Back to Santiago

  The last time I was in Santiago de Chile was in 1991. It was a bad year.  The First Gulf War ended in February. The U.S. economy was in the toilet.  Unable to afford school fees, saddled with a large short-term debt dumped on me due to a bit of ... ah ... creative financing by a ... hmm ... unrelated family member, and needing to save to pay for my long-anticipated trip to South America, I stopped out of school and wound up doing odd jobs that paid enough to keep me sleeping in my car. Which was a 1980 Plymouth Champ.  If Marcia still comes here, she can probably say more about this period than I remember.  Or necessarily want to.

It wasn't the greatest time to decide to go gallivanting off to Santiago, but I managed to get enough money together enough to go.  I don't remember a whole lot.  I have a journal from the period, but the young fellow who wrote in it seems quite alien.  (At some point around 1995 the writer becomes a recognizable version of me.  Stupider and ignorant, but clearly me.  Before that ... who was that guy??) 

So now it turns out that I'll be headed back to Santiago for a few days next month.  It will be interesting to see all the changes.  In that vein, I'm going to begin an intermittent series of posts about Chile, starting with the following chart (you can click on it to have an expanded version pop up): 

It shows the PPP-adjusted GDP per worker (in 2000 dollars) for the United States and Chile between 1950 and 2008.  The data come from the Penn World Tables through 2003; afterwards, the U.S. data are from the Global Financial Statistics database (dividing real GDP by total employment) while the Chilean figures are derived from the Instituto Nacional de Estadísticas, under the somewhat heroic assumption that the growth in Chilean GDP per worker in 2004 pesos is the same as its growth in PPP-adjusted 2000 dollars.  Anyway, the approximation is good enough for a blog post, and unlikely to change this picture much.  (Besides which, I know how the PWT figures are produced, and they're not much more accurate.)

The data show that Chile had an economy about half as productive as the United States at the middle of the last century.  Chile more-or-less maintained that ratio until the economic collapse that hit at the tail end of the Allende presidency and the first few years of the Pinochet dictatorship.  There was a rapid recovery afterwards, but the economy went right into another tailspin in 1982.  The solid growth rates since then have only taken the country back up to the same relative position that it held at the end of World War 2. 

That said, the place is lot richer than it was when I was there in 1991.  Your average Chilean worker produces more than half again as much as he or she produced back then.  But what does that mean on the ground?

Right about now, Doug would probably turn to the human development indices.  Infant mortality, life expectancy, income equality, that sort of thing.  Me, I make like Gary Numan and look at cars.  The following chart ...

  

... shows the number of private automobiles per 1,000 people for various countries around the time that they reached the same level of auto penetration that Chile enjoyed in 1991.  That would be Italy in 1960, France in 1952, Britain in 1951, and Argentina in 1968.  All saw their car ownership grow more quickly thereafter than Chile. 

There is some reason to believe that Chilean income inequality has widened.  Since 1993, average wages have risen 40 percent, in line with labor productivity growth of 42 percent.  That said, the real wages of high-level managers have risen 58 percent, while those of unskilled laborers have risen by 36 percent.  Personal service workers — e.g., maids and security guards — have seen their real wages rise only 29 percent, and skilled machine operators wages have gone up just 25 percent. 

I'll put up more sporadically, as I look into the economic and social situation of the country I'm going to revisit soon.  Is there anything in particular that anyone out there is curious about?

Comments

[Peter]

You're not the only person with bad memories of 1991. That was an absolutely dreadful year for me, between near-poverty and a bad relationship.

[Randy McDonald]

You've described income disparities by occupation and perhaps class, but what are the regional disparities like?