Congress endorsed the gradual increase in minimum wage in Chile, this proposal has the goal of reaching 500,000 Chilean pesos (equivalent to approximately 623 dollars at the current exchange rate) by July of next year. He minimum salary in Chile it is among the highest in Latin America, it is still below the main member countries of the Organization for Economic Cooperation and Development (OECD). In addition, the implementation of a subsidy aimed at micro, small and medium-sized companies is contemplated.
“This project expanded benefits, fulfilled the commitments we signed and added an extension of benefits to SMEs”, Mario Marcel, the Finance Minister, told the media after the vote. Meanwhile, Jeannette Jara, Minister of Labor, added that during the processing of the proposal “the vast majority of the doubts that had arisen were clarified”.
Minimum wage in Chile: how much did it increase?
Similar to the previous increase, it is established that an additional 10,000 pesos (equivalent to 12 dollars) will be added to the minimum wage, reaching a total of 500,000 pesos in January 2024, if accumulated inflation in 12 months exceeds 6%. This represents the second increase in the minimum wage promoted by the Chilean Government, after an initial increase of 14.3% in May 2022, being the most significant adjustment in 25 years.
New salary: how much is the minimum wage in Chile?
The legislative proposal seeks to progressively increase the current minimum wage from 410,000 pesos (approximately $511 at current exchange rates) to 440,000 pesos ($548) by May 2023, then to 460,000 pesos ($574) in September 2023 and, finally, reaching 500,000 Chilean pesos (623 dollars) on July 1, 2024.
- Current minimum salary: $410,000
- May 1, 2023: $440,000
- September 1, 2023: $460,000
- January 1, 2023: $470,000 (only if annual inflation for this year 2023 exceeds 6%)
- July 1, 2024: $500,000
New minimum wage in Chile: when would it come into force?
The legislative proposal seeks to progressively increase the current minimum wage from 410,000 pesos (approximately $511 at current exchange rates) to 440,000 pesos ($548) by May 2023, then to 460,000 pesos ($574) in September 2023 and, finally, reaching 500,000 Chilean pesos (623 dollars) on July 1, 2024.
For how many basic baskets would the new minimum wage in Chile reach?
Taking into account that in April the monthly cost of the basic food basket amounted to $64,031 per person, with the new minimum wage of 440,000 pesos (equivalent to $548 dollars) as of May, it will be possible to cover approximately seven times the value of the food basket per person.