Arbil (Iraq) (AFP) - When the car pulled up to the curb in Iraq's Arbil, a half-dozen Iranian labourers swarmed around it. Squeezed by US sanctions on Tehran, they were hunting for work across the border.

Mostly Kurds themselves, they have sought day jobs in construction and other menial labour in Iraq's northern Kurdish region to make up for the deteriorating economic situation at home.

Wearing mesh hats and canvas bags around their waists, they wait in Arbil's industrial quarters to be picked up by people needing help with removals or construction foremen looking for labourers.

"With a full day's wage in Iran, I can only buy a chicken -- but a family's need is more than just a chicken," said Rostam, 31, a worker from Iran's Urmia.

The father of two preferred not to reveal his full name, fearful of repercussions against family back home.

Labourers can earn "between 25,000 to 30,000 Iraqi dinars ($20-$25) each day", piped in worker Riza Rostumy, about three times the rate in Iran.

"It's good money," said Rostumy.

And it can go a long way back in Iran, where prices of food and other goods can be sent into a tailspin by bellicose statements from Tehran or Washington.

"The economy is very unpredictable. You might wake up one morning and find food prices have doubled compared to the previous day," said Rostam.

The US last year reimposed crippling sanctions on Iran's energy and financial sectors, seeking to force Tehran back to the negotiating table over nuclear ambitions.

The measures have sparked a currency crisis and runaway inflation, officially topping 52 percent.

- Trickling in -

Most Iranian labourers cross the border into Iraqi Kurdistan as tourists with a one-month visa.

They work for 28 days then return home for a break, ferrying tea, diapers and other commercial goods now too expensive in Iran. After a week, the cycle begins again.

The workers are both "filling a need, and seen as a source of wealth", said Adel Bakawan of the School for Advanced Studies in the Social Sciences (EHESS) in Paris.

"Not only are they doing jobs culturally and socially looked down upon in Kurdish Iraqi society, but Iranian labourers are spending," Bakawan told AFP.

Down the same bustling Arbil motorway, a Kurdish Iraqi businessman has refurbished an old building into a cheap hostel to accommodate the waves of Iranian day labourers.

"Last autumn, I had only 58 Iranian workers in the hostel. Now I have 180," said 54-year-old Khorsheed Shaqlawayee.

He has rented two additional buildings nearby, but even that has not been enough.

"Now I'm turning new guests away, all of whom are Iranians, because the three hostels are full," said Khorsheed.

His rooms measure about nine square metres (almost 100 square feet) and host up to four workers, who pay $3 a night for a bed, electricity, water and internet.

Most Iranian workers in Arbil were eager to speak to AFP but on condition of anonymity, worried there could be negative repercussions on their families in Iran.

Among them were university graduates pushed into menial labour because they could not find jobs back home and pessimistic about their future prospects.

"I think the economic situation will get worse in Iran," said one 24-year-old.

- 'Emigration for food' -

Kurdish regional authorities in northern Iraq said they do not keep statistics on Iranian labourers, and Iraqis said the influx hasn't worried them yet.

"They charge the same price as us. Besides, unlike Iranian workers, we have better connections. We work regularly with engineers and project owners," said builder Rebin Siamand, 27.

But if Iranians began coming in larger numbers or charging less, that could become a burden for Iraqis, Siamand warned.

On a dusty road leading into the rural outskirts, Suleiman Taha sat on the tailgate of his blue Nissan pickup, assembled in Iran with an Iranian plate.

The 28-year-old maths graduate from Iran's western Sanandaj has been coming to Iraq since February to sell handmade gypsum animal sculptures.

Iranians, he said, are focused on putting food on the table and unable to plan for much else.

"Before the recent sanctions, we used to eat meat three times a week. Now we can afford eating meat only once a week," said Taha.

He was looking to rent a home in Arbil as many of his friends and relatives were considering crossing the border for work.

"I call this an emigration, an emigration to provide food for our families back home," said Taha.