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.