Chile's President Gabriel Boric Font Monday signed into law a minimum wage hike so that no one is left behind.
While announcing the measure, Boric said his government was deeply committed to promoting decent work and stressed the need for no one to be left behind, after enacting the largest minimum wage increase in 23 years.
It is always said that we may disagree in some ways and have complex debates, but when we agree we get the best out of ourselves, Boric also pointed out about last week's unanimous approval of the wage bill in both Houses of Congress.
”What we are promoting is not against anyone, they are agreements that are for the benefit of all the citizens of our country (...) We are building on the basis of what those who came before us did. We would not be able to talk about increasing the minimum wage to CLP 400,000 (US$ 480) if it were not for the efforts made before, he added.
We have a large and important social fracture in Chile, which we are going to face with more dignity for the inhabitants of our homeland,” Boric also pledged.
The pay increase was the result of a historic agreement between the Executive and the Central Unitaria de Trabajadores (CUT), the country's largest labor union.
According to press reports, Chile now has one of the highest minimum salaries in Latin America, although still far behind the main OECD member countries.
The new measure provides for an increase up to CLP 380,000 (US$ 440) until Aug. 1 and up to CLP 400,000 thereafter.
Finance Minister Mario Marcel explained that the bill will benefit one million Chilean workers. It also provides for a subsidy to Small and Medium Enterprises (SMEs) to cope with the minimum wage increase above inflation which is projected to reach 7% by the end of the year. The minimum monthly income will once again rise to CLP 410,000 (US$492) from January next year.
After a historic GDP rebound of 11.7 % in 2021, the largest expansion in four decades, the Chilean economy is showing signs of cooling and is recording inflation levels not seen since the 1990s.
In March, inflation registered a yoy increase of 9.4%, a situation that has led the Central Bank to raise benchmark interest rates as a containment measure from 2.75% to 7% in less than a semester, which had not been the case since over 20 years ago.