Labor Activists, the Living Wage and State Law in Iran
On April 8, 2020, representatives of Iran’s government, business and labor sectors resumed long overdue negotiations to revise the national minimum wage. With an economy hit hard by the COVID-19 pandemic and crippling sanctions imposed by the United States, prospects for government and business representatives to consent to a substantial wage increase were slim.
From the labor side of the negotiating table, the government’s proposed 15 percent hike, endorsed by employers, was seen as too little given the wild inflation that for years had substantially undercut workers’ purchasing power. This figure also fell short of public expectations, which labor unions themselves had helped inflate, not least by publicly demanding wage hikes far beyond what their counterparts were likely to grant.[1] While employers initially sought a wage freeze, the union representatives insisted that even a 45 percent increase would barely begin to compensate for the plunge in workers’ living standards, with some representatives demanding increases as high as 60 percent. If the unions settled for less, what would that do to their reputations?
A new minimum wage law was finally enacted around midnight, even though no agreement was ever reached. In a rare move, labor representatives collectively walked out in protest, leaving the government and employers to ratify a 21 percent increase by majority vote. Two days later, more than 6,000 rank-and-file workers and labor activists, among them intellectuals and journalists, issued a petition objecting to the “violation of tripartism,” while commending the workers’ representatives for refusing to sign off on an “unjust” deal. Decrying the new minimum wage as illegal, the petitioners called for it to be revoked and negotiations restarted in order to further increase wage rates to match the government’s announced inflation rate and meet the living wage as measured, formalized and reported by the state through a mechanism officially called the Subsistence Basket. The Subsistence Basket is an institutional procedure for collecting data about household expenditures in order to calculate the official estimate of the average cost of living, which according to Iranian labor law is—along with the inflation rate—the criteria for setting the minimum wage. The final figure reached through this mechanism is also called the Subsistence Basket.
But why did state critics and political dissidents cite this figure in a protest petition? Why should dissidents choose to take the state at its word? Why not aim for a more generous, if officially ignored, living wage figure—dozens of which were available—when it is common to discredit state data as conservative and biased? For example, in 2020 the Free Union of Iranian Workers demanded a minimum wage of more than 9 million tomans, when the officially estimated living wage was just under 5 million tomans.[2]
Rather than an isolated occurrence, however, the use of government-codified data is a key tactic of labor activism in Iran. While open defiance of formal laws and official discourse often garners attention in opposition media, labor dissent and activism also take more subtle and counterintuitive forms. Facing formidable barriers to organizing, a growing segment of Iranian labor activists are using law as a symbolic resource to secure political inclusion and a platform to voice demands. By taking advantage of the complexity of rules and principles in labor law, they can turn the language of the state against itself to promote the interests of workers. Labor activists are using law in innovative and strategic ways, not necessarily with the goal of judicial enforcement but to confer legitimacy, communicate their message, mobilize grievances and dodge repression.
The Making of the Subsistence Basket
After Iran’s current labor law was introduced in 1990, the inflation rate, as released by the Central Bank of Iran, regularly received attention in negotiations over the minimum wage. But the question of the cost of living was mostly put on the back burner, not least because prior to 2017 there was no agreement on the methodology for estimating it. The state took nearly three decades to develop a specific institutional mechanism to translate a vague legal obligation into concrete, albeit still disputed, numbers.
The body in charge of revising the minimum wage, the Supreme Labor Council, is formally comprised of representatives from labor, government and employers. The labor members, lacking extensive mobilizational and political resources, have opted instead to strengthen their hand through strategic use of long-dormant legal language. One potential strategy was identified in the provisions of article 41 of the labor law, which stipulates that the minimum wage must be tied to a living wage “regardless of the physical and intellectual abilities of workers and the characteristics of the work assigned.” The labor law, however, is silent on which institution is responsible for quantifying this requirement and how it should be calculated. As progressive as the clause seemed, in practice it was little more than an ink blot on paper that suggested radically different figures for the living wage depending the perceptions and interests of different actors.
