CLP $500.000 minimum wage

What would be the short-term consequences of implementing this policy, and the long-term consequences.

I’ve read, and seen that the consequences would be catastrophic. But, is there data that shows this as being good for Chile?

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Boric’s ancestral land of Croatia has GDP PPP per capita at $28,504, while Chile has it at $25,068 according to the World Bank. Croatia has its minimum wage at $631 and Chilean 500 lucas will be around $570 with the current exchange rate. So, nothing unachievable, especially considering that the raise won’t be instant.

Not raising it would be even more catastrophic because how can you pay rent with the current one? This data is from early 2020, before all the inflation we’ve had (I’m aware that one can rent a room, but it won’t be cheap either):

I do not have any data exactly such as this table, but just thinking outside the box:

Minimum education, minimum skill set, minimum creativity deserve a minimum wage. I suppose I fail to see the concept of rewarding this group with 10-30% increases for literally doing, nothing, while the 40hr+ worker is fighting for 2%+ at best for cost of living adjustments. Creating value within a capitalistic society has not happened, ever, by just giving free money.

(on the flip side, CEOs rewarding themselves with $20-50 million “bonuses” has not worked, ever, either)

People need to get off TikTok and perhaps watch a YouTube video or two and learn something, verses idiotic puppy videos or bum fights.

Its an easy mistake to make. We tend to think of things like europe or north am. Zillions of singles living more or less alone as far as the eye can see in a single apartment or house.

But then there is south america where that hardly ever happens. Nope instead its multiple people/family/extended family sharing a dwelling
That is not solely because the minimum wage is a little higher or lower.

Its becasue people can and do and its what everyone does and family support proximity is normal. Give a millenial a few for lucas and I guarantee you they will not be moving into an apartment or house to live alone. Lets be honest

So the key to total failure is to look longingly at finland or Denmark and then notice there is a higher mininim wage and then blindly while taking a bong hit of hopium cherrt pick something there and cram it down the throats here cause its symbolic or something

The Balkans aren’t quite “Europe” people usually think of, it’s much closer to Latin America when it comes to extended families. Here’s a proof:

I have very few Chilean millennial friends who are still living with their families, after all people who are in relationships prefer to avoid living with their parents.

Interesting observation. All my millenial Chilean family members seem to have this clingy need for their direct and extended family members to be nearby in some way. They seem to feel abandoned and depressed if they spend the entire weekend alone. Pure economics and statistics without cultural context is an error.

Its not parents specifically. Its family. There is a big difference and it even hard for people not raised from the cradle within that culture to fathom its far reach. Its the brothers sisters nieces/nephews, baby mamas, baby mamas brother, cousins grandparents ad infinitum

This continent likes to aggregate when it comes to living situations and i would say it doesnt have anything to do with whether the minimum wage is 350k or 500k or insert any number.

It is this way becasue of the value of family even tenuous distant relations and is a symptom of a family oriented culture (which is a great thing per hlf and myself) and one of the few things i still can boast of with regards to chile

Its not the Balkans that north and south american countries pine away to emulate. Its scandinavia/western europe. Specifically mentioned finland and denmark in the last post which do show above its a land of lone dwellers.
I understand you are focused on “living with parents” but that is a totally different symptom of a different cause and does not correlate to south american extended family living situations aggregating together by choice

Maybe, but my original reply was about the 500k wage not being a big deal because it’s already a reality in a country that is somewhat similar economically and culturally.

I guess the point was that mandating this increase is a solution in search of a problem. We are told the problem is " well shucks how are we to ever expect 1 lone person to pay rent to live alone unless we increase the min wage?"

So this is done and small businesses get crushed. Hiring less people or just giving up. More unemployment. Already they are dealing with strategic pregnancies.

Buh but why isnt everyone going out to live alone?

This will be increasingly difficult even if many young ones do want to with higher interest rates and the banks slamming the breaks on loans.

The rent is only the part, have you seen the food prices lately? The 300k/month salary was okay in 2017, but not anymore.

As a self-employed who occasionally hire people, I believe that if a small business can’t pay a living wage to its workers, it should not exist. Fortunately, the government promised to subsidize those ones, so they can continue being unsustainable.

Well, it make not sense think in terms of nominal figures, CLP $500.000, 1.000.000 or higher minimun wage may be either lots of money or nothing, depending on purchasing power of the CLP $ at the moment to spend. By the way in Venezuela minimun wage is around 10 MILLION bolivares, equals to some USD 3.54

People pay lot of attention to nominal figures, ignoring that every massive raising in wages will automatically decrease the purchasing power of the wage. Not to mention other side effects as lost of profits, business closing, lost of jobs, lost of fiscal income from taxes, etc. There are a huge experience on this.

