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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

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

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Article

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:

N36N96

Keywords:

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:

N36N96

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:[email protected], manuel [email protected]

(M. Llorca-Jana),[email protected] (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.
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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 1primary source of information forall cash wages used in this essay.

Year Construction work Year Construction work

1788 Catedral de Santiago 1798 Casa de Moneda1789 Catedral de Santiago 1799 Casa de Moneda1790 Catedral de Santiago 1800 Casa de Moneda1791 Catedral de Santiago 1801 Casa de Moneda1792 Casa de Moneda 1802 Casa de Moneda1793 Casa de Moneda 1803 Casa de Moneda

1794 Casa de Moneda 1804 Casa de Moneda1795 Casa de Moneda 1805 Casa de Moneda1796 Casa de Moneda 1806 Real Audiencia1797 Casa de Moneda 1807 Casa de Aduana

1808 Casa de Aduana

Source: ANCH, Fondo Contadura Mayor, First series, volumes 1054, 1058, 1059,1060, 1061, 1062, 1063, 1064, 1065, 1068, 1069, 1072, 1089, 1238; Second series,volumes 1229, 1340, 1349, 1362, 1365, 1386, 1393, 1413, 1416, 1471, 1514 and1517.

Villalobos, Len, Salazar and De Ramn.20 As a consequence, thereis a distinction between the living standards of the Chilean elites(often referred to as the 300 families) and the rest of the popula-tion, but not between the different groups which made up the restof the population. Or in the words of Collier and Sater,Chilean colo-

nial society was divided in two: the elites and everybody else.21Therefore, by exploringreal wages differences among labourers, wecan gain a better understandingof all the disparities in real incomewithin this everybody else category, which as we shall see weresubstantial for Santiago.

Allin all, this essayshedsnew lighton workerslivingconditionsin Santiago at the end of the colonial period by calculating for thefirst time real wages forthis city in particular, notonly forunskilledworkers, butalso for skilled ones, a neglected area not only in ChilebutingeneralformostofLatinAmerica.22 Thisisimportantbecausereal wages are virtually the only solid information we have onstandards of living in developing countries before 1820.23 We alsocorrect the only previous estimates available of welfare ratios forworkers in Chile (i.e. those of Arroyo-Abad et al.), thus improving

our understanding of the labour market during this crucial periodbefore independence. In particular, we conclude that, if comparedto other locations of Spanish America, real wages were not as highas Arroyo-Abed et al. found for Chile for the 1780s1800s in par-ticular.

This paper consists of 4 other sections. In the next section wedeal withunskilled construction workers nominal wages. We thenturn ourattention to prices in Santiago in order to calculatethe costof a bare-bone basket forthese unskilledworkers.In the followingsection we estimate real wages based on the data produced in thepreceding two sections, not only for unskilled, but also for skilledworkers. Finally, we compare these real wages for Santiago withthose of unskilled workers in other cities.

2. Unskilled construction workers nominal wagesin Santiago, 17881808

This section deals with unskilled construction workers nomi-nal wages in Santiago between 1788 and 1808. Table 1 providesthe name of Santiagos public works for which each years infor-mation was extracted to build the series shown in this paper.24 For

20 Len (2002a, pp. 6769), Len (2002b, pp. 254255), De Ramn (1992, pp.106111), Villalobos (1961, pp. 5153) and Pinto and Salazar (1999, pp. 9 and 98).

21 Collier and Sater (2004, pp. 1820).22 Arroyo-Abad (2013, p. 116).23 zmucurand Pamuk (2002, p. 294).24 Inall, we collected data for around 1000 weeks during 21 years, which gives a

total of about 18,00020,000 records entered into our database.
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4 M. Llorca-Jana, J. Navarrete-Montalvo / Investigaciones de Historia Econmica - Economic History Research xxx (2014) xxxxxx

each of these works, the wages ledgers were categorized by theirrelevance to unskilled workers and skilled workers respectively.Here we are mainly dealing with the first group. Workers receivedpart of their payments in cash (i.e. in specie), weekly,25 butitisalsoimportant to note, they were given food while at work. This non-cash part of the wages is known as natural salary in the literature,as opposed to the monetizedor cash salary.26 Thatis, total nominalwages would be the sum of the value of the food provided at work,plus the cash remuneration, as previously considered by Carmag-nani for the Chilean north,27Johnson for Buenos Aires,28 and otherworldleadingscholarsonthissubjectsuchasBroadberryandGuptafor Asia.29 Yet, Quiroz has claimed that it is inaccurate to adopt thismethodology because this is more a historiographic interpretationthan a wages reality, adding that even though there was indeedprovision of food for workers, the food provided was independentof the cash payment; it was accounted for in different ledgers fromthe cash payment; and there was no explicit amount of food to begiven per day.30 In a radical decision, Quiroz decided to ignore thepaymentsin foodaltogether,31 eventhoughQuiroz herself is awareof the fact that during the late colonial period workers could spendas much as 80% of their total income on food.32 In all, we are instrong disagreement with Quiroz on this point.