As early as the 1990s, the officially sanctioned unions began pressing the government to calculate a baseline living wage or, at the very least, provide them with access to data to calculate their own figures.[3] This demand gained momentum after 2004 when the Ministry of Welfare and Social Security was created and charged with participating in the calculation of an official poverty line. The calls for an official living wage figure went unheeded, however, since the Ministry regarded such data as sensitive and confidential. Some of the union representatives that I interviewed recounted making requests for relevant data and waiting for hours in the Ministry’s lobby only to be turned away empty handed.
In response to the state’s refusal to determine the living wage, officially sanctioned unions began constructing a poverty line measure using data they gathered on their own through local household surveys.[4] In 2012, the Supreme Council for Labor Guild Associations of Iran launched a Special Committee for Discovering Market Prices in order to monitor price fluctuations of different household consumption items.[5] Although unions continued their attempts to calculate a living wage, government and employer representatives shrugged off their measurements as flawed and unscientific while evading calls to establish an agreed-upon mechanism for issuing any official living wage figures. Although putting a number to the living wage would not guarantee that the minimum wage was set accordingly, unions hoped the figure could be used as a bargaining chip.[6] As union representative Alireza Heidari noted in 2016, “calculating the living wage creates a number of commitments for the government and employers that, even if not fulfilled immediately, can serve as a blueprint for demand-making on the part of trade unions.”[7] In an interview with the news site Ilna, Ali Khodaei, a workers’ representative at the Supreme Labor Council explained that, “The institutionalization of the cost of living has the advantage that the government and employers have confessed that workers are entitled to much more than what they are being paid. Furthermore, in 2019 and 2020 negotiations, the labor members of the Council used the Basket rate as a bargaining chip.”[8]
Although unions continued pushing for the development of an agreed definition and methodology for calculating the living wage, a breakthrough only came with the election of President Hassan Rouhani in 2013. Under the previous presidency of Mahmoud Ahmadinejad, the Workers House—Iran’s national trade union confederation—had a troubled relationship with the government.[9] The incoming Rouhani administration assigned Ali Rabiei, a high-ranking official of the Workers House, as minister of labor. Eager to preserve the political backing of officially sanctioned unions, Rabiei proved instrumental in creating a living wage measure. A tripartite committee was set up under the Supreme Labor Council, tasked with systematically providing, maintaining and publishing data regarding living expenses.
What came to be known as the Subsistence Basket therefore grew out of compromises and contestations high up in the state bureaucracy. Pressure from outside the government to construct a living wage measure was not the main driving force. If anything, oppositional labor activists have usually shown more interest in calculating their own estimates than demanding the state calculate it for them. For example, Nameh-ye Mardom (People’s Letter), the main publication of the socialist Tudeh Party, asserted in 2017 that, “we believe workers should not allow employers, the government serving their interests, and so-called labor representatives to take the lead on determining the living wage. Wage committees [must instead be formed] in firms to calculate the living expenses in a precise and objective fashion.”[10] Other socialist intellectuals, however, viewed the Subsistence Basket as a positive development.[11]
Dissidents in Disguise
For all their skepticism about the state, however, many labor activists do not shy away from integrating the official Subsistence Basket figure into their political discourse, even at the risk of sounding contradictory, naive or submissive.[12] Countless articles, blog posts, interviews and political statements reference the Subsistence Basket to protest the government’s policy-making process and demand a larger economic distribution for the working class—even if few believe the accuracy of the underlying Basket figure. Given state television coverage, the general public also knows about the Subsistence Basket and the cost-of-living figure. In the Workers’ House public Telegram discussion group of more than 6,000 members, ordinary workers have used the Subsistence Basket to criticize the minimum wage. One user wrote: “Don’t you find it funny? Basically, they are saying a worker needs 5 million tomans to scrape by. And then they say: well, we are going to give you 3 million tomans!” Many Iranians see official data as made-up numbers used by the government to muddy the waters and crowd out independent sources of information. The Subsistence Basket is thus brushed off as yet another charade to give workers hollow hope as well as to create the semblance of government expertise and competence. The real living wage, people generally assume, must be far higher.
The government and the unions publicized the Subsistence Basket mechanism as part of a technocratic project to close the gap between the minimum wage and rising living expenses. From the outset, however, the authorities claimed that it was not an “economically realistic or viable option” to raise the minimum wage fully to match the living wage figure.[13] No practical plan of action was proposed nor did the gap between the two figures show any sign of diminishing. In fact, since it was first calculated in 2017, the Subsistence Basket figure has hovered around three times the legally mandated minimum wage. From the perspective of critics, the Subsistence Basket has turned out as suspected: long on promises, short on delivery.
