranian people.
