{"id":8644,"date":"2025-10-18T22:04:01","date_gmt":"2025-10-19T05:04:01","guid":{"rendered":"https:\/\/iranreport.org\/?p=8644"},"modified":"2025-10-18T22:15:20","modified_gmt":"2025-10-19T05:15:20","slug":"sanctions-on-iran-have-hurt-the-same-middle-class-that-drives-reform","status":"publish","type":"post","link":"https:\/\/iranreport.org\/?p=8644","title":{"rendered":"How Sanctions on Iran have hurt the same middle class that drives reform"},"content":{"rendered":"\n

The Iranian middle class, long a force of political moderation, stability, economic growth, and the base of the country\u2019s reform movement, is shrinking fast under the pressure of Western sanctions, researchers say. Left in its wake are rising societal resentments and an ever-increasing wealth gap.<\/p>\n\n\n\n

A study published in the European Journal of Political Economy<\/a> has used an innovative method to investigate the true extent and damage of Western sanctions on Iran since 2012 and how they have resulted in a dwindling middle class, leaving more Iranians to struggle on low incomes as a small elite prospers.<\/p>\n\n\n\n

Resentment between the social classes is clear when speaking with Iranians, and the frustration felt by a young, highly educated population is more palpable than ever.\u202fIran\u2019s current unemployment rate is 7.4% according to the Statistical Center of Iran, while the International Monetary Fund (IMF) puts the rate at 9.2%<\/a> for 2025.<\/p>\n\n\n\n

\u201cYou can feel the difference between rich and poor more than ever; everything has become expensive, whether it\u2019s bread or chicken. Meanwhile, you see people in luxury coffee shops, luxury restaurants,\u201d said Elham, a schoolteacher in Tehran who is trying to make ends meet. Elham asked to be identified by her first name due to security concerns, as did other Iranians in the country who spoke with CNN.<\/p>\n\n\n\n

The minimum wage in Iran is approximately 104 million rials, about $110 per month. The prices of basic goods have risen, with an annual inflation rate of 42.4%, according to October figures from the IMF. In South Tehran, the price of basic household staples like rice has nearly quadrupled, according to shopkeepers and residents. Meanwhile, on the other side of the city, wealthy residents attend exclusive Pilates studios charging 17 million rials.<\/p>\n\n\n\n

The recent conflict with Israel highlighted the wealth gap. While the Israeli bombing of Iran\u2019s capital targeted both wealthy and less well-off areas of Tehran, residents with means and access to extra fuel amid a fuel shortage were able to flee the city<\/a> and even the country. One resident, Reza, 36, said: \u201cI couldn\u2019t leave Tehran, even if I wanted to. I couldn\u2019t get fuel to drive anywhere, and I can\u2019t afford the trip to Armenia or Turkey.\u201d<\/p>\n\n\n\n

\"A
A plume of heavy smoke and fire rise from an oil refinery in southern Tehran, after it was hit in an overnight Israeli strike, on June 15, 2025.\u00a0Atta Kenare\/AFP\/Getty Images<\/figcaption><\/figure>\n\n\n\n

The growing wealth gap and inequality are like a festering wound and Mohammad Reza Farzanegan, a professor of the economics of the Middle East at the University of Marburg in Germany and one of the authors of the new study, told CNN the gap could lead to deep social resentment and damage national unity in the country of around 92 million.<\/p>\n\n\n\n

While the Iranian elite continue to reap the benefits of the current system, he said, \u201cthe rest of society is left to compete for declining resources in a diminishing economy. The result is a society with increasing inequality and perception of inequality.\u201d The perception of inequality, he added, is even more dangerous to societal stability than the true inequality that exists.<\/p>\n\n\n\n

Sanctions have long been billed by the West as a humane tool in the foreign policy and diplomatic arsenal, often described by proponents as being surgical and precise, targeting governments and leaders with minimal civilian impact. However, by studying Iran, one of the most heavily sanctioned countries in the world, the researchers have found that not only have sanctions decimated the economy, they have also punished the segment of the Iranian population which has historically pushed for reforms and change, the middle class.<\/p>\n\n\n\n

Farzanegan and his co-author, Nader Habibi, a professor of economics at Brandeis University in the United States, used a synthetic control method to create a data-driven, non-sanctioned \u201ctwin\u201d of Iran and compare that twin to the real, sanctioned Iran. The results reveal the significant humanitarian, societal, and political impact of this economic tool on the general population.<\/p>\n\n\n\n