But while not binding on employers, the state has effectively provided a legally recognized benchmark with which to judge the minimum wage level. Consequently, while skeptical, many labor activists find it advantageous to mention the Subsistence Basket in demands for a higher minimum wage. Although more generous estimates exist from unofficial sources, using this lower figure makes their claims appear more legitimate and inclusive. Couched in legal and official discourse, their grievances draw in sympathetic allies by reducing their fears of reprisal from government repression. As a piece of law and, by implication, a piece of the state, the Subsistence Basket is strategically incorporated by activists into their rhetoric for political purposes.[14]
The Subsistence Basket is not the only instance where the Iranian government provides rhetorical ammunition for oppositional activism. Legal symbols are often invoked from below to dissent from the government’s labor practices. Many activists believe they stand a higher chance of success if they confront the state on its own terms and use its own language to argue that the government itself is creating contradictions, transgressions or hypocrisy. Although produced by a state machinery they deeply mistrust, many Iranian activists do not treat state law, official discourse or legal codes as necessarily alien, antagonistic or intrusive. Rather than simply resist the state’s authority, labor activists instead engage, redirect and try to mobilize the state against itself. Just as with universalistic notions of equity and justice or international conventions from organizations like the International Labour Organization, workers and activists weave strands of domestic law into a flexible rhetoric and strategy. In doing so, they are not merely preaching law to a political order notorious for breaching it. Rather, they seek to influence public perceptions of fairness, legitimacy, real or perceived political risk and possibility. While usually construed from afar as a sign of political acquiescence, such uses of the law are central to activists’ attempts at mobilization, recruitment and alliance-making.
Politics and the Law
On April 14, 2020, a few days after the 21 percent minimum wage increase was passed, a group of factory workers at the Haft Tapeh sugarcane plant staged a symbolic protest against what they called the Supreme Labor Council’s failure to uphold article 41 of the labor law. Joining the rising tide of protests against the new minimum wage, they delivered in person a volume of Iran’s labor code to their local labor office with a note attached in red: “This is to remind you that the law means nothing when employers’ interests are at stake.”[15]
While workers and activists enlist legal rhetoric to push for higher wages, labor laws are deployed by different actors to mean different things. While article 41 is widely understood to refer to the indexing of wages to the inflation rate, not everyone agrees. For instance, in 2013, after the minimum wage was set, a bloc of officially sanctioned unions filed a lawsuit against the Council’s decision to raise the minimum wage “only 25 percent when inflation was as high as 32 percent.” The court, however, dismissed the case, arguing that the labor law’s article merely stipulates “attention to” the inflation rate but does not require an increase to match it.[16] If the minimum wage was intended to increase automatically with inflation, some argued, the negotiation process leading up to wage determination would be redundant.[17] Although the wording of the clause lends some credibility to this interpretation, the court ruling achieved little success in unsettling the dominant reading of the clause, which provides grounds for labor contestation over the issue of the minimum wage.
Ambiguities in the law are not dilemmas to be resolved so much as they are opportunities for political actors to creatively interpret the rules and make claims that serve their interests. For instance, according to the Supreme Labor Council’s by-laws, all it takes to pass a new minimum wage is to get the majority of the Council members to vote for one. Therefore, once two sides of the negotiation agree on a figure, there is no need to get the third on board. Such an arrangement typically means the marginalization of labor, as the government often aligns with employers’ interests even though it claims to subscribe to the principle of tripartism.[18] When the minimum wage law was ratified in 2020 without the unions’ consent, many activists thus resorted to pointing to official norms such as tripartism to question its legal validity. Like many national legal systems, Iran’s labor legislation is not a fully consistent edifice. Rather, it consists of a patchwork of rules and principles that collide, overlap or parallel one another, and thus provide resources for labor activists.
Minimum wage bargaining in Iran is often portrayed as scripted and formulaic. For many on the left, negotiations are a false facade of worker representation and participation, while actual decisions are prearranged without labor involvement. Yet there is real politics unfolding in and through Iran’s minimum wage bargaining machinery. Despite their state-controlled, non-competitive nature, Iranian state-created tripartite institutions do not operate as smoothly as their critics assume. The Subsistence Basket, for instance, was the result of political contestations, negotiations and compromises taking place inside the state bureaucracy rather than strictly dictated design and planning.
