Coronavirus threatens Iranian laboure force not covered by social insurance

Amir, 46, is sitting on a plastic stool in his small coffee shop. He speaks energetically with a client who is buying a pack of 250gr roasted Brazilian grinded coffee. Amir is happy and thankful that his business is still running and he tries to keep positive.
“Three friends of mine have closed their shops”, tells me Amir, while putting the box of coffee-bean on the shelf. “Their rental contract came to an end. The landlord had asked them to increase the monthly rent by 20 million Rials* ($129 @MR, $476 @GR). They couldn’t afford it and therefore gave the shop back. Now one of the shops is rented by an apothecary”.
The Majlis Research Centre estimates that the closure of businesses due to Coronavirus outbreak in Iran can result in 3 to 6 million job losses.
In its latest report, it also estimates that the economy would shrink by 6 to 11 percent, in the best- and worst-case scenarios respectively. But the unemployment would not be felt evenly through different social levels, admits the Government. This is because so many people are not covered by Social Insurance and therefore cannot receive unemployment benefits.
“I don’t pay the social insurance contribution”, admits Amir, “neither my friends have done it so far”.
It is because they belong to an upper-class society of Iran who economically feel relatively safe and mainly run their own business. Still the Ministry of Social Welfare of Iran says that the rate of Social Insurance Coverage among the households with highest income is considerably higher than those of low-income.
Households in Iran are divided into ten levels according to their income range. The tenth level earns the most and the Social Insurance coverage among them is about 35%.
This is while the insurance coverage among the first level (i.e. with lowest income) is only 13%. It is also very common that among these families only one person earns money.
“I am a labourer”, explains Sohrab, 22, from Lorestan Province of Iran. “I came from Borojerd (a city in Lorestan Province) to Tehran to work as construction labourer and send the money to my mother and two sisters in our village”.
Now he is left without work and income, so is his family; like thousands other “daily paid” labourers who are hired for a certain duration and then must search for another job.
According to Ministry of Labour and Welfare, 4.5 of Iranian households belonging to the lowest five income-level are not officially employed and therefore cannot receive any insurance coverage. This is equivalent to 19% of all Iranian households.
The report by Majlis Research Centre admits that 70% of Iranian labour force is not covered by Social Insurance.
 “The Government has assigned 50,000 billion Rials ($1.19b @GR) aid for the unemployed people”, confirmed Masoud Babaii, Head of the Unemployment Insurance Department of Ministry of Labour and Welfare on Tuesday. “This is an additional support to be paid to families who are not even covered by insurance. We are trying to find and register those hit financially by Coronavirus outbreak and provide them with 2 million Rials to cover for food.”
But because of lack of a proper data-gathering system, it seems very hard to figure out those who are struggling to survive.
Many of these “daily-paid” labourers come from other cities of Iran where they have no chance to find a job. These are mainly “under-developed” areas of Iran and are deprived provinces. Although one might think that living costs are lower in these areas, but the new report of the Statistical Centre of Iran (SCI) claims that the increase in prices in such provinces have been significantly more than other cities.
The SCI says that while the inflation rate for almost all provinces is above 30%, the prices have soared considerably in three provinces of Kurdistan, Kohkiluye & Boyer-Ahmad and Southern Khorasan. In these provinces the Consumer Price Index (CPI) has increased by 3.8% with respect to a month ago. This is particularly important because these provinces are among the poorest provinces of Iran. While CPI for big cities like Tehran for the past month has been up by only 1.2%.
The inflation rate for urban households in Iran over the past 12 months, have been 31%, while for rural families, the inflation rate has reached nearly 34%, add the report of the Statistical Centre of Iran.
In another word, families like Sohrab’s are going to suffer more than those like Amir’s.
*We don’t know anymore which exchange rate to use; we therefore use both. The Market Exchange rate currently is 1USD=154,930 Rials and we shall show it with MR, and the governmental exchange rate is 1USD=42,000 Rials, we shall show it with GR.