Chile - Working conditions

In 1998 the Chilean workforce amounted to 5.8 million individuals. Unemployment has been rising in Chile, from 6.2 percent in 1993 to 7.5 percent in 1997. In 1998, Chile faced its first recession in 20 years. Unemployment increased in certain cities such as Valparaiso, where the local unemployment rate was 13 percent, and Santiago, where it was estimated at 14.4 percent. However, the

Household Consumption in PPP Terms
Country All food Clothing and footwear Fuel and power a Health care b Education b Transport & Communications Other
Chile 17 10 24 20 15 6 9
United States 13 9 9 4 6 8 51
Brazil 22 13 18 15 34 4 -6
Argentina 30 9 17 15 15 5 9
Data represent percentage of consumption in PPP terms.
a Excludes energy used for transport.
b Includes government and private expenditures.
SOURCE: World Bank. World Development Indicators 2000.

economy was expected to recover in the upcoming years leading to a decline in unemployment rates.

Chile is relatively developed in its labor laws compared to other Latin American countries. Workers are not required to request authorization to join or form a union. Approximately 12 percent of the workforce belongs to a union. Legislation passed in 1995 gave government employees many of the same rights as union members, with the exception that they may not legally strike. Reforms made to the labor code in 1990 helped to facilitate workers' right to strike.

Under the Pinochet dictatorship, labor unions were severely limited to the point of futility. Immediately after the coup that brought Pinochet to power in 1973, labor institutions were dismantled. The structural reforms the new regime wanted to implement had severe negative ramifications for the working class. In order for the government to continue with its economic changes, working conditions such as wages were once again regulated, and the ability to strike had to be allowed.

Forced labor is prohibited under the constitution and the labor code, and is not prevalent in the country. Child labor laws are codified, setting the minimum age to work at 14, with the permission of the child's parents or guardians. However, child labor is restricted to certain types of labor and is most prevalent in the informal economy, since this area is more difficult to regulate. The Chilean government estimates that approximately 50,000 children between the ages of 6 and 14 work. Such labor is concentrated in the countryside or with the children's parents.

According to the U.S. Department of State, minimum wages, hours of work, and occupational safety and health standards are regulated by law, with the legal work week set at 48 hours. The minimum wage is currently around US$190 per month and is set by the government, management, and unions. If representatives from these groups cannot come to an agreement, the government decides. Family subsidies are provided for workers in the lower income category. Overall, wages have risen steadily over the last several years. Moreover, poverty rates have declined in recent years from 46 percent of the population in 1987 to 21.7 percent in 1998. Currently, 11 percent of salaried workers earn the minimum wage.

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