llorca & navarrete 2015

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  • 8/11/2019 Llorca & Navarrete 2015


    Please cite this article in press as: Llorca-Jana, M., Navarrete-Montalvo, J. The real wages and living conditions of construction workersin Santiago de Chile during the later colonial period, 17881808. Investigaciones de Historia Econmica - Economic History Research(2014). http://dx.doi.org/10.1016/j.ihe.2014.04.003


    IHE-193; No.of Pages11

    Investigaciones de Historia Econmica - Economic History Research xxx (2014) xxxxxx

    Investigaciones de Historia Econmica - EconomicHistory Research

    www.elsevier .es / ihe


    The real wages and living conditions ofconstruction workersin Santiago de Chile during the later colonial period, 17881808

    Manuel Llorca-Jana a,,Juan Navarrete-Montalvo b,

    a Department of Economics, Universidad de Santiago de Chile, Santiago, Chileb Centro Internacional de Investigacin en Historia Econmica, Empresarial y de la Administracin Pblica, FAE, Universidad de Santiago de Chile, Santiago, Chile

    a r t i c l e i n f o

    Article history:

    Received 30 September 2013Accepted 18 April 2014Available online xxx

    JEL classification:



    Real salariesLiving conditionsChile

    a b s t r a c t

    The main objective ofthis article is to determine the real salaries and living conditions ofconstruction

    workers in Santiago de Chile towards the end ofthe colonial period (c. 17881808). To achieve this pur-pose, we have used the methodology proposed by Allento calculate real salaries in terms ofwelfare ratios.Ourmain conclusions are: the real salaries ofnon-qualified workers remained above the subsistence lev-els throughoutthe entire period studied in this work, pointing to a lack oflabour force in Santiago for thisperiod (in spite ofa population increase during the same period); there was also a significant proportionofqualified workers in the construction sector who earned 23 times more than non-qualified workers,giving rise to a notable heterogeneity in the mean income ofworkers in this sector and a greater differ-ence than in other cities; despite being above the subsistence levels, the real salaries of non-qualifiedworkers in Santiago appear tobe among the lowest in the region, in contrast with previous conclusionsin this respect.

    2013 Published by Elsevier Espaa, S.L. on behalfofAsociacin Espaola de Historia Econmica.

    Salarios realesycondiciones devida de trabajadores de la construccin

    en Santiago de Chile al final del perodo colonial, 17881808

    Cdigos JEL:


    Palabras clave:

    Salarios realesCondiciones de vidaChile

    r e s u m e n

    El principal propsito de este artculo es determinar salarios reales y condiciones de vida de trabajadoresde la construccin en Santiago de Chile al final del perodo colonial (c. 17881808). Con este objetivo enmente, hemos usado la metodologa propuesta por Allen para calcular salarios reales en trminos de ratiosde bienestar. Nuestras principales conclusiones son: los salarios reales de los trabajadores no calificadosde la construccin permanecieron por encima de niveles de subsistencia para la totalidad del periodocubierto por este artculo, sugiriendo escasez de mano de obra en Santiago para dicho periodo (a pesarde crecimiento de la poblacin en el mismo); hubo adems una importante proporcin de trabajadorescalificados dentro del sector construccin, los que ganaron 2 a 3 veces ms que trabajadores no calificados,mostrando as una gran heterogeneidad dentro de los ingresos promedios de trabajadores en este sector,y una diferencia mayor que en otras ciudades; a pesar de estar por encima de niveles de subsistencia,salarios reales de trabajadores no calificados de Santiago parecen ser de los ms bajos de la regin,desafiando as conclusiones previas al respecto.

    2013 Publicado por Elsevier Espaa, S.L. en nombre de Asociacin Espaola de Historia Econmica.

    Corresponding author.E-mail addresses:manuel.llorca@usach.cl, manuel llorca@hotmail.com

    (M. Llorca-Jana),juandonm@gmail.com (J. Navarrete-Montalvo).

    1. Introduction

    This essay is concerned with construction workers real wagesand living conditions in Santiago de Chile during the later colo-nial period, c. 17881808, making use of Allens well-known

    http://dx.doi.org/10.1016/j.ihe.2014.04.0031698-6989/ 2013 Publishedby Elsevier Espaa, S.L. on behalf of Asociacin Espaola de Historia Econmica.