The lost of purchasing power is not instantaneous and there are a tiny window of oportunity to invest those sweet money before lost the value, but in the medium term and for most of people this will imply severe damage to finance of most of people, specially those who are not economically educated, that is almost everyone.

We had the same experience in Chile in 1971, very few clever people was able to take some advantage of the circunstances, but most of people lost it all in less than two years

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Do you really believe that? Have you really thought about it?

  1. You don’t “deserve” to be in business regardless of what you pay. You earn and re-earn the privilege of being in business every day by succeeding in the market.

  2. Someone, Anyones labor has a market value based on their skills and knowledge.
    What happens to the “market” when there are demands that workers deserve more than their actual market value to a business employing them

  3. Unless you are rich then you don’t deserve to run a business? And no one deserves a wage that someone else deems too small? Either living wage or nothing?
    This seems incredibly anti-poor
    I say “rich” which is as entirely vague and a moving target as “living wage” because unless a business is actually “rich” how could they pay 1 let alone 1000 employees more money than their actual legit market value?

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No. Raising it would be catastrophic.

In your home country, in the USSR times especially, there were millions, literally millions of people sitting on their guaranteed minimum wage, doing NOTHING, absolutely, and it was soooo convenient for them, do you really believe that current Chilean culture differs considerably in this respect? We may ask any of the forum long-timers about their experience.

I didn’t use the word “deserve,” and I do not think there’s a “legit market value” for employees. The salary is determined by how much an employer can underprice workers to extract more surplus value from their labor. For me, the only ethical mode of running a business is a cooperative.

But sorry, I’m not ready for a discussion on that topic because I’ll need hours to explain my views. All I can say is that I arrived to Chile as a liberal and market believer, but then what happened in 2019 here and then in 2020 worldwide made me read a lot of history, and now I’m staunch anti-capitalist. The current economic system has not only produced much more death and misery than even the worst socialist experiments, but also led us to the unfolding ecological collapse that will make the 20th century look like a pleasant time to live. I still welcome minor socially-oriented improvements like a better minimum wage, but for me the economics is mostly post facto justifications of the existing system of wealth extraction.

Ah, yeah, the famous “culture” argument where Chileans always has it worse than ascended expats who brought their magnificent protestant work ethic or whatever. Apparently, the nations of the USSR had the “culture” problem too. :sweat_smile:

Sounds like in your opinion, all those uncultured foreigners need a threat of starvation and homelessness to make them work. In my opinion, even if “millions did nothing” on the guaranteed wage, hundreds of millions worked hard, and I still benefitted from what they had previously built when I was growing up in the capitalist hellscape of the 90s.

The planned, staged, and then performed terribly quickly destructive drama of the 90th was not purely “capitalist: vs. socialist” thing.

Just fix this planet population mind and hard-wire into their brain the basic understanding of the catastrophic consequences of the overpopulation, extensive greed, and over-consumption. This would be the proper solution. Again, not purely “capitalist: vs. socialist” thing.

It’s absolutely “capitalism vs socialism”, some people (me included) may not like the authoritarian and centralized aspects of the Soviet Marxist-Leninist brand of socialism, but:

In the survey, 66 percent of Russians said they regretted the Soviet break-up, a level not seen since 2005

In Armenia, 12% of respondents said the USSR collapse did good, while 66% said it did harm. In Kyrgyzstan, 16% of respondents said the collapse of the USSR did good, while 61% said it did harm.

In another thread I posted population pyramids for various countries, here’s what the typical post-Soviet one looks like because, along with the abysmal birth rates, millions prematurely died in the 90s due to the neoliberal shock doctrine:

Overpopulation is a minor problem compared to over-consumption (and the underlying greed, yes). One Westerner consumes and pollutes like dozens of Africans. China at least produces stuff for the rest of the world, but the modern rich countries just create emissions:

Now excuse me, I’m back to my tareas. I don’t care if it will be the minimum wage or something else, but Chile has to do something to fix this one as soon as possible:

This sounds much like what the Spaniards did. Raised the minimum wage on a stagnant economy while experiencing high unemployment. And of course that did not work as promised(it never does). On the plus side the demand for cheaper labour from Africa skyrocketed as did unapproved entry into the country. I suspect a similar event will take place in Chile but on a much larger scale than what Chile is used too. Chile has long overvalued it’s minimum wage compared to the countries around it, like a contest of sorts, and this action has frequently returned to haunt. This type of reoccurring failure is useful though, because it allows economists access to real world data for new research documents, hence additional job security for said economists. That, in my opinion, is the greatest advantage of this path.