Chilean government reaches an agreement with central labor union to raise minimum wage

RIO DE JANEIRO, BRAZIL – The Chilean government reached a historic agreement with the Central Unitaria de Trabajadores (CUT), the largest labor union in the South American country, to increase the minimum wage by 14.3%, the highest readjustment in 25 years.

The announcement, known yesterday afternoon, concludes more than six years of unsuccessful relations between the CUT and previous governments.

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“In the last four years, not only was no agreement reached, but there were practically no negotiations or consultations with workers’ organizations. It seems to us that we are making an important difference, which is the recognition of the trade union world, the recognition of the CUT as the most representative organization of the workers of Chile”, said the Minister of Finance, Mario Marcel.

According to the agreement, by August of this year the minimum wage will reach US$470 per month, exceeding US$480 in the event that the 12-month inflation index exceeds 7% by December 2022.

“To the leaders (of the CUT) we thank the willingness to be able to seek a good point of agreement, both for the more than 800,000 workers who in our country are earning a minimum wage, as well as for all those allowances or subsidies that are readjusted as a result of the percentage of which the minimum wage is also readjusted,” said for her part the Minister of Labor, Jeannette Jara.

“Today we have had a great advance in the protection of rights, we have begun to build a real dialogue, today we have the opportunity to dialogue and we want to build”, indicated the union leader, detailing that they intend to “continue working not only on remunerations”, but also on “many other issues, such as pensions, tax reform, strengthening of unemployment insurance, among others”, indicated the president of the CUT, David Acuña.

The bill promoting the increase will enter Congress at the end of this week, including the salary increase, family allowances and additional benefits for the basic food basket.

These measures take place in a context of historic inflation that has hit hard the pockets of Chilean families, with an increase in the Consumer Price Index (CPI) of 9.4% in the last 12 months, which has led the Central Bank to take unprecedented measures in more than 20 years and to raise interest rates from 2.75% to 7% in less than half a year as a containment measure.