Gail Mooney-Kelly / Alamy

Inequality underground: Chile prepares to privatize Metro

Critics say the privatization of the Santiago Metro will make unfair labor conditions even worse

SANTIAGO, Chile — In Santiago, Chile, Metro trains run frequently and predictably, free of graffiti or litter. Billboards advertise smartwatches while students and businesspeople flow through well-lit stations. Iconic glass mosaics decorate one line, while the cavernous Universidad de Chile Metro station awes riders with its three-story-high mural depicting the nation’s epic history from pre-Columbian times to the present. The staff is efficient and courteous, dressed in matching polo shirts and bright red and yellow vests.

Yet behind this modern façade are two classes of workers: those who work for the state-owned Metro, and those who are contracted by private companies. “From the outside, everything about the Metro looks beautiful,” said Yolanda Maltés, a subcontracted cashier who charges the blue Bip! cards needed to use Santiago’s public transit system. “But if you go into a ticket booth, you’d cry.” Like Maltés, a range of Metro personnel work for private contractors. Of the 11,200 total Metro workers, two out of three are subcontracted, making scarcely more than $2 an hour.

Divided by income, benefits and labor conditions, Metro workers present a microcosm of Chile’s struggle with inequality. Despite a strong economy driven by copper exports, Chile’s income gap has widened since the return to democracy in 1990. The richest 20 percent of Chileans now hold 57 percent of the country’s wealth. Wealthy residents can buy a Lamborghini in Santiago’s elite suburb of Vitacura, while a quarter of the population cannot pay for food each day. According to Fundación Sol, an NGO that studies labor issues in Chile, subcontracted workers throughout Chile face patterns of workplace discrimination and earn 27 percent less, on average, than their directly employed colleagues.

Given the gap between staff and subcontracted workers in the Metro, labor leaders were alarmed when President Michelle Bachelet announced plans in November to build the first privatized line in the Metro’s 40-year history. While the government says this will speed construction on Line 7 and boost Chile’s economy, workers argue that a privatized line will further erode labor conditions.

The new Metro line is part of a sweeping $4.2 billion transportation plan for the country, half of which will be financed by money from private companies through the mechanism of government concessions. The lion’s share — almost $3 billion — will go toward Metro development. Concessions, while common for large infrastructure projects in Latin America, are relatively unusual for urban transit. In 1994, Buenos Aires became the first city in Latin America to privatize its subway system, and in recent years São Paulo has contracted concessions to build two new metro lines. While Chile has pioneered public-private partnerships in other arenas, such as urban highways, this would be a first for the Santiago Metro, and could entail the privatization of the new stations and the line itself.

“We agree with Metro development,” said Eugenio Valenzuela, head of the Federation of Metro Workers’ Unions, in an interview with Diario Financiero. “But Metro has a mechanism for building new lines that has been successful for over 15 years. We don’t see why we have to set it aside now and hand over operations to a private company.

Symbol of the state

A passenger boards the Metro in Santiago
Gail Mooney-Kelly / Alamy

Since it was first built in the 1960s, the Metro has been financed by the Chilean government and operated by the Ministry of Public Works. The first line opened in 1975, six years after breaking ground, and two years after the military coup that put General Augusto Pinochet in power. In 1989, the Metro was converted to a state corporation.

During Pinochet’s 17-year rule, neoliberal economists known as the “Chicago Boys” aggressively reduced the state’s role. They returned nationalized factories to private owners and privatized social security, higher education, healthcare, utilities and the bus system. Whereas the state controlled over 500 firms and banks in 1972, by 1980 that number had fallen to 25. Santiago’s streets became a maze of private bus lines competing for passengers, and by 1989, 10 years after deregulation, the number of private buses in Santiago had jumped from 5,185 to 10,540.

