7358 COHA Report, The Tradeoff of Labor and Neoliberal Economics: The Case of Chile in the 1990s

Chile’s economic growth under President Augusto Pinochet has been both lauded and reviled in the international community. During Pinochet’s tenure, GDP grew at an unprecedented 5 percent average from 1976-79. While the upper class in Chile benefited from GDP growth, increased exports, and openness of trade, those on the margins remained excluded. During this epoch of austerity and heightened foreign involvement, Chile became one of the most unequal societies in the world. Not only would those in the underprivileged classes not see the benefits of economic growth, but they would also have to live with increased government repression, human rights violations, reduced social spending and restrictive labor laws. Pinochet’s labor laws remained static during the 1990s, and even after redemocratization, as La Concertación coalition failed to pass meaningful labor reforms due to the perceived necessity of consensus building and adherence to neoliberal economics.

Chilean Labor Under Allende

Chilean labor has undergone decades of reorganization, but several labor groups advocated further reforms. Perhaps the most prominent faction in this process has been CUT, the Workers’ United Center of Chile (Central Unitaria de Trabajadores de Chile), a federation founded in 1953 that “brought together 65 percent of all unions” and today includes “79 percent of unionized employees.” In general, CUT’s size provided influence, and it was the foremost political actor for workers’ rights.