A new report shows that the 60 percent increase in the minimum wage in 1405 was neutralized in just 45 days, and the sharp increase in the exchange rate and gold has once again reduced the purchasing power of wage-earning households.
According to the Khabar Online website, the minimum wage approved for 1405, which was approved on March 16, 1404, increased by 60 percent to 16,625,000 Tomans. This is while the minimum basic salary in 1404 was about 10,390,000 Tomans.
The report emphasizes that although this year’s wage increase was one of the highest percentage increases in recent decades, the jump in prices and inflation has caused the effect of this increase to disappear in a short time.
According to the report, the minimum wage was worth $116 when it was approved, but with the dollar rate increasing to 190,000 Tomans in mid-May, its dollar value decreased to about $87.5; a figure that is almost equivalent to the purchasing power of wages in February of last year.
On March 16, 1404, the rate of one US dollar was about 143,700 tomans, but by May 14, 1405, the dollar had fallen to about 190,000 tomans. The online news report cited the devaluation of the rial as the main reason for this decline.
The purchasing power of wages based on gold has also decreased significantly during the same period. At the time of the 1405 wage approval, each gram of 18-carat gold was worth about 16,400,000 tomans, and the minimum basic salary was equivalent to more than one gram of gold. However, by May 14, the price of each gram of 18-carat gold had reached 20,300,000 tomans, and the value of the minimum wage had decreased to 0.81 grams of gold.
According to the report, in the first 45 days of the year, about 20 percent of the purchasing power of wage-earning households and the working class has decreased.
The report also points to the downward trend in the purchasing power of wages over the past 15 years. According to this study, in 2011, the minimum wage of 330,000 Tomans was worth $305, while the minimum wage of 16,625,000 Tomans today is worth only about $87.5.
According to Khabar Online, although the minimum wage has increased more than 50 times in nominal terms over the years, the real purchasing power of wages in 2011 was about 3.5 times higher than today.
The highest purchasing power of wages was recorded in the gold index in 2015, when the minimum wage of 712,000 Tomans was worth 7.6 grams of 18-carat gold. This figure has now reached 0.81 grams of gold.
According to this report, the purchasing power of wages based on gold in mid-May 1405 is only about 10 percent of the purchasing power of 2015.
