A teacher still has a classroom. An office worker still receives a paycheck. A merchant still opens his shop. Yet all three can lose their place in Iran’s middle class without becoming unemployed. Their earnings no longer buy the life their work once supported.
That is the political significance of Iran’s economic crisis. Inflation is undermining the expectation that work, education, and personal responsibility can provide a secure future. For a government already confronting public anger, the collapse of that expectation widens the potential constituency for opposition.
When protests began in Iran’s bazaars in late December 2025, merchants faced rising prices, a falling currency, and dwindling sales. But the unrest spread beyond the marketplace, reflecting the predicament of families who remain employed while losing their economic footing. That pressure has since intensified: on Oct. 4, the rial plunged to an all-time low of 2.723 million to the dollar on the open market, further eroding household purchasing power and savings.
Iranian publications operating under the Islamic Republic’s restrictions document that decline. Rouydad 24 described the erosion of citizens’ assets through inflation and money creation as “systematic theft.” For households paid in rials, depreciation consumes savings intended for rent, medical care, and children’s education.
Food prices make the damage tangible. According to the business newspaper Donyaye Eghtesad, vegetable oil prices rose 431% in a year and egg prices 342%. Bread prices increased roughly 140% over the 12 months ending in late June 2026. Families can postpone buying furniture. They cannot indefinitely postpone buying bread.
The same newspaper reported that essential food for a family of four cost 71.5% of the minimum wage in May 2026. The food basket had risen nearly 145%, while the minimum wage increased about 60%. Although these figures concern minimum-wage earners, they expose the mechanism driving downward mobility: even a substantial pay raise can leave a family poorer.
Housing compounds the squeeze. Tose’e Irani reported cases in which rent consumed as much as 70% of a working couple’s combined income. Two paychecks no longer guarantee security. After food and housing, a medical bill or educational expense can become a financial crisis.
Shargh described salaried employees buying half a flatbread and families purchasing fruit one piece at a time. The diploma remains on the wall. The job title remains unchanged. The financial protection attached to both disappears.
Tose’e Irani estimates that 30% of the middle class fell below the poverty line over two decades. The political concern extends beyond any single estimate: people who built their lives around gradual advancement increasingly struggle to preserve what they already had.
Reports about Iran’s financial resources sharpen the question of accountability. In 2024, Etemad cited a university study estimating annual capital outflows at $30 billion to $80 billion. Separately, lawmaker Hossein Samsami said $95 billion of $270 billion in non-oil export proceeds recorded from 2018 through the first four months of the Iranian year beginning in March 2025 had not returned to the country. These measures cannot be added together, but both deepen public questions about the management of national resources.
Hardship does not automatically produce an uprising. Some Iranians take second jobs, reduce consumption, or emigrate. But prolonged decline can bring merchants, teachers, workers, office employees, and retirees toward a common conclusion: the existing order offers no credible path to security.
This discontent is unfolding alongside sustained efforts to organize resistance. Mojahedin-e-Khalq’s Resistance Units have stepped up their operations, carrying out close to 70 across Iran in just three weeks. Their activity adds an organizational dimension to the crisis: networks seeking to challenge the authorities’ hold on society and encourage continued defiance despite repression. The potential convergence of widening economic grievances and organized opposition deserves serious attention.
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American policymakers should therefore assess Iran’s domestic stability beyond the government’s ability to clear streets. Force can interrupt a demonstration. It cannot restore the value of a paycheck, recover a family’s savings, or rebuild confidence in a future that keeps slipping away.
Iran’s shrinking middle class is becoming a political threat because it encompasses people who continue to work and sacrifice while finding fewer reasons to believe the system governing them can deliver a tolerable future. Repression may contain their anger for a time. It cannot resolve the conditions producing it.
Dr. Majid Rafizadeh is a Harvard University-educated political scientist and writer.