Chile reaches agreement with worker group to raise minimum wage

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FILE PHOTO: A worker cuts a metal structure for arrangements inside of the national congress in Valparaiso city, Chile

SANTIAGO (Reuters) – Chile’s government announced Monday night that it has reached an agreement with the Workers’ United Center of Chile (CUT) to raise the minimum wage in two steps this year.

The current monthly minimum wage stands at 350,000 pesos ($413), and the agreement bumps it to 380,000 pesos ($448)starting May 1, and 400,000 pesos ($472) starting Aug. 1.

The agreement includes a special clause to raise the minimum wage to 410,000 pesos in January 2023 if the 12-month inflation rate in December exceeds 7%.

Like many countries around the world and in the region, Chile has been dealing with soaring prices, posting in March its highest monthly inflation rate since 1993.

In a news release, the government said the 14.3% hike in minimum wage was the largest in 25 years. The plan also includes subsidies and benefits for basic food items to help mitigate the effect of inflation on poorer families.

“We thank the leaders (of CUT) for their willingness to find a good point of agreement,” said Labor Minister Jeannette Jara, adding that the agreement not only helps the country’s 800,000 minimum wage workers, but also those who rely on basic basket subsidies.

The proposal will go to congress later in the week. Legislators recently voted down dueling proposals, including one from President Gabriel Boric’s government, for early pension withdrawal to help workers battling inflation and economic fallout from the COVID-19 pandemic.

The agreement said it would also establish an official group to start negotiating and designing a way to reduce Chile’s workweek from 48 hours to 40 hours.

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“We’ve made great progress today in the protection of rights, we’ve started building a real dialogue,” said CUT president David Acuna.


(Reporting by Fabian Andres Cambero and Alexander Villegas; Editing by Tomasz Janowski)

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