Why do Iranians work hard and earn little money?

Why do citizens of some countries work less and earn more, and why do many Iranians, with two or three jobs, still feel that the more they run, the less they achieve? An answer to these questions could lie in the high “energy intensity” index in Iran, and perhaps the next government of Iran in 1400, will have to make a “painful” economic reform in this area.

Mohammad Mehdi Hatami; Contrary to what may seem, workers in rich countries work less than workers in poor countries. In simpler terms, a worker’s working hours in rich countries are shorter than those of his counterpart in poor countries over a period of time.

It is also important to note that a “worker” is one who sells his labor to an “employer” for wages. Accordingly, a programmer as much as a car factory worker fit into this definition.

Who works the most?
Various economic reports show that as an economy becomes more developed and wealthy, people’s working hours decrease. The reason is almost obvious: Workers in rich countries earn more (with absolute terms, for example, in dollars per hour worked) with fewer working hours and mostly more specialized jobs.

A statistical and analytical report published on ourworldindata.org compares working hours and income among citizens of different countries. On this basis, for example, Swiss citizens, who are among the richest people in the world, have an average income about 20 times higher than that of Cambodians. It is clear how such a difference, a difference of 2,000 percent, will affect the lives of the citizens of the two countries.

But if by category, how much do citizens of different countries work? The report’s data show that citizens of countries such as Cambodia and Myanmar, which are among the poorest in Asia and have one of the lowest GDP per capita ratios in the world, are ironically on the list. There are also countries whose citizens have more working hours during the day.

In Cambodia, an average worker works about 2,456 hours a year, while in Switzerland, workers work an average of about 1,590 hours a year. (About 900 hours less)

Other sections of the report, whose data date back to 2017, show that, for example, Germans, Norwegians and French have the highest incomes with the lowest employment rates. Citizens of countries such as the United States, Britain, Japan and Ireland are next in line.

Citizens of countries such as India, China, Malaysia and Singapore, on the other hand, work far more than German or Norwegian citizens. For example, while a German works less than 1,400 hours a year, Chinese citizens work about 2,200 hours a year and Turkish citizens work a little over 1,800 hours.

However, with the increase in “national income”, the working hours of workers also decrease, and this is true not only in comparison between different countries, but also in comparison between different historical periods in a single country.

Is it true that some nations are “hardworking”?
We have heard a lot that the Japanese are a hardworking people or that the citizens of some countries in the Persian Gulf are not “working people”. But is it realistic to attribute these general characteristics to citizens of different countries and is it supported by statistical data?

The answer to this question is not so simple. The first problem is that accurate statistical data may not be readily available over the years in different countries. On the other hand, the nature and form of the economy vary from country to country, and in a country like the United Arab Emirates, for example, where many jobs are in trade, finance, or large investments, the working hours will naturally be shorter. Was.

On the other hand, there are some statistical data, including in the report mentioned above, that can show the “hard work” of the citizens of some countries in a relative way. For example, in 2017, South Koreans worked an average of 2,100 hours a year. In 2000, the citizens of this country worked about 2,500 hours, in 1989, about 2,700 hours, and in 1977, about 2,800 hours.

In other words, if we consider the working week as 5 days, the people of South Korea in 1977 (around 1355 AH) worked about 10.7 hours a day. For those Iranians who wonder how South Korea has gone from being close to Iran’s economy to one of the world’s largest economies in nearly five decades, such a comparison may not be without merit.

Why do citizens of some countries earn more money?
But why do citizens of some countries work less and earn more money, while citizens of other countries are forced to work more but do not make progress in life? The key to answering this question lies in job “productivity.”

“Productivity” in economics, and of course many other areas, is generally calculated as the ratio between “output” to “input”. In simpler terms, how much should be “spent” to create a certain amount of “revenue”. For example, if you want to start a restaurant that has a monthly income of one hundred million tomans, you may have to invest, for example, 2 billion tomans.

