Bloomberg News

Chile Raising Unemployment Benefits as Jobless Rate Grows

May 02, 2012

Chile’s government announced plans to increase unemployment benefits, a week after Finance Minister Felipe Larrain said the economy of the world’s top copper producing nation was operating at near full employment.

Workers who had contracts for an indefinite term will be able to draw 70 percent of their monthly salary in the first month after losing their job rather than today’s 50 percent, President Sebastian Pinera said in a speech televised live on state television. The benefits are part of an insurance system financed by workers, employers and the government.

Pinera said changes in part will be funded by redirecting contributions from a general unemployment account to the workers’ personal account. Larrain said Chile was nearing rates of full unemployment on April 25, before adding that the economy would shed jobs after the end of summer in February.

“This is good news for the freer, more equitable Chile we all believe in,” said Pinera, a Harvard University-trained economist. “This will give workers more peace-of-mind, more security and improved chances to find another job.”

Chile’s unemployment rate increased to 6.6 percent in the three months through March from 6.4 percent through February as the farm and retail industries shed jobs at the end of the southern hemisphere’s summer, Larrain told reporters in Santiago April 30. Unemployment was 7.3 percent in March 2011.

To contact the reporter on this story: Randall Woods in Santiago at rwoods13@bloomberg.net.

To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net.


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