Foreign Investor Explains Capital Strike Against Chile

Chile has enacted restrictive labor laws that hinder businesses. In this guest post, Dane, a resident of Chile from another country, explains his capital strike against Chile. – Mark

I managed two companies here and decided to simply retire. If I return to work it will be a one-man act in consulting or something.

The labor laws heavily favor the workers and governments past enacted laws that gave powerful weapons to the workers. For example, the Dirrección de Trabajo is a legal assistance agency pro-worker and anti-company. The rationale is that the empresa has its lawyers and the poor workers have no representation. Many municipalidades, in their contract bids, exclude any company that has a labor complaint pending. This means simply that one worker made a complaint that has not yet been investigated and adjudicated. But when the company wants to participate in a contract bid, one or more workers will run down and file some phony grievances unless the company pays them a “bonus” to retract them. Otherwise, the company is out of the contract bid eligibility.

The law also permits absences with no explanation – three days per month or two Mondays or two consecutive days within one month. The workers use this with no sense of shame. It’s a right!! Already have a four-day weekend due to a holiday? Hell, make it five “I haven’t missed any days yet this month”. The company is left holding the bag at 8:00 A.M. and scrambling to find a one-day temp.

Workers have “rights” but no responsibilites. For example, a company can fire a worker with thirty days notice or pay the corresponding value of those thirty days. Although the law defines a “resignation” as being with thirty days advance notice, a worker can simply say “I quit” and nothing happens to him if he doesn’t give the company thirty days to find a replacement.

And let’s not forget about the Chilean LAW that makes parents financially responsible for their little children until the age of twenty-six. The kid finds a job and doesn’t like it? Quit! Daddy is required to give him a place to live and food to eat, etc… He has health care (taxpayer funded), Daddy gives him money for a cel and transpo “to look for a job” and, of course, to eat lunch at restaurants because he has “another interview” in the tarde, etc…

Just a couple of examples but I would never invest in a company here.

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2 Responses to Foreign Investor Explains Capital Strike Against Chile

  1. Michael says:

    Sounds like Australia where strike action cannot be ended unless 1. the employer conceeeds to demands OR 2. the employer can show the strike poses a grave threat to the vaguely defined national interests.

    As a result we have some cases where workers are offered 10-20% increases in pay and yet strike action still draws out for months. If we didn’t have lots of coal, iron ore, gold and copper we would be struggling to become a middle income nation. Same deal for Chile it seems, minerals are your one saving grace too.

    • Mark says:

      Australia and Chile are very similar nations. Both have 17 million people, natural resources other than oil, both sell seafood, land food, and wine. Both have a largely temperate climate, although Chile has no hot section like the north of Australia, and Australia has no cold section like Chile and New Zealand.

      Chile has been influenced by Spain, Britain, and in the south, Germany. There has been no Asian influence, as in Australia. About 25% of the people in Sydney were born in another country, while only 3% of Santiago is foreigners. Chile ought to set aside its ego and allow immigrants to open a bank account and stay longer than 90 days.

      Labor laws are bad in both countries compared to the USA. I don’t know much about the history of labor strikes in either country.