Unformatted text preview: 40 thousand during the end of 2008, but this figure does not differ much from what had been seen in previous years and have actually had a small rise in recent months (see Figure 7 ). Hence, most of the deceleration in employment creation is due to an abrupt reduction in salaried employment creation. 87 Interestingly, real wages have, during the last three months, reverted the downward trend observed for most of year 2008 (see Figure 8) although some occupations (mostly in the service sector) have lower real wages than in January 2007. Chile Labor Market Indicators (2006‐2009) Figure 5 Figure 6 Unemployment Rate 57.0%
10.0 percentage of the labor force percentage of the working population 9.8 55.0% 53.0% 8.6
8.0 7.6 6.8
6.0 activity rate
12 per. Mov. Avg. (activity rate) 2009 Jul 2008 Jul 2007 2006 Jul 4.0 2009 Jul 2008 Jul 2007 Jul 2006 Jul 2005 Jul 2004 51.0% month month Figure 7 Figure 8 108.00 Net job creation/destruction (year-to-year) real earnings per hour 400.00 106.00
300.00 104.00 index ( 2006=100) 100.00 102.00 100.00
2009 Jul 2008 Jul 2007 Jul 0.00 98.00 -100.00 -200.00 Abril 2009 Octobre July April 2008 Octobre July April 2007 Octobre July salaried workers April 96.00 non-salaried workers 2006 2006 thosuands of workers 200.00 month Recent Labor Market Policies • • Chile launched one of the most ambitious fiscal stimulus plans to buffer the impacts of the global economic crisis. In addition to a public investment plan for US$ 1.485 billion (1 percent of GDP) and tax reductions or holidays accounting for up to US$ 1.455 billion (another 1 percent of GDP), president Bachelet announced in early January 2009 several measures related to labor markets: First, a new Youth Employment Subsidy Law (30 Jan 09) provides a 30 percent subsidy of the annual income for those individuals aged between 18 and 24, with finished secondary education and working in a formal position. It only covers workers with monthly (annual) incomes below 88 • • Ch$360,000 (aprox. US$ 600). This Law also includes extensions to maternity benefits and additional leave associated to training activities. Second, in January 2009 a Law was approved providing for temporary income tax reductions for individuals and tax credits for firms that carry out training activities with their workers. Also, the law includes an extraordinary benefit of Ch $ 40,000 (aprox. US$ 67). For families and individuals that are beneficiaries of certain social programs (Subsidio Familiar. Asignación Familiar, Chile Solidario, Asignación Maternal). More recently, the Government has passed legislation to facilitate the access to credit for medium and small enterprises. In early 2008, and not related to the current international crisis, the Chilean Government had adopted important wage measures. In May it approved a bonus of 20.000 pesos (approximately 14% of the minimum wage) for workers with low incomes. Then, in July, it increased the minimum wage from 144000 to 159000 pesos (that is from...
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