But the Santiago Metro remained public. With government loans and revenue from fares, advertising and commercial real estate, the network grew from two lines and 27 kilometers in 1990 to five lines and 100 kilometers today, the most extensive system in South America. Thanks to the 2007 transportation reform known as Transantiago, which rerouted bus lines to feed into Metro stations, Metro ridership has skyrocketed to 2.3 million people per day, triple the level a decade ago. 

Two classes of workers

While the government has not specified what the Metro concession for Line 7 will entail, workers fear that the de facto result will be an expansion of the poor wages and working conditions that subcontracted workers already experience. 

“There’s a big difference between what we get and what they give to those from Metro,” said Maria Victoria Fuentes, a cashier who works for GSI, one of three companies that supplies cashiers for the Metro’s ticket offices. Subcontracted jobs currently include cleaners, cashiers, unarmed guards and platform attendants. Those directly employed by the Metro include station chiefs, armed guards, train conductors, mechanics, electricians and administrators.

Metro workers get two days off per week, but subcontracted workers only get one. The starting monthly salary for the lowest-paid Metro workers ranges from $530 to $760, while subcontracted workers make minimum wage, about $350 per month for a 45-hour workweek. Though it rose slightly at the beginning of July, Chile’s minimum wage is still one of the lowest in the developed world.

Metro officials declined to comment on the existing gap in wages and conditions between staff and subcontracted workers. However, they cautioned that it is too early to predict how a privatized line will affect workers, since it is unclear which functions or companies will be part of the concession. In November, Bachelet asked the metro’s board of directors to study methods of financing a new line that would “strengthen the participation of the private sector.” Mauricio Martínez, a spokesperson for the Metro, said that “today, this study is under development,” and noted that it involves “the study of multiple variables, including the connection between different means of transportation, urban planning, and economic aspects.”

“[Contract workers] have no connection with their kids, their husband or their wife. The only day they see their families is when they have their one day off per week. And sometimes they even work that day.”

Maria Victoria Fuentes, a subcontracted cashier

For the 7,600 subcontracted workers who make the Metro run each day, minimum wage is not enough to survive in a city where a gallon of milk costs $3 and a one-bedroom apartment rents for $450 a month. “It’s not enough for the end of the month,” Maltés said. Many workers, she said, are mothers who work double shifts to make ends meet. “The majority of my coworkers are stressed. They have to work overtime, overloaded with extra hours.”

“They get up at 4 in the morning and return at 11 at night. And then, the next day at 4 in the morning again,” Fuentes added. “They have no connection with their kids, their husband or their wife. The only day they see their families is when they have their one day off per week. And sometimes they even work that day.”

Workers said that contractors regularly avoid paying overtime wages. “You’re supposed to sign an attendance book when you arrive,” said Myriam Espinoza, who used to work as a subcontracted cashier. “When they say, ‘Hey, can you stay longer to work extra hours?’ you say yes. But then they say, ‘Don’t sign the book, because otherwise we’ll get into trouble with the Labor Inspectorate.’ They say, ‘We’ll note it here and pay you later,’ Espinoza explained. “But on your pay stub you realize you’re missing the overtime hours you worked.”

Like all Chileans, Metro workers — subcontracted or not — can bargain collectively, but they do not have the right to an effective strike. Pinochet’s 1979 labor code, still in operation, allows companies to replace striking workers. This is a major point in the labor reform currently under debate in Congress.

The cashiers’ union has won some benefits through collective negotiation, such as the right to vacation without docked pay. Yet benefits are not applied equally, and they pale in comparison to the bonuses, days off, professional training, and other benefits provided to Metro staff.

“They try to give us the minimum, which is almost nothing,” Fuentes said.

Daily indignities

Chilean president Michele Bachelet, who is overseeing the privatization of Metro Line 7
Sean Gallup / Getty Images

Just as galling as the gap in wages and benefits, workers say, are the small details that separate them from Metro employees. Although the two types of workers must present a cohesive image to the public, their uniforms vary in quality. “Metro employees have 100 percent cotton shirts, and the sewing is much better; their pants don’t shrink,” Espinoza said. Metro uniforms are tailored, Fuentes said, while uniforms of subcontracted employees are not.

