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Iran joblessness borders on the critical

Iran’s army of job seekers is growing in ranks.

Iran’s army of job seekers is growing in ranks, presenting state officials with a quandary on how to deal with a predicament which is bordering on the critical. 

President Hassan Rouhani has described unemployment along with inflation as the biggest preoccupation of his administration. Other officials have duly sounded alarm bells.

The challenge is multifaceted and really a hard nut to crack.

A steady flood of new entrants to the labor market is repulsed by a rise in the cost of businesses.

Moreover, the Iranian economy is still reeling from two years of stagflation marked by a malignant mix of inflation, slumping growth and high unemployment.

Minister of Labor, Cooperatives and Social Welfare Ali Rabiei says Iran has to generate about 800,000 jobs a year in order to cope with runaway unemployment.

“We cannot afford to wait for an economic growth to create jobs,” he says. Hence, the idea of proliferating small business units is being seriously considered by his ministry, Rabiei says.

Iran created 400,000 jobs in its production and industry sectors last year after subtracting 200,000 workers who were laid off, according to the minister.

“About 600,000 people were given compulsory insurance coverage during the period where 200,000 job holders were dropped in industrial units,” he said.

Figures in question

Even this figure seems to be rather speculative, based on the formula of 110,000 jobs for every percentage point of economic growth.

“Given the economic growth of four percent which Iran achieved last year, this amount of jobs has been created in the country,” Rabiei said.

Government’s critics dispute the figures, with MP Elyas Naderan claiming that nearly one million workers had been dismissed since President Rouhani came to office in mid-2013.  

According to figures released by Iran’s Statistics Center, 2,530,064 were without jobs around this time a year before.

However, the definition of unemployment introduced during the tenure of former President Mahmoud Ahmadinejad is where the shoe pinches.

Based on the definition, adopted by the current government, every individual aged above 10 is deemed employed if they work an hour per week.

The formula before was for a minimum of two days of work per week in order to qualify as employed.

Illegal foreign workers  

Iran’s labor market is also under pressure from illegal foreign workers, especially from neighboring Afghanistan.

According to unofficial figures, there are as many as two million illegal foreign workers in Iran who have been staying for three decades.

Labor ministry officials say every 250,000 foreign workers raises jobless rate by one percentage point.

But foreign workers are favored by work owners because they are cheaper and are not provided any insurance coverage or other securities.

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