  • 8/11/2019 Llorca & Navarrete 2015


  • 8/11/2019 Llorca & Navarrete 2015


    Please cite this article in press as: Llorca-Jana, M., Navarrete-Montalvo, J. The real wages and living conditions of construction workersin Santiago de Chile during the later colonial period, 17881808. Investigaciones de Historia Econmica - Economic History Research(2014). http://dx.doi.org/10.1016/j.ihe.2014.04.003


    IHE-193; No.of Pages11

    M. Llorca-Jana, J. Navarrete-Montalvo / Investigaciones de Historia Econmica - Economic History Research xxx(2014) xxxxxx 3

    basedon secondarymaterialonly, would be thevaluableand recentwork of Arroyo-Abad et al., a general study of real wages in SpanishAmerica for the period between 1530 and 1820, and which con-tains estimates for Chile for part of this period.14 Unfortunately,Arroyo-Abad et al.s estimates contain some important flaws forChile, which call for important corrections.

    First, when estimating living standards for Chile as a wholeArroyo-Abad et al. combined wages in the main Chilean miningcentres (north of thecountry)withprices in Santiago.This is equiv-alent to takingthe wagesand pricesof two differentcountries, thusmiscalculating real wages for Chile. Indeed, it is well-known thatwages and prices in the Chilean mining districts were higher thanelsewhere in Chile,15 so that deflating nominal wages in the min-ingcentres with the prices of Santiago would inflate the real wagesof the population being analyzed, ceteris paribus. Indeed, Arroyo-Abad et al.recognize this fact by acknowledging that mine workerswages may overstate normal wages of the whole country.16

    Although not explicitly mentioned in their work, Arroyo-Abadet al.s decision could be explained by the lack of alternative wagesdata for Santiago for most of the period covered by their study.

    Another issue with Arroyo-Abad et al.s estimates for Chile isthat the nominal wages data they used for 17501799 is for skilledminers (barreteros), rather than for unskilled miners (apires), even

    though unskilled miners data was also available from Carmagnanifrom 1750 onwards. This is surprising given that theauthors them-selves stated in their article that we only consider payments toworkers in low-skill occupations.17 This is also of consequencebecause skilled miners during the1780s and1790s earned, on aver-age,40% morethan unskilledminers.This issuehas other importantimplications because the cash proportion (monetized) of monthlywages for skilled miners in the Norte Chico was $1218 during thelate 1780s and nearly$10 duringthe1790s.19 In contrast,accordingto our data, for a comparable period (17881808), the most com-mon cashedwageof a constructionworker in Santiago de Chile wasbetween $5 and $7 per month.

    Finally, whencalculatingtotal nominalwages Arroyo-Abad et al.considered the cash wages component only, ignoring the non-

    cash component of workers income, which consisted mainly offood, thus diminishing the actual total income of miners. This, weassume, is explained by the fact that the original data they useddid not contain the non-cash component of workers income for16901749, so that for reasons of uniformity the non-cash com-ponent was ignored altogether, even after 1750. This, again, hasimportant implications, because as we shall discuss below, thenon-cash component of workers wages was mainly food, essential forthe estimation of the living conditions of labourers. In brief, on theone hand Arroyo-Abad et al. underestimated real wages for Chileby not including the non-cash income, but on the other hand theyoverestimated Chilean real wages by taking the wages of skilledworkers in the north and combiningthese wages with the prices ofSantiago. Thus, they were lucky in the sense that correcting these

    two issues may have little impact on corrected real wages as awhole because they counterbalance each other. We will return tothis point later on.

    Equally important, the historiography for thisperiod (Chilean inparticular) usually portrays the working class as a uniform group,living in extreme poverty, therefore without notable real wagesdifferences. This is more evident in the works of authors such as

    14 Arroyo-Abad et al. (2012).15 Carmagnani (1963, p. 80), Pinto (2010, pp. 373374) and Quiroz (2012, p. 106).16 Arroyo-Abad et al. (2012, p. 7).17 Arroyo-Abad et al. (2012, p. 14).18 We haveused $ torefertopesos of8 reales, themonetary unit used inthispaper.19

    Carmagnani (1963).

    Table 1pr