Labor Minister Tomás Rau rejected the idea of a new pension fund withdrawal for unemployed people on Tuesday. According to Emol, the People's Party (PDG) is considering the initiative, which would target people who have been out of work for six months or more.
Rau spoke at the La Moneda Metro station during the opening event of SME Week. He said the government listens to proposals, but was clear about withdrawals. "History has taught us that pension withdrawals were not good policy," the minister said.
According to Rau, those withdrawals sent inflation soaring and depleted pension savings. Chile already went through that debate during the pandemic, when Congress approved several withdrawals from pension fund administrators. Emol does not detail the design or amounts of the PDG proposal.
The minister did leave the door open to another discussion. He proposed discussing policies with a real impact on job creation, instead of drawing on pension funds.
On the option of injecting more money to tackle unemployment, Rau pointed to public finances. He recalled that the government inherited a structural deficit of 3.7% of gross domestic product (GDP), around US$13,000 million. Even so, he said the government is willing to add resources if conditions or assessments change.
Two subsidies are currently in place. Modo Empleo started with $25 billion, while Chile Despega contributed another $91 billion. According to the minister, the two have received more than 100,000 applications.
The labor market situation explains the pressure. President José Antonio Kast launched Chile Despega on September 28, with unemployment at 9.6% in the June-August quarter, its highest level in more than five years. The plan seeks to mobilize $1.3 trillion and create more than 100 thousand jobs.
