Chile's Ethical Wage
Chile's Ethical Wage Commission, after three months of deliberation, suggested to President Michelle Bachelet its recommendation setting a minimum family salary of $400-$500 a month. Chile has an extreme wage disparity between the average factory worker and executives at one is to 200.
The average gap in other European and Asian nations is just one is to 8.
President Bachelet formed the Commission upon the prodding of Rancagua Bishop Alejandro Goic,who observed increased social tension in the country. He served as mediator between state-owned copper firm Codelco and subcontracted employees on August. The current minimum wage is $280.
The commission's president, Patricio Meller, said their study was focused on three areas - workforce and labor policies, institutionalism and labor relations and social entrepreneurship. Economist Dante Contreras, a member of the commission, said, "There is a consensus that we have to modify the way that we analyze this situation; we need to give more emphasis to an overall monthly income rather than a salary per se. Specifically we are currently studying was to ensure an overall minimum family income."
Aside from studying family income in Chile, the commission will work on strengthening collective bargaining rules and unemployment benefits in the country where almost 15 percent of its labor force earn salaries below the legal minimum wage.
According to the Index of Economic Freedom's 2007 Assessment report, Chile has a high rating of 85.3 percent for labor freedom. but while its labor market operates under flexible employment regulations that enhances employment and productivity growth, non-salary cost of employing a worker is very low and dismissing redundant employees is almost costless.