According to the study, from 2012-2019, when comparing the real Iran and the non-sanctioned \u201ctwin,\u201d researchers found that, were it not for sanctions, the Iranian middle class would have expanded by 17%. By 2019, the middle class of the real Iran was 28% smaller than it should have been, according to their modeling. A separate study<\/a> published in the book \u201cHow Sanctions Work\u201d looked at household data in Iran and estimated that roughly 9 million people lost middle-class status between 2011 and 2019.<\/p>\n\n\n

\n
\"A
A currency dealer counts Iranian rials as the value of the Iranian rial drops, in Tehran, Iran, February 9.\u00a0Majid Asgaripour\/WANA\/Reuters<\/figcaption><\/figure>\n<\/div>\n\n\n

Farzanegan believes Iran provides a unique case study. Firstly, the scale and intensity of the sanctions imposed on it are unique. While the country has faced sanctions on and off since the 1979 Islamic Revolution, when the Western-installed Shah Mohammad Reza Pahlavi was overthrown, paving the way for clerical rule, Iran was hit with the strictest sanctions in modern history in 2012 under the Obama administration. A short respite came after the signing of the nuclear deal known as the JCPOA in 2015, but Iran was once again sanctioned by President Donald Trump in 2018, through his \u201cmaximum pressure\u201d policy.<\/p>\n\n\n\n

Secondly, Iran holds a unique position among sanctioned countries due to its demographics, which includes a \u201clarge, educated and previously growing middle class,\u201d Farzanegan said. The Western sanctions, he explained, have \u201cattacked the very heart of Iran\u2019s modern social structure.\u201d<\/p>\n\n\n\n

Century in the making<\/h2>\n\n\n\n

The creation of the Iranian middle class \u2013 made up of civil servants, teachers and professionals \u2013 has been a century in the making, with efforts over the last 45 years focused on lifting poor, marginalized communities through education and opportunity.<\/p>\n\n\n\n

From the 1990s, after the Iran-Iraq war of the previous decade, the Iranian middle class saw increased growth through 2012.\u202f Beyond its role in politics, the middle class in Iran has also been a generator of entrepreneurship, giving birth to some of its most successful startups, like Snapp, Iran\u2019s answer to Uber, or Digikala, the Iranian equivalent of Amazon.\u202f But many young Iranians say they see few opportunities now.<\/p>\n\n\n

\n
\"Employees
Employees are seen in the operations room of the Snapp online taxi service on April 8, 2018 in Tehran, Iran. Snapp launched in February 2014.\u00a0Kaveh Kazemi\/Getty Images<\/figcaption><\/figure>\n<\/div>\n\n\n

\u201cI spend a lot of time wondering if I should leave, thinking about where I should go, and where I can even get a visa. I drive Snapp, and I do courier services at the moment, but it is still a struggle. I\u2019m not sure what else to do with so few jobs,\u201d\u202fsaid Ali, a 34-year-old based in Tehran.<\/p>\n\n\n\n

Ali, like many Iranians, has fallen on hard times. Educated as a computer engineer, he has struggled to find work in his field. His concerns have only grown since Israel and the United States carried out strikes in Iran in June, targeting its nuclear program, and as diplomatic efforts between the US and Iran have fizzled, entrenching sanctions further.<\/p>\n\n\n\n

The political damage from years of sanctions can already be seen within Iranian society, analysts say. \u201cSanctions have weakened independent economic actors while strengthening state-linked and security-sector players like the IRGC and bonyads,\u201d said Sina Toossi, a senior fellow at the US-based Center for International Policy think tank. The Islamic Revolutionary Guard Corps, or IRGC, is one of the most powerful branches of the Iranian military, also holding political, ideological and economic power, and bonyads are government-backed charitable trusts.<\/p>\n\n\n\n

\u201cBy channeling resources to actors who benefit from isolation, sanctions have tilted the balance toward factions built on control and confrontation, entrenching hardliner power,\u201d Toossi said.<\/p>\n\n\n

\n
\"Members
Members of the Islamic Revolutionary Guard Corps (IRGC) attend an IRGC ground forces military drill in the Aras area, East Azerbaijan province, Iran, October 17, 2022.\u00a0IRGC\/WANA\/Reuters<\/figcaption><\/figure>\n<\/div>\n\n\n

