Unemployment Is devouring Iran while the regime continues spending billions on militias in arab countries

For years, Iran has been experiencing a complex economic crisis that has been directly reflected in the labor market and living standards, at a time when domestic criticism is increasing over the foreign spending policies adopted by the Iranian regime, particularly regarding its support for militias and armed groups allied with it in a number of Arab countries.

While broad segments of Iranians suffer from unemployment, declining employment opportunities, and rising poverty rates, the regime continues to allocate massive financial and military resources to its regional projects, creating a growing state of public anger and social tension within the country.

Iranian economic data over recent years show the extent of the pressures facing the labor market. According to data from the Statistical Center of Iran and reports issued by the World Bank and the International Monetary Fund, the official unemployment rate increased significantly during 2024 and 2025, particularly among youth, women, and university graduates.

Independent estimates indicate that youth unemployment in some Iranian provinces has exceeded 25 percent, while the rate is even higher in marginalized areas due to weak investment and an unbalanced economic structure.

The crisis is not limited to direct unemployment; it also extends to the declining quality of available jobs. High inflation, which exceeded 40 percent during certain periods according to official and international estimates, has eroded real wages and reduced the purchasing power of the middle class.

Western economic sanctions linked to Iran’s nuclear program and Tehran’s regional policies have also driven many foreign companies to leave the Iranian market or reduce their activities, affecting investment levels, production, and employment opportunities.

At the same time, the Iranian regime continues to direct substantial financial resources toward its regional support. For years, Tehran has been accused of financing and arming armed groups in Arab countries, including the Houthis in Yemen, Iraqi militias linked to the Revolutionary Guard, in addition to long-term support for Hezbollah in Lebanon and military and political support for Bashar al-Assad’s regime during the years of war.

Reports issued by Western and American research institutions confirm that Iranian spending on these regional networks has cost billions of dollars, despite the difficulty of obtaining precise figures because of the secretive nature of Iranian military and security budgets.

The Islamic Revolutionary Guard Corps is considered one of the most prominent actors in this file. Its role is not limited to military and security activities; it also possesses extensive economic influence within Iran through large companies and institutions that control the oil, construction, energy, and telecommunications sectors.

Economists believe that this influence has reduced competition and weakened the private sector, negatively affecting the investment environment and job opportunities.

Institutions linked to the Revolutionary Guard are also accused of obtaining government privileges and major contracts without transparent competition, limiting the ability of small and medium-sized enterprises to grow and create jobs.

Public criticism of these policies is increasing inside Iran, particularly with the recurrence of living crises. In many of the protests that have taken place across the country since 2017, demonstrators have raised slogans rejecting foreign spending and demanding that funds be directed toward domestic needs in Iran.

Chants such as “Neither Gaza nor Lebanon, my life for Iran” have emerged as a direct indication of the dissatisfaction of a segment of Iranians with the priority given to regional policies over local economic conditions.

Several Iranian cities have also witnessed protests by workers, employees, and retirees over delayed salaries, rising prices, and the deterioration of basic services.

Experts emphasize that the current crisis is not caused solely by external sanctions, despite their significant impact, but is also linked to the structure of the Iranian economy itself. Iran relies heavily on oil and gas revenues, while the industrial and agricultural sectors suffer from weak productivity and a lack of investment and modern technology.

Administrative and financial corruption has also led to the waste of billions of dollars and a decline in confidence in economic institutions, according to Iranian oversight reports.

Among the most prominent manifestations of the economic crisis is the emigration of Iranian talent abroad. Recent years have witnessed a noticeable increase in the emigration rates of doctors, engineers, and university graduates seeking better opportunities in Europe, Canada, and the Gulf countries.

Iranian media describe this phenomenon as a “brain drain,” especially since Iran invests in higher education but loses a significant portion of its skilled workforce because of the weakness of the labor market and low salaries compared with inflation rates.

Iranian women also face compounded challenges in the labor market. Women’s economic participation rates remain low compared with the global average due to social and economic restrictions and limited employment opportunities.

Official data indicate that a large proportion of university graduates in Iran are women, but their opportunities for integration into the labor market are not commensurate with this educational level, increasing rates of disguised unemployment and economic dependence on the family.

Future projections indicate that the Iranian labor market will remain under significant pressure unless deep economic reforms are implemented, including reducing the dominance of military institutions over the economy, improving the investment environment, and easing external tensions that contribute to the continuation of sanctions.

Analysts also believe that any real improvement in employment rates requires redirecting part of government spending toward domestic development, infrastructure, and support for the private sector rather than expanding costly regional involvement.

Against this backdrop, Iran appears to face a complex equation that combines internal economic pressures with external geopolitical ambitions. The continuation of unemployment, the decline in job opportunities, and the widening social gap may intensify public discontent, particularly among young people who represent a large proportion of the population.

While the regime continues to defend its regional priorities as a strategic necessity, a broad segment of Iranians is calling for a reordering of economic priorities and the directing of resources toward addressing the worsening living crises inside the country.