Unemployment in Iran, a problem with political and social dimensions
The most important problem for the next decade in Iran is the problem of unemployment, a problem that may even have political and social dimensions, according to Iranian experts.
In the summer of 2017, when the twelfth government took office, President Hassan Rouhani announced that his government’s top priority would be to solve the unemployment problem in the country and pledged to create 900,000 jobs per year.
The main anti-government protests of January 2018 and November 2019 and the incident of the coronavirus pandemic changed the priorities of the Iranian government to prevent any protests and the rise of the people.
For almost a decade, Iran’s economic growth has been close to zero, which means that according to the logic of the economy, the creation of new job opportunities and the elimination of previous job opportunities should be close to zero. However, the problems seem so serious in Iran that no one can solve the unemployment crisis.
Iran’s population in 2011 was around 75 million and now, in 2021, it is estimated to be around 84 million. About nine million people were added to the Iranian population during this decade, but apparently there is no prosperity in the Iranian labor market, and that means that if four years ago the crisis of the job was just a light wind and his alarm siren a little whistle, now that light wind has become a thunderstorm and his alarming siren has become a deafening sound.
The official unemployment rate in Iran is not accurate. The latest data from the 2018 Labor Force Survey Plan gives a more precise picture of this question. According to the Iran Statistics Center, that year around 23.8 million people were employed across Iran, of which around 13 million (or 5%) were employed at least 44 hours per week.
In contrast, out of the total salaried population in 2018, around 9.7 million people (or around 40.8%) worked less than 44 hours per week, which in general indicates “ underemployment ”. Simply put, almost 41% of all Iranians who were employed in 2018 did not have a full-time job (in the sense of a full-time job).
However, data from the Iranian Statistics Center, last updated in April 2021, shows that the unemployment rate in Iran has declined in recent years. This may seem strange at first glance, as we all know that the general state of the Iranian economy has steadily deteriorated in recent years.
However, economic logic supports this data, because by reducing the real (or nominal) wages of workers, it becomes easier and cheaper for the employer to employ labor. Thus, the unemployment rate (according to the definition of the Statistical Center, the ratio of the unemployed population to the active population (employed and unemployed), multiplied by 100) in the winter of 2020 across the country, was equal to 9.7%.
Unemployment rates in Iran have declined in recent years, but these statistics are naturally based on self-reported individuals.
This rate was equal to 10.6% in winter 2019 and 12.5% in winter 2016. Thus, over the past five years, the unemployment rate has decreased, because the wages of employees in practice (for example, in terms of their dollar wages) have been lower than before and it has become easier for the employer to pay. For this reason, the employer prefers to hire a larger workforce.