Original article: “No podemos seguir aumentando los costos laborales”: ministro del Trabajo enfría alza del salario mínimo antes de negociar con la CUT Labor Minister Cools Minimum Wage Hike Expectations Ahead of Negotiations with Labor Union «We cannot continue increasing labor costs«, stated Labor Minister Tomás Rau when discussing a potential minimum wage increase. In an interview with La Tercera, the government official was asked about the upcoming negotiation process between José Antonio Kast’s administration and the Central Unitaria de Trabajadores (CUT) aimed at addressing a wage increase. He indicated that the discussion will be «frank» and will incorporate a «dose of reality».
«We want to create more formal employment, but a minimum wage increase may impact that goal«, he asserted. To support this position, Rau pointed out that most companies employing minimum wage workers are SMEs, which, in his view, have been «losing jobs for the past 16 months». «The labor costs for small and medium enterprises have risen sharply, as minimum wage directly affects them more significantly», he noted.
In response to these arguments, the labor minister was questioned by the media on how this situation can be reconciled with the need to set a minimum wage that allows workers to escape poverty. He responded that this presents a «challenge» for the government and stated that they believe «when the economy grows, wages will grow». «We cannot only focus on the minimum wage discussion«, he expressed, while acknowledging it as an «important» debate.
Rau: «Sometimes we also need to contain those increases» In April 2023, as the country discussed raising the minimum wage to $500,000, the economist published an opinion piece titled: «Minimum Wage: Minimal Prudence», arguing that increased productivity is necessary to ensure a «sustainable wage increase». He reaffirmed these statements in the interview with La Tercera. «Labor productivity is undoubtedly important.
As workers become more productive, their wages should reflect that increase», he noted. While Rau did not disclose the proposed wage increase amount the government might suggest during negotiations with the CUT, he hinted that the increase might be limited. «Just as there have been significant increases in the minimum wage, sometimes we need to contain those increases as well», he cautioned.
«I wouldn’t want to preempt our discussions in the newspapers, because we are engaging with workers and SMEs, along with various stakeholders, but the message is clear: we cannot keep increasing labor costs beyond productivity if we want to create jobs, especially in SMEs. Without quoting an exact figure, we have to consider the rising cost of living», he concluded.