War did not create Iran’s labor crisis, but it has deepened it, making more visible how inflation, layoffs, and unpaid wages are pushed onto workers’ lives.
At the close of the last year, annual inflation stood at 50.6 percent. More than just economic data, this figure signaled that Iranian society had entered a new stage of livelihood erosion. Under wartime conditions, that older crisis is now reappearing with greater intensity in the form of layoffs, unpaid wages, suspended production, and collapsing job security. The recent protests by workers at the Ilam Gas Refinery and by workers at Darugar in Tehran are only two examples. In one case, the issue is mass dismissal and unemployment; in the other, months of unpaid wages. In both, the same pattern is visible: the costs of crisis are being shifted from the state and employers onto workers’ lives.
A Number That Is Not Just a Number
The Statistical Center of Iran reported that in March 2026, annual inflation reached 50.6 percent and year-on-year inflation 71.8 percent. At the same time, monthly inflation in the food and beverages category reached 8.6 percent, while year-on-year inflation in that same category hit 112.5 percent. In other words, the heaviest pressure is falling not simply on consumption in general, but on the most essential layer of life for the lower classes: food, survival, and the day-to-day reproduction of life itself.
When food prices rise on this scale, we are no longer dealing with “high inflation” in any ordinary sense. What is happening is that large parts of the population, especially wage workers, retirees, and precarious workers, are being pushed from one level of life to a lower one. Not through one dramatic collapse, but through daily attrition: buying on credit, cutting essential items, postponing treatment, and continually retreating from the bare minimum needed to live.
War Did Not Create the Crisis; It Intensified It
Even before the escalation of hostilities, Iran’s economy was already under severe pressure from structural inflation, recession, sanctions, corruption, and chronic instability in the labor market. War has acted as an accelerant. This should be stated plainly: war is not the primary cause of this collapse. But in such a context, every new shock, from disruptions in transport and communications to uncertainty in production and exchange, is immediately passed on through prices, jobs, and wages.
In practice, this means that the long-standing gap between wages and the cost of living has become far harsher. Even before this, many workers earning the minimum wage could not cover the real costs of life. In wartime, that gap no longer means only gradual deprivation; it means pushing larger sections of society toward outright poverty, debt, and complete insecurity. The issue is not simply that “life has become harder.” The issue is that society is entering a phase of livelihood breakdown in which layoffs, unpaid work, and survival through credit are becoming normal.
Ilam: For Workers, War Appears as Layoffs
The protest by laid-off workers from Phase Two of the Ilam Gas Refinery in Chavar offers a clear picture of this process. According to ILNA, around 350 workers are employed on the project through the contracting company Jahanpars. From the beginning of Mehr 1404 (late September 2025) to Farvardin 1405 (March-April 2026), more than 150 of them, most of them local workers, lost their jobs after their contracts ended. The workers first gathered in front of the Ilam Labor Office and then moved their protest to the Chavar Governorate.
These layoffs were not carried out through an official and transparent shutdown of the project, but through the familiar mechanism of “contract expiration.” This is precisely where the contracting system in Iran reveals its true function: not as a managerial model, but as a permanent tool for stripping workers of security and protections. An employer can keep a worker on a project for years, but the moment crisis hits, that same worker suddenly becomes nothing more than an expired contract—without job security, without any clear guarantee of returning to work, and trapped in the endless buck-passing of responsible institutions.
The ILNA report also noted conflicting accounts of the governorate’s role in the workforce reduction. The contractor claims the layoffs took place with the governorate’s knowledge; the governorate denies this. That contradiction is itself part of how the crisis works. When responsibility is spread across the contractor, the employer, and local authorities, the result is not just administrative confusion. It is the production of defenselessness for workers. Everyone is present, but no one is accountable.
Darugar: When Being Employed No Longer Means Being Paid
At Darugar in Tehran, the crisis takes a different form. Here, workers are still on the factory floor, but they have gone months without pay. ILNA reported that workers at the plant had faced three to five months of unpaid wages, along with unpaid New Year bonuses and other bonuses, and that one worker said they could no longer even cover their family’s food costs. A few days later, ILNA reported that only one month of arrears had been paid, while most of the workers’ claims remained unsettled.
This shows that in Iran, being employed does not necessarily mean receiving wages. A worker may show up every day and still live in conditions close to unemployment in slow motion: without adequate income, without the ability to plan ahead, and dependent on debt and credit. In that sense, wage arrears are not just an employer’s violation; they are a way of transferring economic risk onto labor itself. The factory continues to operate, management and financial problems persist, but it is the worker who has to live with uncertainty, an empty table, and the constant delay of wages.
The State and the Private Employer: Two Faces of the Same Logic
At this point, it would be a mistake to separate the behavior of the state from that of the employer. In the existing structure, the two often work hand in hand. Employers dismiss workers or delay wages; the state either stands by or, through delay, ambiguity, and inaction, helps normalize exactly this situation. The issue is not simply a lack of oversight. The deeper problem is that within the existing order, protecting profit and containing crisis take priority over protecting workers’ livelihoods.
This is why war is not merely an exceptional situation for the state and employers; it is also an opportunity. An opportunity to justify layoffs, delay payments, silence protests in the name of emergency conditions, and impose the idea that now is not the time to make demands, but the time to endure. But in workers’ real lives, that same call for “patience” means hunger, overdue rent, postponed medical treatment, and the gradual unravelling of everyday life.
These protests also show that the labor crisis in Iran is not only a crisis of wages or employment; it is also a crisis of power. In both cases, and in many others like them, workers have turned to official institutions and received no meaningful result. This means that for large sections of the workforce, the official channels for dispute resolution and the pursuit of rights are neither effective nor trustworthy. Workers are left to confront the employer, the contracting system, institutional inaction, and wartime conditions all at once.
In this situation, the fragmentation of protests becomes part of the deadlock. In one workplace, wages are unpaid; elsewhere, workers have been laid off; somewhere else, a project is half-shut down. But as long as these crises remain disconnected from one another at a broader level, the existing order can reduce each one to a local, administrative, or technical issue. This is exactly where the question of independent organization, workers’ councils, and solidarity networks moves beyond the level of a slogan and becomes a material necessity for survival.
From Chronic Poverty to Deeper Breakdown
Inflation at 50.6 percent, food inflation above 112 percent, layoffs in major projects, and months of wage arrears in production units all point to one thing: Iran’s working class is not simply living under the pressure of chronic poverty. It is entering a deeper stage of livelihood breakdown. This process will not be stopped by moral appeals, one-off promises, or endless references to “special circumstances.”
What we are seeing today is a clear pattern: the state does not manage the crisis; it pushes it downward onto society. Employers do not absorb the costs; they shift them onto workers, and war makes this more brutally visible. In this context, the protests by workers in Ilam and at Darugar are not merely reactions to isolated injustices. They are signs of a deeper rupture: a gap between workers’ real lives and an order that reproduces its own survival by destabilizing those very lives.
