Unemployed, Unprotected, Uninsured: Chilean Workers and the Limits of Unemployment Policy, 1930s–40s

This paper explores the influence of the global debate on unemployment and ILO conventions on Chile’s social policy in the 1930s. Building on transnational historiographical approaches and documents from international organizations, I examine how Chilean social reformers negotiated between global and regional forces, why the Chilean social security system did not include unemployment insurance, and how the labor movement responded to these shortcomings. Since the 1910s, experts around the globe had discussed the role of the state in the labor market and the private and public mechanisms to protect unemployed workers. On the eve of the Great Depression, labor statistics and public placement had become the international norm for confronting employment crises, and countries such as Britain and Germany had established unemployment insurance systems. Like other aspects of social and labor reform, the international debate on unemployment had a strong influence in Chile. However, immersed in their particular social and economic reality, social reformers implemented, adapted, and, sometimes ignored, international norms such as the ILO recommendation for unemployment insurance. For example, Chilean officials argued that their country was not ready to enforce more ambitious measures like permanent public unemployment insurance and broader social protection for the unemployed. In 1937, after experiencing the devastating consequences of the Great Depression, Chile established an unemployment fund but only for white-collar employees in the private sector. Blue-collar labor unions perceived social provisions for unemployment to be beyond reach, and strove instead to regulate work contracts, hiring processes, and service indemnity payments. They used collective bargaining, the court system, and direct action to protect their jobs and improve employment conditions. From a broader political perspective, the Left embraced economic nationalism, driven by the conviction that industrialization and the control of natural resources could help overcome the cycle of unemployment and create full employment.