Chile: The Underside of the Miracle
Schneider, Cathy
THE CHILEAN ECONOMIC miracle has received a great deal of press over the past decade. Govern- ments as far away as Prague and Moscow have sought the advice of Chilean economists on matters...
...Poverty and income inequality which grew by colossal proportions during the years of the Pinochet dictatorship have scarcely been addressed by the new democratic regime...
...It has been common since the 1960s, and the work on poverty of the Economic Commission on Latin America and the Caribbean (ECLAC) to define poverty by comparing household income to the cost of a minimum food consumption basket, one that would meet the caloric and protein requirements of the household...
...These now employ over45% of the current work force...
...By 1988 that ratio was 54.6% to 4.4%.5 Although unemployment rates have fallen, underemployment and casual employment rates have swelled...
...Foreign governments and non-governmental organizations have cut funding to popular organizations, while the Chilean government provides funds only to those popular organizations willing to convert into small businesses...
...Current labor legislation encourages this "flexible" use of labor...
...Cathy Schneider teaches at Cornell University...
...The sharp drop in the size of the average firm has severely weakened labor's clout...
...A household is defined as poor if the income of the household is equal to or less than two minimum food consumption baskets, and as indigent if it is lower than one...
...It has transformed Chile, both culturally and politically, from a country of active, participatory grassroots communities, to a land of disconnected, apolitical individuals...
...8. Alvaro Diaz, "Nuevas Tendencias en laEstructura Social Chilena...
...30REPORT ON THE AMERICAS 30 REPORT ON THE AMERICASEconomist Alvaro Diaz notes: "There has been a displacement from the neigh- borhood and the street to the workplace...
...Many soup kitchens, for example, have become private bak- eries, groceries or restaurants with government support...
...7. Librecht Van Hemelyryck, "El Desarollo de la pequefia y microempresa en Chile: Un Desafio para el futuro," pp...
...The powerful right-wing Renovaci6n Nacional party is regularly consulted on policymaking, due to its control of the Senate (a consequence of Pinochet's new electoral law, and his nine "desig- nated" senators), while the once powerful Chilean Communist Party has virtu- ally disappeared...
...from a relationship with the administrator of the emergency employment program to one with a private entrepreneur...
...The Chileans point proudly to almost a decade of the highest growth rates in South America (averaging over 5% yearly), low inflation rates (averaging about 20% a year), and unemployment rates that are lower than those of the United States (unemployment fell below 5% this year...
...Chile's once- Most working women strong labor movement has lost clout as casual employment swells...
...3. Elaborated by PET (Programa de Economfa del Trabajo), and based on surveys conducted by INE in 1969, 1978 and 1988 in Gonztilez Riva, ed., Economa y Trabajo en Chile, (Santiago: Programade Empleo del Trabajo, 1991), p. 196...
...toll in the lowest-wage, least-organized sectors of the economy...
...The transformation of the workplace has been complemented by the transformation of the political system...
...2. INE, cited by Jaime Ruiz-Tagle, "Las Politicas Sociales en 199091," p. 46...
...Chile: The Underside of the Miracle 1. National Institute of Statistics (INE), cited by Jaime Ruiz-Tagle, "Las Politicas Sociales en 1990-91," in Gonzailez Riva, ed., Economia y Trabajo en Chile(Santiago: Programa de Empleo del Trabajo, 1991), p. 46...
...The number of unionized workers, as a percentage of the overall labor force, has fallen from 41% in 1972 to fewer than 13% today...
...Despite the current government's large increases in spending on health care, education and social services, over 49% of Santiago's residents still live in poverty...
...The current government's concern with economic stability and political cooperation from the military and the political right has dissuaded all 17 goveming parties from ordent on their own initiative and the expansion of the economy...
...By 1989, 42% of Chileans were living in poverty, and over 12%, compared to 8% in 1969, were destitute (unable to pay even rent).' Caloric intake for those Chileans in the bottom 20% had dropped by more than 23% since 1969 (from an average of 1,925 calories to 1,474 in 1989).3 The situation is even more dramatic in the capital city of Santiago, home to almost half of Chile's population...
...The transformation of the economic and political system has had a profound impact on the world view of the typical Chilean...
...4. Ricardo Ffrench-Davis and Dagmar Raczynski, The Impact of Global Recession and National Policies on Living Standards: Chile, 1973-1989 (Santiago: CIEPLAN, 1990), p. 37...
...In 1969 the income share of the wealthiest fifth of the population was44.5% as compared with 7.6% for the poorest fifth...
...Over 25% are employed in domestic service alone...
...They are thus neither willing nor able to give permanent contracts to their employees...
...The rapid growth of raw-material exports in areas such as fruit, seafood and lumber has coincided with the collapse of large industry in sectors such as textiles and construction...
