Minimum wage agreement with workers: bill proposes to bring forward CLP $500,000 minimum wage entering into effect
The increase would be gradual, and has been achieved thanks to talks between the government and workers, represented by the CUT. The agreement will now be debated in Parliament.
Chilean workers received good news today, as the government reached an agreement to bring forward the gradual increase in the minimum wage to $500,000 Chilean pesos (US$629) by next year. If the measure is approved, another of the commitments of President Gabriel Boric’s government program would be fulfilled.
Negotiations were led by Treasury Minister Mario Marcel and Labor Minister Jeannette Jara. Workers were represented by the board of the Central Unitaria de Trabajadores (Chile’s Trade Union Confederation, CUT), headed by David Acuña. The parties established a gradual increase in the minimum wage, which would reach $500,000 pesos by July of next year.
The proposal will be sent to Congress to be debated by parliamentarians. It establishes the following schedule to increase the minimum wage:
- $440,000 pesos (US$553) by May 1, 2023
- $460,000 pesos (US$578) by September 1, 2023
- $500,000 pesos (US$629) by July 1, 2024
In addition to the above, in the event that the accumulated consumer price index for 2023 exceeds 6%, an increase of $10,000 pesos (US$12.50) will be made to the minimum wage on January 1, 2024, bringing it to $470,000 pesos (US$591) on that date.
In any case, an automatic readjustment to the monthly minimum wage will be made on January 1, 2025, as a percentage of the consumer price index between July and December 2024.
Dialogue
Minister Jara praised the agreement reached with the CUT and stated, “one of the commitments of President Gabriel Boric’s government program was to establish a minimum wage of $500,000 during his term in office. And what we have done today is to bring forward fulfilling that commitment by one year. For what reason? As we know, we a living through a time of significant economic adjustment, with high inflation rates, and workers are having to directly bear the loss of purchasing power during this period.”
Minister Marcel highlighted the desire for dialogue and the search for agreement during negotiations with the CUT: “This disposition is something that we miss a lot in this country, and many other stakeholders with whom we interact, in this case the workers, are setting an example. When that will exists, the government is also willing to make the effort, which has been shown with this agreement.”