One Million Workers Lose Insurance: Job Crisis Threatens Iranian Pensions

Workers' conditions in Iran appear to be worsening due to the economic situation resulting from war and blockade. According to estimates reported by the Iranian labor agency "Elna," approximately one million workers have been removed from the list of social insurance contributors in Iran within a single year, while the industrial sector has lost around 630,000 jobs.

Mehrdad Darani, an expert on labor relations and social security and a member of the insurance committee at Iran's "House of Labor," states that some of the workers who lost their jobs have shifted to service activities and temporary professions. However, their continued work does not mean they retain their previous income or insurance coverage.

630,000 Industrial Jobs
Data from the Statistical Center of Iran, published by "Elna," revealed that the number of employees in the industrial sector decreased by approximately 630,000 people in spring 2026 compared to the same period the previous year, causing industry's share of total jobs to fall to 31%.

In this context, the Iranian agency "Tasnim" published a report stating that the total number of employed persons in Iran declined by about 450,000 on a year-over-year basis, reaching 24.67 million workers. Meanwhile, the unemployment rate rose to approximately 9.1%, compared to 7.3% in spring 2025.

The data also showed an increase in the economically inactive population to 39.54 million people, a rise of nearly 796,000 over the year, while the economic participation rate fell to 40.7%.

According to the definition used by the Statistical Center, the category of economically inactive individuals includes those who are neither working nor seeking employment, such as students, homemakers, and retirees.

From Factories to Apps
Darani adds that some workers moved from factories to become taxi drivers via electronic applications, while others left industrial workshops to work in trade and brokerage, or transitioned from regular construction jobs to intermittent daily labor.

He explains that some of these workers now earn only one-third of their previous incomes, despite still being classified as employed in official statistics.

The problem of informal employment is not limited to recently laid-off workers. Seyed Malek Hosseini, Deputy Minister of Cooperation, Labor, and Social Welfare of Iran, stated in remarks carried by "Tasnim" during 2025 that approximately 56% of jobs are located in the informal sector.

Iranian Labor Minister Ahmad Midri announced during the same year that there are about 6 million workers without insurance coverage, including two million engaged in internet-related activities.

Declining Contributions
The Iranian Social Security Organization relies on insurance contributions to finance most of its obligations. The organization revealed in September (Aylul) 2026 that more than 80% of its resources are linked to contributions collected from workers and employers.

Latest published data from the organization indicates there were 15.66 million primary insured persons at the end of the Iranian year 1404, compared to 5.22 million pensioners and primary beneficiaries.

In July (Tamuz), the Executive Director of the organization, Mostafa Salari, announced that pension payments exceed 140 trillion tomans monthly (approximately $523 million according to the parallel market exchange rate), alongside about 210 trillion tomans for other expenditures.

And warned that the current financial model is unsustainable given the shrinking contributor base and rising payouts.

Darani noted that the shift towards informal work poses a long-term threat to the sustainability of the pension system, as fewer workers contribute regularly while more claim benefits.