By LyD (Libertad y Desarrollo, Chile)
The Chilean labor market has been deeply impacted by the pandemic and the
quarantines decreed, which has led to a combined rate of unemployment and
potential workforce (SU3) of 21.3% in the quarter January-March of this year.
Added to this substantial imbalance is that 26.7% of those employed are in
"informal employment", with consequent damage to their pension, as they get
no savings for their retirement.
In this complex scenario, the government has proposed an increase in the
minimum wage to $ 337,000 per month, which contains the cost of living
increase from September last year to date. According to Senior Economist
of LyD Tomás Flores “this readjustment is reasonable, since in the face of
such a substantial imbalance in the labor market, a greater readjustment could
generate even more unemployment and informality. The minimum wage is
usually observed in SMEs, which are probably one of the sectors most affected
by this pandemic, for which to impose a greater readjustment than the one
proposed will end up harming the same workers ”.
Libertad y Desarrollo (LyD) is a private study and research center.