Chile’s Congress on Monday approved a bill to gradually adjust the national minimum wage to 500,000 Chilean pesos, or USD 623 at the current exchange rate. The monthly minimum wage currently in place since January for workers aged from 18 to 65 is nearly USD 508.
The gradual increase will be enforced by July 2024. This is the second minimum wage boost signed off on by the Chilean government since May 2022, when it was increased by 14.3 percent, the largest raise in 25 years.
According to the government, the measure also includes “specific economic support for micro, small and medium-sized companies” in the form of subsidies. Speaking to the press, Finance Minister Mario Marcel said the bill “expands benefits, fulfills government commitments and extends the benefits to companies.”
The bill for the minimum wage hike had struggled to reach final approval this week, having gone through week-long debates. The opposition and business owners notably criticized the fact that companies would have to fund another significant raise for their staff.
With that issue apparently resolved, the new law now sets the stage for retroactively increasing the minimum wage to 440,000 pesos (USD 545) this month, before raising it to 460,000 pesos (USD 570) by September and ultimately to 500,000 just over a year from now. Additional increments are also planned in case inflation exceeds 6 percent this year, still below recent Central Bank projections.
Gabriel Boric’s unpopular government sent the measure to Congress back in April after negotiating with Chile’s major unions. Under fire, Mr. Boric’s administration had to compromise with the opposition and modify the text until “the vast majority of doubts were clarified,” according to Labor Minister Jeannette Jara.
Regardless of the changes the bill faced along the way, its approval is considered a political victory for the left-wing head of state. The embattled Mr. Boric faced another setback recently after the right-wing opposition crushed his leftist allies in a recent vote regarding Chile’s second attempt to write a new Constitution.
Acabo de aterrizar en Brasil para participar en reunión Sudamericana de Presidentes con mucha alegría por aprobación del #SueldoMínimo. Con aumento histórico a 500 mil pesos y acuerdo transversal con MiPymes y cooperativas, avanzamos en mejor calidad de vida para todas y todos.
— Gabriel Boric Font (@GabrielBoric) May 30, 2023
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