Courtney Kingston spoke briefly about changing labor policies under Michelle Bachelet, President of Chile since March 2014. Specifically, Kingston said that while she views the new pro-labor practices as good for employees, they are hard on small business owners such as herself.
During her time in office, Bachelet “has sought to introduce a number of reforms aimed at reducing income inequality” (WSJ), for which the Organization for Economic Cooperation and Development ranked Chile the worst of the 34 countries they follow. These reforms include an overhaul of the tax system that increased corporate rates and improved bargaining power for unions. Approximately 14% of Chile’s workforce is unionized.
According to Stratfor, “economic growth in Chile, a leading producer and exporter of copper, is declining because of the drop in global commodity prices over the past few years. The slowdown has hobbled the Chilean government’s attempts to pass labor reforms.” This drop in copper prices is due to a decreased demand from China.
While it is too soon to tell how effective the reforms are, there has been a downtick in the unemployment rate under Bachelet from 6.7% in August 2014 to 5.8% in December 2015.
During our trip, I’ll be curious to hear how these reforms have impacted the companies we’re meeting with.
http://www.tradingeconomics.com/chile/unemployment-rate
http://www.wsj.com/articles/chiles-bachelet-seeks-union-friendly-labor-laws-1419881735
https://www.stratfor.com/analysis/chile-slowing-growth-compromises-labor-reform
During her time in office, Bachelet “has sought to introduce a number of reforms aimed at reducing income inequality” (WSJ), for which the Organization for Economic Cooperation and Development ranked Chile the worst of the 34 countries they follow. These reforms include an overhaul of the tax system that increased corporate rates and improved bargaining power for unions. Approximately 14% of Chile’s workforce is unionized.
According to Stratfor, “economic growth in Chile, a leading producer and exporter of copper, is declining because of the drop in global commodity prices over the past few years. The slowdown has hobbled the Chilean government’s attempts to pass labor reforms.” This drop in copper prices is due to a decreased demand from China.
While it is too soon to tell how effective the reforms are, there has been a downtick in the unemployment rate under Bachelet from 6.7% in August 2014 to 5.8% in December 2015.
During our trip, I’ll be curious to hear how these reforms have impacted the companies we’re meeting with.
http://www.tradingeconomics.com/chile/unemployment-rate
http://www.wsj.com/articles/chiles-bachelet-seeks-union-friendly-labor-laws-1419881735
https://www.stratfor.com/analysis/chile-slowing-growth-compromises-labor-reform