...The ratio of workers to employers is half what it was in 1960...
...Women made up 34.6% of the labor force in 1985, up ganizing among the urban poor...
...The fragmentation of the social relations of the workplace has obscured the sense of collective fate and identity among Chile's working class...
...New employment opportunities in seasonal agriculture, for instance, have been filled largely by women, who work for minimal wage, and have no organizational representa- tion and no history or familiarity with labor organizing...
...POOR SALARIES HAVE ALSO forced women to enter the labor force in large numbers...
...The Socialist Party, the second largest in the governing coa- lition after the Christian Democrats, has embraced the free market, leaving, ironically, only the neo-fascist Independent Democratic Union (UDI) with an incentive-which it vociferously pursues-to mobilize from below...
...In 1979, however, six years of military rule had increased poverty lev- els to 36...
...Their exposure to po- litical or labor organizers is minimal, and with the exception of some important public-service sectors such as health care, they lack either the resources or the disposition to confront the state...
...4 The relative inequality of income between the top and bottom fifths of the population has also increased dramati- cally since the implementation of the new economic model...
...The ability of the Chilean economy to yield consistently high rates of economic growth has helped forge a new consensus among Chile's formerly antagonistic political parties...
...The number of serious injuries in the workplace tripled between 1980 and 1990.8 The change in work patterns has had a significant impact on social relations...
...5. INE, cited by Jaime Ruiz-Tagle, "Las Politicas Sociales en 199091," p. 46...
...An eggplant vendor at Santiago's central market...
...161-187...
...Maria Elena Valenzuela, "The Evolving Role of Women," in Paul W. Drake and Ivan Jaksic, The Struggle for Democracy in Chile (Lincoln: University of Nebraska Press, 1991), pp...
...The church has also withdrawn from political activity, hoping to reestablish spiritual unity within its ranks and to defuse some of the more radical Marxist and feminist organizations nurtured on its doorstep...
...But formostof Chile' s working poor, the economic model has been anything but miraculous...
...They have little contact with other workers or with neighbors, and only limited time with their family...
...6 At the same time, the number of Chileans who are self-employed-who work alone or own firms with fewer than fouremployees-has rapidly grown...
...Irregular hours, unstable employment, and low caloric intake have increased levels of physical and mental exhaustion...
...Work hours have been changed, family relations modified, and the quantity of social interactions has multiplied...
...from relationships with neighbors to relationships with clients...
...6. Jaime Ruiz-Tagle, El Sindicalismo Chileno despuds el plan laboral (Santiago: PET, 1985...
...The cumulative impact of this change is such that we are un- likely to see any concerted challenge to the current ideology in the near future...
...The owners of such small enterprises often live on the verge of poverty, dependent on temporary contracts from large conglomerates called AFPs (Asociaciones de Fondos Provisionales, or Mutual Funds...
...The growth in self-employ- ment is reflected in the explosive development of microempresas (microenterprises) which contract out to large conglomerates, or service the industrial sector in areas such as information, pub- licity, marketing, security systems, repairs and maintenance...
...Most Chileans today, whether they own a small, precarious business or subcontract their labor on a temporary basis, work alone...
...In 1969, four years before the military coup, 28.5% of Chileans lived in poverty.' Urban poverty was a major campaign issue in the 1970 election of the socialist Salvador Allende...
...While the 10 richest families in Chile control the AFPs, workers in microempresas are paid salaries barely above subsistence, without fringe benefits orjob security...
...Chile's multiparty sys- tem based on proportional representation has been supplanted by a two-party system in which the governing coalition includes 17 political parties, ranging from left to center...
...The fragmentation of opposition communities has accomplished what brute military repres- sion could not...
...143-177, in Eduardo Valenzuela, Proposiciones 20 (Santiago: SUR, 1992), p. 154...
...Govern- ments as far away as Prague and Moscow have sought the advice of Chilean economists on matters ranging from privatization and economic restructuring, to unemployment and poverty...
...The entrepreneur is encouraged, the political organizer is repressed...
...By 1976, a year and a half after the coup, poverty in Santiago had increased to 57...
...88-119...
...In 1969, 28% of Santiago residents lived in poverty...
...They are depenfrom 27.6% in 1976...
...This article is adaptedfrom her forthcoming book Shantytown Protest in Pinochet's Chile (Temple University Press...
...Asalaraci6n Informaly Pobrezaenlos Ochenta," inEduardoValenzuela, Proposiciones 20 (Santiago: SUR, 1992), pp...
...9. AlvaroDfaz, "NuevasTendencias enlaEstructura Social Chilena," p.117...
Vol. 26 • February 1993 • No. 4
