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Pink Slips Only Tell Half The Story In Iran

Iran's official unemployment rate is about 10 percent, but many independent estimates consider it to be at least twice that.
Iran's official unemployment rate is about 10 percent, but many independent estimates consider it to be at least twice that.
It's been four months since Karim lost his job at a small carpet factory in the western Iranian city of Sanandaj. His employers told him he was one of many layoffs to cut costs in the face of lagging sales.

The sole provider for his family of six, including a disabled child, Karim says he's been borrowing money from friends and relatives for food. He gets meager handouts from charity organizations, but it's not enough to feed his family.

"I'm 47 years old, and all my adult life I've been a factory worker, producing carpets," Karim says. "I can't get jobs in other fields, and it's too late at my age to retrain myself to do something else. Besides, it seems like everybody is losing their jobs here."

Karim says he's appealed to city officials for help but has been told there are many others in similar situation.

In fact, Iranian officials recently announced that the country lost 250,000 jobs in the six months to September. Some Iranian experts say the real figure is more like half a million, but that the figure is kept artificially low and many other "underemployed" people fall through the cracks. Iran has a population of around 65 million.

"In most manufacturing companies, many employees work on short-term contracts and there is no guarantee their contracts will be extended," Ali Dehghan Neya, from Iran national social-security organization, tells RFE/RL's Radio Farda. "After a month or two, many of them are out of jobs, but official statistics currently count them as employed people."

Other sectors of the economy, like the tens of thousands of vendors who hawk cigarettes and sweets in the streets, are officially considered employed although they have no social protection or insurance.

Iran's Statistics Center puts unemployment at 10.2 percent in its latest figures, although government critics reckon that it's more like 20 percent.

Labor Minister Mohammad Jahromi recently warned that the jobless rate could rise significantly in the coming years. Jahromi called on the government and parliament to take urgent action to help create new jobs and support troubled companies.

Soft Spots

A vast number of Iran's recently lost jobs were in manufacturing, agriculture, and among small and medium-sized businesses. Thousands of pink slips have been handed out at long-running businesses like Alborz Lastic, the oldest tire manufacturer in the country, a major sugar factory in Khuzestan Province, and a textile factory in Mazandaran.

Alireza Nourizadeh, director of the Center for Arab and Iranian Studies in London, says the government's decision "to leave the country's doors open to cheap, foreign-made goods has resulted in many domestic companies and businesses going bankrupt because they could not [prevail against] the competition with cheap, imported goods."

President Mahmud Ahmadinejad's critics have long accused him of mishandling the economy, resulting in runaway inflation and creeping poverty. Official figures put inflation above 24 percent, and the Iranian parliament's Planning and Budget Committee says one in five Iranians lives beneath the poverty line.

With an election year ahead, critics warn that if the government does not take swift action to curb rising unemployment, the country will face a serious social crisis, especially within the country's disproportionately large segment of young people.

Mounting frustration "could lead to rising crime rates and a breakdown in law and order, and it could eventually end up in major social unrest," Nourizadeh says.

There are signs that some of that discontent has already turned up publicly.

Roozbeh Bolhari, a Radio Farda correspondent who spent two decades covering social and economic issues for Iranian media, cites recent protests against rising unemployment in a number of Iranian cities, including a demonstration by workers at the Iran-Sadra Shipyard in Bushehr and a rally by Alborz Lastec workers in Tehran.

Isolation Doesn't Help

A Tehran-based economist who is close to former Iranian President Mohammad Khatami argues that there are two major solutions to Iran's unemployment problem.

"Privatization and considerable foreign investment would boost Iranian economy and create jobs," the economist, who asks to remain anonymous, tells RFE/RL. "However, none of the solutions are achievable under the current Iranian government."

Iran's economy is largely state-owned and virtually all large-scale industries are under direct or indirect government control. Long-running U.S. sanctions and more recent economic sanctions imposed on Tehran as a result of its disputed nuclear program have kept Western investors out, for the most part.

In the meantime, Karim says he has sent a letter to senior officials in Tehran and is waiting for them to hear his complaint and "save his family from their misery."

"I check job centers every day to find any kind of employment and I ask authorities to help me," Karim says, "but no one seems to care."

RFE/RL's Radio Farda contributed to this report

RFE/RL Iran Report

RFE/RL Iran Report

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    Farangis Najibullah

    Farangis Najibullah is a senior correspondent for RFE/RL who has reported on a wide range of topics from Central Asia, including the impact of Russia’s invasion of Ukraine on the region. She has extensively covered efforts by Central Asian states to repatriate and reintegrate their citizens who joined Islamic State in Syria and Iraq.

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