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Rouhani Promises Wage Increases As High Inflation Persists

Iranians go shopping at a street market for the New Persian Year, called Norouz, in Tehran, March 19, 2018

Iranian President Hassan Rouhani has promised a 20 percent increase in public sector employee salaries beginning in the new year, which starts March 21, according to the Persian calendar.

The announcement comes as a surprise, since earlier in the month Rouhani’s government had said it could not guarantee the wage increases approved by Parliament. Speaker of the parliament Ali Larijani argued at the time, “Raising salaries and wages is a decision made by the parliament and the government does not have the authority to dismiss the legislature’s decision.”

Meanwhile, the Supreme Labor Council of Iran, the body responsible for setting the minimum wage, announced March 19 that it has proposed toraise the minimum wage from the current 11.2 million rials ($90) per month to $140 (based on free market exchange rate) beginning March 21.

According to the Research Center of the Islamic legislative Assembly, the cost of living for an Iranian family amounts to 37.6 million rials (approximately $280 based on free market rate) per month.

The decision was made after a nine-hour meeting attended by representatives of employers, workers, and the government.

Iran's inflation is skyrocketing, with food prices rising at a double-digit monthly rate in recent months. Rising costs have put even more pressure on the household budgets of Iranians living on the minimum wage.

The goods and services consumer price index registered a year-on-year increase of 42.3 percent increase in the 11th Iranian month (Jan. 21-Feb. 19) compared with the same month the previous year, the Statistical Center of Iran said in its latest report.