Useful Wage Reforms - Suggestions?

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chilly
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Useful Wage Reforms - Suggestions?

Post by chilly » Fri Nov 08, 2019 3:58 am

Maybe minimum wages need to be raised and work week reduced but let's keep an open mind and maybe see the need to make multiple wage reforms, which balance both employee and employer needs.

If everyone's minimum wage is increased, will Chilean customer service and customer & employer satisfaction improve? Probably not. (My post is biased from an employer's view)

Overall, unions seem to have unlimited power and employees have strong contract rights and a lot of employer-paid benefits and bonuses. Employers pay an additional 15% of salary in benefits/retirement/unemployment + potentially 25% of annual salary in profit sharing, 15 days per year vacation, 14 days per year holidays, 30 weeks of partial payment due to pregnancy, "legal gratification" payment, free childcare from companies with 20+ women, etc. It's not bad to offer these but let's add this to the discussion when discussing minimum wage.

If a more "at-will" model was used, both employers and hard-working employees could benefit. Currently, if an employee does not help a customer, current law seems to require paying severance based on length of service to the employee if terminated. It becomes a big deal with legal boards and penalties, etc. Women get about one year of special employment protection after child birth. Employment is on a fixed contract for duties, payment and length, and is not flexible. If business is bad and you terminate an employee, the employer must pay severance.

My general view would be to move closer to an employment "at-will" policy with more job position flexibility, especially for small companies. US companies benefit by having part-time employees for a few hours a week and pay per hour. If the employee is beneficial to the company, their hours can be increased. If business is bad, work hours can be reduced.

But specifically, I would want employees that make happy & paying customers. Pay more for good employees that benefit the company and be able to release those who are not suitable for the position, without undue penalty.

What do you all think could balance employment law to benefit a) hard-working employees, b) the employers and also c) CUSTOMERS.

Who currently says that Chilean customer service is the best in the world? If you think the current system is great and only the minimum wage needs to be increased, go ahead and say so.

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Re: Useful Wage Reforms - Suggestions?

Post by Zenth » Fri Nov 08, 2019 8:33 am

Eliminate the system of employment contracts for most positions. Employees resign with notice and employers fire for cause. Pay severance if a position is eliminated or a business conducts a planned closure.
Hire based on merit, not connections or appearance.
Objective performance reviews.

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Re: Useful Wage Reforms - Suggestions?

Post by admin » Fri Nov 08, 2019 10:35 am

copec just committed to raising wages to 500,000 across the country.
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Re: Useful Wage Reforms - Suggestions?

Post by cali_chile48 » Fri Nov 08, 2019 1:20 pm

University of Talca has recently adopted a policy of re-distributing wages. I didn't catch all the details, but from what I understand they negotiated with all the employees and made an agreement that the highest paid employees should not make more than 10x what the lowest paid employees make.

There's a Twitter feed called #desafiox10 that is promoting this idea.

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Re: Useful Wage Reforms - Suggestions?

Post by Zenth » Fri Nov 08, 2019 9:22 pm

That 10X doesn’t work. The ice cream company Ben and Jerry’s tried that and could not hire a comptroller. They abandoned the idea.
The owners are very socially conscious men.

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Re: Useful Wage Reforms - Suggestions?

Post by admin » Sat Nov 09, 2019 9:11 am

yea, the 10x or any limit like that in a private company is a rediculas restriction. simply does not square.

say you have an IT company. you need 20 high end, highly experienced programmers, and one janitor. That makes no sense.
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Re: Useful Wage Reforms - Suggestions?

Post by cali_chile48 » Sat Nov 09, 2019 11:00 am

That 10X doesn’t work. The ice cream company Ben and Jerry’s tried that and could not hire a comptroller. They abandoned the idea.
The owners are very socially conscious men.
I guess they needed a socially conscious comptroller.
say you have an IT company. you need 20 high end, highly experienced programmers, and one janitor. That makes no sense.
In that case the company could probably afford to give the janitor a raise.

The whole idea of 10x (or 15x, or 20x, but not 20,000x) depends on people having a fundamental belief in the equality of all human beings. Yes, some are "smarter", some have rare abilities that are monetizable, but everyone contributes. The low wage employees also perform important tasks that are important to the success of the business. The fact that many others could do their job is relevant in a job market in which many people compete for low wage jobs, so the wages stay low. The owners/directors/managers could apply a different model that doesn't place profits over basic fairness, and if that idea became popular then the competition model breaks down.

