40-Hour Week, Minimum Wage, and Pension Reform

Jara was named Minister of Labor and Social Welfare in 2021 by current president Gabriel Boric, of the broad-left Frente Amplio. She has been a bright spot in a government generally unable to deliver on the transformative promises made in the wake of the 2019 social movements known as the “Chilean winter.” That’s what makes her an interesting candidate, explains Víctor Muñoz Tamayo, a researcher at Chile’s Universidad Católica Silva Henríquez, whose work focuses on Chile’s political left and student movements.

“Jeannette Jara is a candidate who showcases the changes that this government has made, but also represents a traditional left-wing, class-based politics,” he explains. “Reducing the workday, increasing the minimum wage, and reforming the pension system: all of this has to do with the historical demands of the Left.”

As labor minister under Boric, Jara’s key reforms include a gradual reduction of the workweek from forty-five hours to forty hours over a five‑year period, a minimum-wage increase of more than 50 percent, and a reform of Chile’s privatized pension system.

This last reform, while incomplete, tackles one of the historic inheritances of Augusto Pinochet’s authoritarian-neoliberal dictatorship — a pension system in which individual contributions are reinvested in the market. While the system promised higher returns than a traditional government pension, the results have shown anything but. Many Chileans’ pensions are as little as half to a quarter of their last paychecks, and (about four-fifths of the time) routinely below the minimum wage in one of the Latin American countries with the highest cost of living.

Passed in January 2025, the new pension scheme offers a “mixed” system of individual savings and employer contributions (previously, employers had no obligations to contribute to pensions). Also gradual, the full extent of the reform won’t be seen until roughly 2033 when employer contributions are set to plateau at 8.5 percent. More immediately, the reform increases the Pensión Garantizada Universal (Universal Guaranteed Pension, or PGU), a baseline social security–style pension for the lowest earners, implemented under 2000s–2010s president Michelle Bachelet.

Andrés Giordano, a deputy from Boric’s Frente Amplio coalition and president of the Chamber of Deputies’ Labor Committee, explained that this reform showed Jara’s shrewd political tactics, especially in moments where it seemed like the far right, opposed to the reform, had gotten the upper hand. “She constantly sought opportunities for dialogue, mainly to achieve the central objective, which was for pensioners to have a concrete response to the crisis of misery-level pensions,” Giordano told Jacobin.

Deepening the Reforms

While significant, Jara’s reforms could go even further, Giordano said. One of the initiatives that Jara sought to get off the ground — a universal nursery system intended to take the financial burden off of working-class families — is still being examined by the current government. The law, if passed, would make it easier not only for working mothers but also working fathers to access affordable childcare.

Giordano added that improving collective bargaining rights was another key goal of the current administration. “In Chile, we only have negotiations at the company level, which makes it very difficult to improve working conditions, even in unionized workplaces,” he said. This has led to a particularly low unionization rate nationwide: around 18 percent. (Giordano plans to introduce a collective bargaining bill by the end of the year.)

Simón Ramírez — the executive secretary of the national leadership for Boric’s Frente Amplio, and himself now an election candidate — agreed that the transformation of the labor market that began under Jara was important but could go further. “These reforms might seem standard in another country, but in the laboratory for neoliberalism that is Chile, they were not the norm,” Ramírez says. “I think Chileans are realizing that things are better off than they were before the Boric administration came into power. That said, we’re still far from transforming the economic and political superstructures of this country.”

Not all feel this bullish. In a heated election season categorized by a hard turn by the three right-wing candidates (Evelyn Matthei of the Independent Democratic Union; José Antonio Kast of the Republican Party; and Johannes Kaiser of the National Libertarian Party), Jara’s association with Boric’s government, whose approval rate has hovered around 30 percent, has at times also been seen as a handicap.

“Everyone, from the Right to the Left, is convinced that in order to eliminate the Jara candidacy, it has to be identified with the government,” Manuel Riesco, the vice president of the Center for National Studies of Alternative Development (CENDA), told Jacobin. “The current government has said many good things . . . but it turns out that it has also done some things badly — and not only that but the main thing is that they have not done what needs to be done.”

Riesco pointed to the pension reform, which did not fully do away with private pension fund administrators (AFPs), and the government’s inability to nationalize Chile’s copper mines, as examples of where the government, with Jara at the forefront, came up short.

Patricia Lillo Reyes, a spokesperson for the activist group No More AFP, also expressed disillusionment with the outgoing administration. “It’s not easy, but it can be done — and we thought Boric was going to do it,” Lillo Reyes said. “And if Boric’s government didn’t do it, neither will this one.”

To some in her own party, Jara is seen as a reformer who has abandoned the more radical, transformative proposals of the Chilean Communist Party in favor of a center-left platform. Though the PCCh, long excluded from left-wing coalitions, celebrated the pension reform, the party has in the past pushed for deeper labor protections, including automatic unionization, stricter regulations for firing workers, and stronger collective bargaining agreements.

Dire Alternatives

Whether Jara stands a chance against her right-wing competition may come down to how she fares with low-income and working-class voters who have not traditionally participated in politics, Muñoz Tamayo, at the Universidad Católica Silva Henríquez explains.

In a first for a national-level election, Chileans will be obligated to vote — at the risk of a hefty fine. “Compulsory voting has tended to favor the Right,” Tamayo says. “Why? Because the profile of the more apolitical person is someone who will say, ‘Look, whoever wins, I still have to go to work tomorrow.’”

To appeal to these voters, Jara has made a “salario vital” (living wage) of 750,000 pesos (about $750) per month and the creation of a National Employment Agency key elements of her outreach strategy. She’s also proposed a National Care System for caretakers of young children and the elderly. Perhaps most importantly, she’s highlighted her working-class roots growing up in a poblacion known as El Cortijo in the low-income suburb of Conchalí, near Santiago.

Her platform — and her background — contrasts with those of her three main competitors. Center-right Matthei has said she’d freeze further minimum-wage hikes and instead create a million jobs through public-works and tax-credit programs, while letting companies use hourly contracts and more flexible shifts. On the further right, Kast has proposed easing restrictions on firing and reducing labor inspection requirements.

In recent weeks, libertarian candidate Johannes Kaiser has gathered steam in the polls — rising to a virtual tie with Matthei. Kaiser uses populist rhetoric against the “political class” and aims at appealing to the working class. He frames himself as an anti-system candidate willing to trim the excesses of the state. Yet his policies, including a “youth wage” to undercut the national minimum and a proposal to slash more than 100,000 public sector jobs, would significantly hurt Chilean workers.

Rifo, from ANEF, worried that any one of these candidates might chip back at the gains that were so hard-won under the current administration.

“We run the serious risk of an ultra-right-wing government with convictions that are absolutely contrary to those embodied by Jeannette Jara,” she says. “I am an old-school trade unionist. I am an old woman who suffered political imprisonment and torture, and I am terrified, to be honest, of having to return to the son of a fascist, a neo-Nazi, and above all of what he might promote in this country.”

In Chile, the traumas of the past are never far from the surface. For many, these elections aren’t just about the risk of reforms being reversed but something much deeper.