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Chilean businesses are committing to lower the CEO-worker salary gap as inequality protests rage

Desafío 10x is a voluntary commitment to make sure no CEO at a company makes more than 10 times the salary of the lowest paid worker.

Chilean businesses are committing to lower the CEO-worker salary gap as inequality protests rage
[Photo: Fernando Lavoz/NurPhoto/Getty Images]

Since October 18, Chileans have been protesting in the streets of the capital city, Santiago. Though sparked by a 30-peso ($0.04) price hike of the capital city’s metro fare, the focus of the demonstrations has evolved to encompass manifold injustices centered on wealth disparity in the country. Chile, which still uses a constitution written during the government of dictator Augusto Pinochet, is currently the most economically unequal country of the world’s 30 wealthiest nations, according to the Organization for Economic Cooperation and Development. The protestors are demanding higher wages and a better pension system.

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As more than one million protestors—more than 5% of Chile’s population—gathered in Santiago over the past month, some changes are being made. The country’s President Sebastian Piñera announced that he’s replacing his entire cabinet to put together a new government to make social changes, and a number of Chilean businesses have signed onto a pledge to decrease the salary disparities between company heads and low-wage workers.

Called the “10x Challenge,” or “Desafío 10x” in Spanish, the pledge encourages business owners in Chile to make it so a company’s lowest salary is no more than 10 times lower than the company’s highest salary. According to a 2019 study cited on Desafío 10x’s website, the average general manager’s salary in Chile is more than 30 times that of a low-wage worker at the same company. Alternatively, business owners can sign onto the pledge and promise to raise their monthly salaries from the legal minimum of 301,000 Chilean pesos ($405) to about 620,000 pesos ($835). So far, 81% of the 1,108 companies that have signed onto the challenge have opted for both.

Cristian Mackenna, executive director of the agency Contingent first raised the idea for the 10x challenge in a meeting on October 20 with other Chilean B Corps (companies that are certified to adhere to high social and environmental standards in their operations) and an entrepreneurs’ group called G100. At first, the idea didn’t generate much interest. Only about 26 other companies said they’d be willing to sign onto the challenge. On October 21, Mackenna built a website for the challenge—”just a simple landing page, nothing special,” he says—and by the following day, he shared the page privately with the other B Corporations and G100 members.

“When I started the conversation, it didn’t get much traction, but when we shared the site, everyone wanted to sign,” Mackenna says. “Less than one week later, we have more than 1,000 companies that have signed the challenge. The thing exploded, a little bit.”

[Photo: Javier Barrera/NurPhoto/Getty Images]

Now, not only have B Corporations and G100 members have signed the pledge but other Chilean companies, too. Mackenna stresses that the challenge is voluntary. “We want to celebrate the people who can do it but we don’t want to force someone to do it,” he says. He believes that forcing a company to make such a change could result in negative outcomes, like, for example, a company lowering all salaries to narrow the payment gap.

The Desafío 10x just launched, so companies are still working on organizing their next steps to enact change. Organizing it has taken up much of Mackenna’s time over the past couple of weeks, he says, making plans for how to keep the challenge’s momentum going and appearing on various radio and TV shows to spread the word. Because the challenge is completely voluntary, there’s of course no promise that every business to sign on will ultimately implement salary changes, and there’s no specific deadline for companies to make the changes by. However, the 10x website notes that 89% of those who’ve signed on say they will comply in three months or less.

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Marcel Fukayama, cofounder of Sistema B Brazil and executive director of Sistema B International, which certifies B Corporations in Latin America, says he hopes the challenge will help put more businesses on track to reach the UN’s 17 sustainable development goals by 2030. “This [effort] connects with our global agenda,” he says. Goal number 10, he points out, is to “reduce inequality within and among countries.”

The protests in Chile this October certainly spurred the Desafío 10x, says Mackenna. It helped show the urgency of the country’s wealth inequality problem. As a B Corporation leader, Mackenna had been thinking about income inequality for a while, but of course many business owners are concerned solely with their own profits (as is a business owner’s wont). “In the past, only a few B Corps and other business associations were working on [inequality],” he says. “Now, all the country sees the problem.”

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About the author

Jessica Klein is a freelance journalist whose stories about everything from cryptocurrency to Renaissance Faire kink have appeared in The Atlantic, Fortune, BBC, Vice, and The Outline. She is the coauthor of Abetting Batterers: What Police, Prosecutors, and Courts Aren’t Doing to Protect America’s Women, which chronicles the criminal justice response to intimate partner violence in the U.S.

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