Changed face of protest<\/h2>\n\n\n\n

The middle class is historically a force of moderation and stability in Iran, bridging the gaps in society and counteracting extremes. \u201cThe middle classes have the economic security and education to advocate for civil liberties and political accountability,\u201d said Farzanegan. \u201cOur research<\/a> shows that sanctions have systematically taken this security. When people are busy with daily survival, their capacity for organized, long-term political engagement is severely diminished.\u201d<\/p>\n\n\n\n

The Iranian middle class has long been the backbone of the reform movement, and the driver of many of Iran\u2019s protest movements over the decades. It has been the base for reformist leaders like President Mohammad Khatami in 1997, President Hassan Rouhani in 2013 and now President Masoud Pezeshkian.<\/p>\n\n\n\n

With a reduced middle class, Farzanegan warns that one begins to see a small, elite group profiting off and simultaneously insulated from sanctions at the top, and, at the bottom, what he calls \u201cthe new poor\u201d \u2013 millions of Iranians pushed down the socio-economic ladder. \u201cSanctions, combined with corruption, function like Robin Hood in reverse, taking from the middle class and poor to enrich the powerful,\u201d he said.<\/p>\n\n\n\n

This doesn\u2019t fully destroy political engagement but changes it. \u201cThe political mantle has shifted from a middle-class demand for rights and reforms to a working-class cry for survival and bread,\u201d says Farzanegan.<\/p>\n\n\n

\n
\"People
People protest against increased gas prices on a highway in Tehran, Iran, on November 16, 2019.\u00a0Nazanin Tabatabaee\/WANA\/Reuters<\/figcaption><\/figure>\n<\/div>\n\n\n

This shift can be seen in working-class-led protests like the November 2019 fuel protests. While those types of protests are an important force, Farzanegan said, they are \u201cmore fragmented and focused on short-term economic grievances, making them both volatile and vulnerable to state repression.\u201d<\/p>\n\n\n\n

Another issue is that pushing people into poverty increases their reliance on government services. In Iran, this means relying on IRGC-connected social services that have themselves been hamstrung by sanctions, creating an \u201cunsustainable trap,\u201d Farzanegan said.<\/p>\n\n\n\n

Sanctions have crippled the government\u2019s primary source of revenue, oil exports, limiting the state\u2019s ability to provide for millions of impoverished Iranians through social safety nets.<\/p>\n\n\n\n

Where Iran goes from here is unclear, even as concerns of renewed conflict linger. Rebuilding a middle class, while possible, is a \u201cgenerational challenge,\u201d said Farzanegan. \u201cIt is not a switch that can be flipped back on, even if all sanctions were lifted tomorrow.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

The Iranian middle class, long a force of political moderation, stability, economic growth, and the base of the country\u2019s reform movement, is shrinking fast under the pressure of Western sanctions,<\/p>\n","protected":false},"author":3,"featured_media":8645,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_price":"","_stock":"","_tribe_ticket_header":"","_tribe_default_ticket_provider":"","_tribe_ticket_capacity":"0","_ticket_start_date":"","_ticket_end_date":"","_tribe_ticket_show_description":"","_tribe_ticket_show_not_going":false,"_tribe_ticket_use_global_stock":"","_tribe_ticket_global_stock_level":"","_global_stock_mode":"","_global_stock_cap":"","_tribe_rsvp_for_event":"","_tribe_ticket_going_count":"","_tribe_ticket_not_going_count":"","_tribe_tickets_list":"[]","_tribe_ticket_has_attendee_info_fields":false,"footnotes":""},"categories":[36,37],"tags":[20],"class_list":["post-8644","post","type-post","status-publish","format-standard","has-post-thumbnail","category-editorials","category-featured","tag-featured"],"_links":{"self":[{"href":"https:\/\/iranreport.org\/index.php?rest_route=\/wp\/v2\/posts\/8644","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/iranreport.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/iranreport.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/iranreport.org\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/iranreport.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=8644"}],"version-history":[{"count":2,"href":"https:\/\/iranreport.org\/index.php?rest_route=\/wp\/v2\/posts\/8644\/revisions"}],"predecessor-version":[{"id":8647,"href":"https:\/\/iranreport.org\/index.php?rest_route=\/wp\/v2\/posts\/8644\/revisions\/8647"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/iranreport.org\/index.php?rest_route=\/wp\/v2\/media\/8645"}],"wp:attachment":[{"href":"https:\/\/iranreport.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8644"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/iranreport.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8644"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/iranreport.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8644"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}