Nor can the full effects of a law be understood from its primary goal or design. While initially the unions perceived the Subsistence Basket as a tool to strengthen their bargaining power vis-à-vis their negotiating counterparts, the measure brought more public scrutiny and pressure to bear not only on their opponents but also on them. The unions could now be judged by their own standards. And their track record is not exactly stellar. While the majority of scholarship on the Islamic Republic’s labor regulations and discourse have focused on highlighting their adverse effects on workers’ rights and well-being, only scant attention has been paid to how officially sanctioned rules and codes can be used to make improvements in labor conditions. Whether they are formal plaintiffs sitting on a bench in court or workers carrying a booklet to their local labor office, these actors are engaging and contesting the formal body of the law, wrapping it in myriad contested meanings, unforeseen effects and political struggles.
[Fruzan Afshar is a Tehran-based independent researcher.]
Endnotes
[1] “The Employers’ Representative at the Supreme Labor Council: We Still Propose a ‘Wage Freeze’ Until After Corona,” Tasnim, April 2, 2020. [Persian] “We Seek a 60 Percent Wage Increase,” Tasnim, March 7, 2020. [Persian]
[2] “The Statement of the Free Union of Iranian Workers Regarding the 2020 Minimum Wage,” Kayhan London, February 10, 2020.
[3] Interview by the author with a union representative, April 2020.
[4] “For Once Enforce the Article 41 of the Labor Law,” Karvakargar, December 4, 2012. [Persian] “The Working Household’s Cost of Living is Estimated to be Over One Million and 100 Thousands Tomans,” Karvakargar, January 14, 2013. [Persian]
[5] “The Special Committee for Discovering the Market Prices Starts Working,” Mehr News, December 11, 2012. [Persian]
[6] Interview by the author with a union representative, Tehran, November 2018.
[7] “The Rest of the Labor Representatives Should not Violate the Subsistence Basket,” ILNA, March 7, 2016. [Persian]
[8] “Merely Calculating the Subsistence Basket is Useless,” ILNA, December 19, 2020. [Persian]
[9] Farhad Nomani and Sohrab Behdad, “Labor Rights and the Democracy Movement in Iran: Building a Social Democracy,” Northwestern Journal of International Human Rights 10/4 (Summer 2012).
[10] “Toward a National Campaign in Defense of the Workers’ Wages,” Name-ye Mardom 1041 (December 25, 2017). [Persian]
[11] Fariborz Rais-Dana, Hamdeli Daily, March 5, 2017.
[12] Tudeh Party of Iran, April 2, 2018. Radio Zamaneh, April 10, 2020. “Why Are Pensioners’ Interests Not Served?” Name-ye Mardom 35 (July 20, 2020). “Bulletin of the Communist Party of Iran,” CPIRAN, September 2020. [All Persian]
[13] “The Labor Ministry’s Policy for Bridging the Gap Between the Wage and the Cost of Living Was Announced,” Mehr News, February 16, 2018. [Persian]
[14] “The Waves of Unemployment through Casualisation,” Payaam, June 29, 2019 [Persian]; Yashar Javid, “Enacting Slavery Wage for Workers,” Rahekargar, April 11, 2020 [Persian]; Rahkargar, April 26, 2020 [Persian]; “The Minimum Wage Enactment at Odds with Workers Interest,” Name-ye Mardom 5 (April 2, 2018) [Persian]; The statement by Free Union of Iranian Workers, Iranwire, April 11, 2020. [Persian]
[15] “Haft-Tappeh Workers Sent a Volume of Labor Law to the Labor Office,” Ilna, April 14, 2020. [Persian]
[16] For the full text of the verdict, see Divan-e Edalat, March 18, 2014.
[17] “Bahaadori Jahromi: The Workers’ Minimum Wage Can be Revoked in the Justice Tribunal” SNN, May 3, 2020. [Persian]
[18] “Shari’atmadaari: The Labor Issues Can be Resolved Through Tripartism,” IRNA, October 28, 2018. [Persian]