In Chile, a minimum wage worker makes 350.000/month. 10x that amount is 3.500.000. That's quite a lot of money. Anyone making that much can afford a pay cut, and if this consciousness had been applied in Chile, the country wouldn't be burning. In the US, a minimum wage worker makes somewhere between $8 and $15 per hour. $80 to $150 per hour is quite a good wage that anyone should be able to live off of quite comfortably.

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Re: Useful Wage Reforms - Suggestions?

Post by tiagoabner » Sat Nov 09, 2019 11:35 am

cali_chile48 wrote:
Sat Nov 09, 2019 11:00 am
That 10X doesn’t work. The ice cream company Ben and Jerry’s tried that and could not hire a comptroller. They abandoned the idea.
The owners are very socially conscious men.
I guess they needed a socially conscious comptroller.
say you have an IT company. you need 20 high end, highly experienced programmers, and one janitor. That makes no sense.
In that case the company could probably afford to give the janitor a raise.

The whole idea of 10x (or 15x, or 20x, but not 20,000x) depends on people having a fundamental belief in the equality of all human beings. Yes, some are "smarter", some have rare abilities that are monetizable, but everyone contributes. The low wage employees also perform important tasks that are important to the success of the business. The fact that many others could do their job is relevant in a job market in which many people compete for low wage jobs, so the wages stay low. The owners/directors/managers could apply a different model that doesn't place profits over basic fairness, and if that idea became popular then the competition model breaks down.

In Chile, a minimum wage worker makes 350.000/month. 10x that amount is 3.500.000. That's quite a lot of money. Anyone making that much can afford a pay cut, and if this consciousness had been applied in Chile, the country wouldn't be burning. In the US, a minimum wage worker makes somewhere between $8 and $15 per hour. $80 to $150 per hour is quite a good wage that anyone should be able to live off of quite comfortably.
Pay raises are the way to go. Start chopping high-end salaries and you'll soon have these same professionals incorporating as "individuales" providing services as consultants to the same companies.
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Re: Useful Wage Reforms - Suggestions?

Post by admin » Sat Nov 09, 2019 12:59 pm

It is this simple.

Push up the minum wage to 500,000, provide some staged implementation to help the small businesses adjust; or perhaps provide them some real tax breaks for doing it.

Then, implement a longer term plan to provide for increases of the minimum wage at a pace the economy can sanely handle without imploding.

Guess what?

It goes a long way to solving another problem.

That would help also with the problem of the pension systems, because an additional 15% of almost nothing is still almost nothing. without a wage increase, whatever other reforms might be implemented, the pensions will still be under funded.

at the same time, chile needs to be looking at the big picture. besides a massive problem of the structurally unemployable (e.g. people that can never hold a job, don't show up for work, ripoff their employer, etc); chile is going to have to make plans for dealing with automation.

half the workforce in chile still struggles with basic computer skills (especially the "IT expers"). There is a whole lot of jobs are going away over the next 10 to 20 years. Texting on social media, is not a skill.
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Re: Useful Wage Reforms - Suggestions?

Post by admin » Sat Nov 09, 2019 1:05 pm

several of the big copper mines for instance are working on automating much of their machinery.

one of the largest employers / professions of low skilled labour in chile is driver. taxi drivers, truck drivers, etc. those will be a large, and sudden, evaporation of what is traditionally been a fairly well paid profession for those with little education.

stores and banks in chile, also have a lot of room for automation. agro, plenty of innovation there too. construction industry too.
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Re: Useful Wage Reforms - Suggestions?

Post by admin » Sat Nov 09, 2019 1:12 pm

so, they could jack the minimum wage up to a 1 million pesos a month. 2 million, etc., we will just accelerate the automation process.

Guess what I am going to do as an employer?

I am going to take a hard look at the job everyone does, probably buy or write some new software, and cut anyone loose that can be automated.
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Re: Useful Wage Reforms - Suggestions?

Post by tiagoabner » Sat Nov 09, 2019 1:50 pm

Yep, this is a mindset problem. Chileans have an us/them mentality regarding their employers, as if the employees wouldn't be shafted if the business goes under.
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