Job “productivity”, however, can also be calculated in other ways, based on “economic return per hour worked”. For example, to calculate how much a worker in a sports linen factory earns, we can take the number of linens that a worker produces in an hour and compare it to the number of linens that (on average) a worker in another country in Produces an hour, let’s compare.

For simplification and macro calculation, we can consider a country’s gross domestic product (GDP) and measure it against the number of working hours of all employees in that country during a year. In other words, the higher the economic production of goods and services in a country and the less workers in that country work at the same time, the higher their job productivity will be and the more they will earn for less work.

Accordingly, in 2017, Norwegian citizens earned an average of about $ 80 per hour worked, and German citizens earned about $ 70 per hour worked. Norway is a sparsely populated country with oil revenues, and it may be better to exclude this comparison, but the example of Germany shows that its citizens have, on average, the highest job productivity in the world.

Turkish citizens have about half the productivity of German citizens and in 2017, they earned about $ 44 per hour worked. By comparison, at the same time, Pakistanis earned about $ 8.2 per hour, or about one-fifth of Turkish citizens.

Why is job efficiency low in Iran?
The report does not provide exact data on Iran and Iranian citizens, but job productivity in Iran is among the lowest in the region, according to similar reports. But why does this happen?

Iran’s economy is a highly unstable one, and the impact of politics on it has almost always been negative. Extreme exchange rate fluctuations, sudden changes in laws, lack of investment security and, most importantly, the loss of “social capital” (for example, in the form of declining public confidence in governance as a whole), can all be factors in job performance in Iran. Overshadow.

However, in addition to these general causes, which are always repeated, there are also causes that are somewhat “more technical” and it can be hoped that a hearing aid will be found sooner or later to remove these obstacles. To raise.

It seems that one of the most important reasons why job productivity is low in Iran is the high “energy intensity” index in Iran. “Energy intensity” simply states how much energy is consumed to produce each unit of “gross domestic product.” A high index would actually be a measure of an economy’s inefficiency.

For example, suppose I pay 100,000 tomans a month for gas to heat my house, and you pay 50,000 tomans a month for heating your house, which is similar to mine in every way and has only better insulation. It is clear that the amount of energy lost in my house is 2 times more than your house, and in this regard, the insulation of my house is more inefficient than the insulation of your house.

According to some reports, Iran has one of the most catastrophic indicators of “energy intensity” in the world. For example, according to a 2018 report by the International Energy Agency, Iran topped the list of countries with the highest energy subsidies for the second year in a row. (In 2016, China ranked first.)

Accordingly, in 2018, Iran provided about $ 69 billion in subsidies for fossil fuels, which is an increase of about 43% compared to 2017. At the rate of 25 thousand tomans, this amount is approximately equal to 1700 “thousand billion tomans” (or 1700 trillion tomans).

According to the International Energy Agency in 2019, Iran was still ranked first, and this time, in one of the most difficult years in the history of its contemporary economy, it paid about $ 86 billion in energy subsidies. That figure alone was equivalent to about 19 percent of the world’s energy subsidies that year.

But what does “energy subsidy” really mean? Explain that the price of energy carriers (such as gasoline and diesel) in Iran is almost the cheapest in the world, and even though the income of Iranians is now much lower than the income of citizens of other countries, the solution to the problem of low income Iranians, keep low Not the price of energy.

The opposite is true. If the elected government in the 1400 presidential election tries to eliminate energy subsidies (ie make the price of gasoline and other energy carriers realistic) and at the same time “really” spend the released revenues on the country’s development, unprecedented events in Iran’s economic growth it takes place.

The amount of energy subsidies (which the rich benefit more than the poor) in Iran is so high that one should be extremely happy if the same item is included in the list of economic reforms. Thus, it may not be bad a few months before the 1400 presidential election, and at a time when the Iranian economy is going through one of its worst historical periods, to the solutions that the world’s economists have repeatedly recommended, and of course the solutions that are difficult and They are also painful, to be paid more.