Negotiating for Social Justice
Edited by Susan Hayter
Chapter 7: Illustrating the Gap: Collective Bargaining and Income Distribution in Chile
Gerhard Reinecke and María Elena Valenzuela1 7.1 INTRODUCTION Distributional topics have an important place in public policy debates and are of special relevance in countries with a particularly skewed income distribution such as Chile. Following the global overview on the evidence of worsening wage distribution in a number of countries and the link with weak collective bargaining institutions (Hayter and Weinberg, in this volume), the present chapter will illustrate the same problem through a country case study on Chile. Within the international statistical evidence, Chile is one of the countries with available data with the largest increases in wage inequality between 1995/97 and 2004/05, although the level of wage inequality is in line with several other Latin American countries (ILO 2008b). Whereas in some other countries with particularly important increases in wage inequality, these can be explained by severe economic crises (such as the cases of Argentina, the Republic of Korea and Thailand) or by on-going restructuring in former transition countries (such as Bulgaria, Hungary and Poland), the case of Chile deserves particular attention as these changes have taken place in a comparably favourable economic context. In the case of Chile, the deterioration of the wage distribution is due to a rise in the inequality between median earners and low earners (the fifth decile of wage distribution compared to the first decile), whereas the relation between high earners and medium earners (the 9th decile compared to the 5th decile) has experienced little change (ILO 2008b). The weak performance of...
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