How People’s Per Capita Income Evaporated
How People’s Per Capita Income Evaporated According to Iran Gate, recent statistics show that experts are reporting a significant decrease in the per capita income of Iranian citizens this year. This point signifies an increase in the gap between the rich and the poor and indicates the worsening living conditions of citizens. Economists believe that the main driving force of poverty in any economic system is the inflation rate. In Iran, this driving force is highly active with an inflation rate close to 50 percent.
According to the data published by the Iranian Statistical Center, the inflation rate has recorded a growth of 580 percent from 2016 to the present, which is almost unprecedented among countries worldwide. Only Venezuela and Zimbabwe have managed to break such a record and surpass Iran.
The Income That Evaporated
This statement can mean the worsening living conditions of people due to the devaluation of the Rial over many years. Meanwhile, the income of Iranian citizens, employees, and those with fixed jobs and incomes has increased by slightly more than 300 percent in the last 6 years. Comparing this statistic with the nearly 600 percent inflation rate over the same period indicates about a 50 percent decrease in the per capita income of this segment of society.
The Depth of the Disaster: Income Translated to Dollars
Now, if we convert the earnings of employees in Iran to the exchange rate, the severity of the situation becomes even more apparent. According to published reports, the income of public and private employees has decreased from about $620 in 2017 to about $215 in 2021. In other words, when we translate the income of employed Iranian citizens to the US dollar, the numbers show a one-third reduction in the earnings of those with fixed jobs, both public and private employees, in just 5 years.
Meanwhile, calculating the minimum wage set by the Ministry of Labor reveals an even greater disaster. With the Supreme Labor Council’s approval, the minimum wage in 2017, after a 145 percent increase from the previous year, reached 930,000 Tomans, on the verge of reaching a million Tomans for workers’ income.
However, in 2022, the minimum wage for workers was set by the Supreme Labor Council at 4,179,750 Tomans. Now, converting both figures to dollars, it can be said that Iranian workers received around $200 monthly in 2017, but this year, due to price surges in the currency market, this figure has dropped to less than $96, meaning the income of Iranian workers and minimum wage earners has halved.
Raisi’s Government and the Inflation Surge
However, the years 2021 and 2022 are recognized as inflationary turning points, particularly for the surge in the exchange rate, because in 2017 and 2018, the dollar rate increased following Trump’s withdrawal from the JCPOA, but during the 19-month period of Raisi’s government, a similar event did not occur that could be considered a catalyst for the currency market to increase the dollar price.
Nonetheless, Raisi’s government has recorded a 20,000 Toman increase in the dollar price in just 19 months. In fact, the approximately 100 percent increase in the exchange rate has halved the income of Iranian citizens in just the past year and a half. In other words, more than half of the reduction in people’s purchasing power over the past 5 to 6 years belongs to a government that has been in power for only a year and a half, and this leadership continues.
Looking at the trend of inflation rate fluctuations also intensifies concerns, as the recent months’ inflation rate indicates a significant increase in this important economic metric. The exacerbation of inflation means nothing other than a decrease in people’s purchasing power, leading to an expansion of poverty in society and increasing social dissatisfaction.