Chilean Parliament approves minimum wage increase;

The Chilean Parliament approved this Monday (29) the project that gradually readjusts the monthly minimum wage up to 500,000 Chilean pesos and that includes a subsidy for micro, small and medium-sized companies (SMEs).

The result comes after Gabriel Boric, the current president of Chile, was defeated in the election of the committee that will draft a new constitution for the country.

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“This project has expanded benefits, fulfilled the commitments we signed and added an extension of benefits to SMEs”, said Minister of Finance, Mario Marcel.

The Minister of Labor, Jeannette Jara, added that during the course of the initiative “the vast majority of doubts that arose were clarified”.

APPROVED | Close to a million workers and workers will be benefited. Chamber of Deputies and Deputies approves and issues into law the progressive increase in the minimum wage to $500,000 pesos. pic.twitter.com/iBZCT9W11h

— PIENSAPRENSA 327 thousand Followers (@PiensaPrensa) May 29, 2023

The proposal was sent to Congress by the government of Gabriel Boric last April, after an agreement with the Central Única dos Trabalhadores (CUT), the country’s main union.

The readjustment was approved in the Chamber of Deputies after several weeks of intense negotiations between the Executive, the opposition and the business community.

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The new legislation establishes a gradual increase in the minimum wage from 410 thousand pesos to 440 thousand until May 2023, then to 460 thousand in September 2023 and finally to 500 thousand – about US$ 623 dollars – from 1 July 2024.

This is the second increase in the minimum wage achieved by the Chilean Executive, after a 14.3% readjustment in May 2022, the highest in 25 years.

Chile has one of the highest minimum wages in Latin America, however, it is far from the main member countries of the Organization for Economic Cooperation and Development (OECD).