Chilean Labor Reactivation Table Proposes 22 Measures to Tackle Persistent Unemployment

A Chilean task force, the Mesa de Reactivación Laboral, has put forth 22 concrete proposals aimed at stimulating formal job creation, with a specific focus on increasing employment for women and young people, and reducing labor market informality. The group, comprising independent and ad honorem members, worked for 49 days, analyzing 80 submitted proposals and conducting 40 hearings. Their work stems from a dire diagnosis: Chile has experienced 41 consecutive months of unemployment at or above 8%, with the latest figure reaching 9.4% – a five-year high. This unemployment rate is significantly higher for women (10.5%) and youth (24.6%), while the overall employment rate has remained below pre-pandemic levels for 74 months. The task force emphasizes that this is not a cyclical issue but a structural emergency requiring long-term solutions, noting that Chile's economic deterioration is not mirrored in comparable OECD or Latin American countries.

While economic growth is crucial for job creation, the current disconnect between economic activity recovery and employment generation indicates growth alone is insufficient. The proposed measures are organized into five key areas: addressing the care cycle to boost female employment, adjusting employment subsidies with an emphasis on youth and formality, reforming the vocational training system, modifying labor regulations that hinder formal hiring, and improving data availability for policy design and evaluation. Most of these proposals necessitate legislative changes and are not expected to yield immediate employment effects. The group calls for an urgent, national dialogue to address these challenges, acknowledging that achieving consensus may require challenging historical paradigms and building trust. They stress that the cost of inaction is already being borne by nearly a million unemployed individuals, disproportionately affecting young people, women, and lower-income households.