Despair, hardship as Iraq cuts off wages in Islamic State cities

ERBIL, Iraq (Reuters) - The Iraqi government's decision to choke off funding for Islamic State by cutting off all wages and pensions in cities controlled by the group has plunged people into hardship and could help the insurgents tighten their grip, officials and residents say.

For a year after Islamic State fighters swept through a third of Iraq, Baghdad continued to pay pensions and salaries of state employees inside the self-proclaimed caliphate.