The government of Chili reached an agreement with the Unitary Central of Workers (CUT) to increase by 12.5% the minimum salary and announced a program to help 1.5 million households to alleviate the increase in the cost of food.
The aid program, which will help subsidize the basic food basket for a set of 80 products, will have a fiscal cost of 850 million dollars, Finance Minister Mario Marcel said on Tuesday.
It will be a direct aid to 1.5 million of the poorest households to help offset the cost of basic food basketwhich in the last 12 months rose 14 percent.
The amount, which will initially be delivered until December, will be readjusted according to the increase in the basic basket.
The agreement reached with the CUT, the largest multi-union in the country, to increase salary minimum to 400,000 Chilean pesos (470 dollars) from the current 350,000 pesos as of August, which represents an increase of 12.5 percent. The agreement must still be ratified by Congress.
“We are combining measures that are immediate, such as this increase in the minimum income and compensation for the increase in the cost of living, with structural reforms,” explained Marcel, in an interview with Duna radio.
Regarding the increase in the minimum wage, the minister stated: “It is not a very radical change for employers, but it is important for workers.”
Last week, Congress rejected two bills that stipulated a new early withdrawal of pension funds after the three approved so far to deal with the economic crisis derived from the Covid-19 pandemic.
The withdrawals, together with the direct aid provided by the previous administration of the conservative Sebastián Piñera, who on March 11 handed over power to the leftist Gabriel Boric, contributed to increasing inflation in Chile, which in March accumulated an annual increase of 9.4 percent.
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