At Christmas, Metro throws a big holiday dinner for its employees, but the private companies do not. Stations have separate bathrooms for Metro staff and for everyone else. One has toilet paper; the other does not.

Bathrooms are a sensitive subject. The cashiers’ union secured the right for workers to use the bathroom outside their lunch break, yet cashiers say they still endure long waits to use the bathroom. According to Valenzuela, the situation is so bad that workers have urinated on their clothing or into bottles.

“It’s a violation of our fundamental rights as people,” Espinoza said.

Small infractions can cost one’s job. This makes it easy, workers say, for contractors to fire those who have worked more years or engage in collective bargaining.

“I would get up at 5 each morning so that they could pick me up in a van and take me to the ticket office. At 6 in the morning it had to be open."

Myriam Espinoza, a subcontracted cashier

Espinoza, a 41-year-old mother of four, had worked as a cashier at the metro for eight years when she lost her job in 2010.  “I would get up at 5 each morning so that they could pick me up in a van and take me to the ticket office. At 6 in the morning it had to be open, and as the lead cashier I had to have the other sales stations enabled.” She worked all morning, with a half-hour lunch, closing her shift at 2 to go home to her children.

But one winter morning, she awoke to find her 20-month-old son, Sebastián, unable to breathe. As a baby he had been diagnosed with chronic bronchitis, a condition associated with Santiago’s air pollution. “He filled up with phlegm, and I had to give him albuterol with an inhaler,” Espinoza said. She had to administer the inhaler multiple times, waiting 10 minutes between puffs. “I wasn’t going to leave the house until he was ok and could breathe.”

She called her manager, but no one picked up. Eventually she reached another supervisor by phone and explained that she would be late due to her son’s medical emergency. But when she got to work 28 minutes late, she was told she was fired.

The prospect of privatizing Line 7, Espinoza said, was “horrible, horrible. Imagine if a company takes over an entire line, it’s going to get even worse. If this is already happening, just imagine how it will be later.” 

The Metro family

Metro employees sympathize with the struggles of their subcontracted colleagues. Valenzuela, the head of the Federation of Metro Workers’ Unions, has worked directly for the Metro for the past 40 years in the electrical division. “We have a lot of understanding and solidarity with our colleagues who work for external companies, since these companies profit excessively based on their sacrifices,” he said.

He recognizes that Metro employees enjoy better wages and working conditions, which he ascribes to a strong union, founded in 1990. Through collective bargaining, he said, Metro workers have won important benefits, such as wage adjustments for inflation every six months, productivity bonuses, and agreements with universities to defray tuition costs for Metro workers. “I believe I’ve done very well in life, and I think that it’s due to having had stability in terms of income,” he said.

“I’m a zealous guardian of this company, because it’s a public company that belongs to all Chileans.”

Eugenio Valenzuela

Head of the Federation of Metro Workers’ Unions

In June, the subcontracted cashiers submitted a petition to be incorporated into the Metro. “We support them,” Valenzuela said. “We aim to ensure that these positions, this work, is internalized, that it returns to the parent company, to Metro.”

“I’m a son of the Metro,” he said. “I’m a zealous guardian of this company, because it’s a public company that belongs to all Chileans.”

Today, visitors to Santiago are reminded to protect the Metro’s image with signs that say “Metro cares for you; care for the Metro.” In opposing Bachelet’s plan to privatize Line 7, labor leaders want to ensure that Metro cares for all its workers equally.

In November, the government announced that a six-month feasibility study for Line 7 would begin immediately, but no results have yet been released. As they wait for further news from the government, Metro union leaders are meeting with Congressional representatives to explain their opposition to this plan.

“We’re going to keep fighting for internalization and against privatization,” Maltés said. “We have experienced privatization in the flesh, and we don’t want those from Metro to experience it. It’s difficult because we’ve always felt like the poor relatives of the Metro. And we don’t want them to feel like we feel.” 

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