Iranians struggle as war with US fuels price storm

Tehran, Iran – Saeed, a 26-year-old primary school teacher in Tehran, is looking for a better-paying job after months of war with the US and a naval blockade on Iran's ports have battered the economy.

“Look at the job postings online or in person, and you'll understand why many young people feel that working is pointless. But the cost of living doesn't disappear,” Saeed told Al Jazeera.

According to him, teachers, cashiers, and sales staff earn monthly salaries below 200 million rials (about $107 at current exchange rates), and many jobs pay even less than the basic minimum wage of around 166 million rials ($88) per month.

“Many employers don't provide insurance, make us work 12 hours a day, sometimes six days a week. They also find every excuse to deduct from salaries whenever they can, knowing you don't have many options,” Saeed said.

Saeed holds a master's degree in Persian literature but says many Iranians like him are now constantly searching for any job opportunity, regardless of their field or experience, because earning money to put food on the table is getting harder.

For a minimum-wage worker with government support, a kilogram of lamb now costs about 10% of a monthly income, while 10 kilograms of Iranian rice can take up more than one-fifth. This does not include rapidly rising housing costs, utilities, transportation, and healthcare.

When the government approved a 60% increase in the basic minimum wage at the end of the Iranian calendar year in March, the cost of a basket of essential goods for an average worker household of 3.3 people was estimated at 430 million rials ($230).

At that time, economic shocks from the US-Israeli war on Iran were spreading, along with two government internet shutdowns, including one during a nationwide protest in January that killed thousands of people. These factors only worsened Iran's chronic economic problems rooted in decades of corruption, mismanagement, and US and UN sanctions.

Millions across Iran are struggling to get by, but the economy, though severely affected, has not collapsed after more than five months of war.

The resource-rich nation of more than 92 million people has developed a relatively diversified economy compared to a major oil exporter, as successive governments over the decades have relied on self-sufficiency when facing economic embargoes and confrontation with the US, Israel, and the West.

But Iranians are directly feeling the impact of sanctions and the current war. According to the latest report by the Statistical Center of Iran published in late July, year-on-year inflation stood at about 88%.

Food inflation is above 128% year-on-year, meaning the same food basket costs about 2.28 times more than in July 2025. Among major food groups, year-on-year inflation is 261% for oils and fats; 147% for milk, cheese, and eggs; and 145% for meat and poultry.

While prices rise at a pace unseen in more than eight decades, jobs are also being lost across most industries in 2026. The youth unemployment rate was 23.4% in the spring, up 3.7 percentage points from the same period last year, the Statistical Center said.

The overall unemployment rate in the same period was 9.1%, but the labor force participation rate was only 40%, meaning most working-age people are outside the formal labor force, many in precarious, informal jobs.

Even those with assets and businesses are struggling in Iran's weakening economy. Yashar, 38, who co-owns a grocery store in Lahijan, northern Iran, with his mother, said they also own a house and a second small shop that they rent out.

“From the outside, it seems we are well-off, but it's the opposite for us, because the rent and my mother's pension only cover basic expenses, not to mention extra purchases or savings. Business at the store is very slow. We are always short of money to buy the next batch of goods,” he said.

Hardships likely to persist

President Masoud Pezeshkian said last week that the war and the US naval blockade on Iran's southern ports have raised costs for his budget-strapped government.

“We used to be able to sell oil, now we can't. They also attacked and destroyed some of our factories, so we can't collect taxes like before. We also have to spend to keep them running and keep the economy turning,” he said.

Pezeshkian's administration is also considering a significant increase in gasoline prices after a hike in December, as well as tightening monthly fuel quotas for private vehicles, but has been cautious because previous price hikes have contributed to nationwide protests.

Pezeshkian and several other senior officials have advocated a diplomatic solution with Washington, but no deal with the US is imminent, even as talks with Oman and other mediators over shipping arrangements through the Strait of Hormuz continue.

As the administration prepares for another potential round of conflict on the strategic waterway, Iranians continue to pay the heaviest price among all affected parties everywhere.

Ladan, 28, who works an office job in Tehran but also sells jewelry on Instagram for extra income, said the hustle sometimes feels futile because it doesn't offer sustainable growth prospects.

She told Al Jazeera that last week, she made only about 20 million rials (less than $11) in profit after completing more than a dozen online orders.

“I'm so tired of everything. Even though I live with my parents and don't pay rent, I still can't afford a Pride because, in the end, I earn in rials,” she said, referring to the cheapest domestic car, often called the "death car" by Iranians due to poor safety standards. The car now costs up to 10 billion rials ($5,350).