Quiroz may have a point to make, but it is difficult to maintain

that the food provided was independent of the cash payment: ifthe worker did not turn up, no food was given (nor cash). Further-more, whether the food provided was accounted for in a differentledger or not seems to have been more of an accountancy issuethanan income-relatedone. Indeed, considering labourers worked,or could work, 12 h per day for 6 days per week, then the foodprovided while at work could represent an important part of theirtotal income. Peons cared very little about whether the food theyreceived was, or was not, accounted for together with the cashpayments they also obtained. What they really cared about waswhether this food was, or was not, importantfor theirtotalincome.In the same vein, although for different reasons, Allen et al. (2012)also ignored non-cash payments in their total nominal wages cal-culations: sometimes wages were paid exclusively in cash, and

sometimes they included food, drink, or accommodation. We havefocusedprimarilyoncashwagesbecauseestimatingthevalueofin-kind payments is difficult.33 The said difficulty has been overcomehere.

Before going any further, it is worth noting that authors such asRomanotold us beforethat wages,in general, remained stagnant inChile during the period we are dealing with in this paper, althoughRomanos evidence is patchy and does not relate to unskilledlabourers in particular.34 Of more interest to us here, for the partic-ular case of Santiago, Quirozpreviously found that for constructionworkers in Casa de la Moneda, between 1792 and 1805, the cashwages of unskilled workers remained without any change whatso-ever (at $6 per month).35 We wanted to verify andexpand Quirozsresults and collected comparable data for the same period for Casa

de la Moneda, butwe have also collected data from other construc-

25 As shown recently by Quiroz, cash payments (in specie) were very common inChile during the late eighteenth century (Quiroz, 2012, p. 99). This is in line with

Johnsons work for Buenos Aires (1990) but contradicts Romano (1963, pp. 3840)and Romano(1965, pp. 3435).

26 Carmagnani (1963).27 Carmagnani (1963).28 Johnson (1990, pp. 140 and 143).29 Broadberry and Gupta (2006, p. 13).30 Quiroz (2009, pp. 214215).31 Quiroz (2009, p. 222).32 Quiroz (2009, p. 253).33 Allen et al. (2012, p. 869).34 Romano (1965, pp. 4445).35

Quiroz (2009, p. 229).

2.50

2.00

1.50

1.00

0.50

0.00

1788

1789

1790

1791

1792

1793

1794

1795

1796

1797

1798

1799

1800

1801

1802

1803

1804

1805

1806

1807

1808

Fig. 1. Cashwages of unskilledworkers,reales per day,17881808. (Most unskilledworkers were paid thesame rate, although there were some variations in theratespaidtothemwithinthesameweek.Wehaveused themode, rather thanaverages, tocalculate annualwages because an overwhelminglymajorityof workers fallswithinthe modal rate.)Source: See Table 1.

tion works for four and three years before and after, respectively,the period covered by Quiroz. Our results can be seen in Fig. 1.

Our findings are in line with those of Romano and Quiroz, butrather than complete stagnation we found some annual varia-tions for the cash component of nominal wages. It is true thatbetween 1788 and 1805 daily payments were on average 1.8realesper day in 11 out of 18 years, but it is also true that within thisperiod the series oscillated between a maximum of 2.1 and aminimum of 1.7 reales per day. Even for Casa de la Moneda, cashwages of unskilled workers departed from the fixed rate reportedby Quiroz in 1792, 1794 and 1804. For these three years, the tem-porary increase in 1794, which is coincident with an importantincreasein the pricesof jerkedbeef(themainstaple food forlabour-ers) for that year also, is particularly significant. Finally, the valuesfor 18061808 depart from the general trend observed in the pre-vious years, butthis may be because these wages relateto differentconstruction works of the previous 18 years.

Having collected data on cash wages, we now need to add nat-ural wages (non-cash) in order to obtain total nominal wages.Workers typically worked 12h a day, so that they received break-fast and lunch during their workday.36 This routine is similar tothat of workers in Buenos Aires, where the working time per daywas 1112 h.37 The food given in Santiago consisted mainly ofcharqui (jerked beef, and only occasionally fresh meat),38 bread,frangollo (boiled wheat), fat, beans, chilli, onion, salt and water. Toconvert the value of the food provided into cash salary, we haveestimated the actual value of the food provided to workers perday worked. We examined in particular the ledgers of Tajamares

del Mapocho for the period 17941805, which provide unmatchedevidence, and found that jerked beef and bread accounted for 40%and 38% (respectively) of the money spent on feeding the work-ers, followed distantly byfrangollo (5%), while fat, beans and chilli

36 Carmagnani (1963, p. 69) and Salazar(1985,p. 236).37 Johnson (1990, pp. 137 and 140).38 This means that Chilean constructionworkers consumed more meat than else-

where (but mainly dried). According to Allen,for poor labourers around theworld,meat was rare and consumed mainly on ceremonial occasions. Allen et al. (2012,p. 872). In contrast,in Santiago, jerkedbeef wasconsumedin a regular fashion. It isworthnoting thatelsewhere, jerked beefwas mainly regarded as slaves food,beingunpopularamong free workers.That is,thehigh consumptionof jerkedbeefin Chile

would be exceptional among thefree population of theAmericas.


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Table 2Annual total wages of unskille d construction workers in Santiago de Chile ,17881808 (pesos per year).

Year Nominal wages, $ per annum

Cas hwage Value offoodgiven atworka Total wage

1788 70 56 1261789 70 57 1261790 70 57 1261791 68 55 1221792 67 54 1211793 64 52 1171794 75 61 1361795 64 52 1171796 64 52 1171797 64 52 1171798 64 52 1171799 64 52 1171800 64 52 1171801 64 52 1171802 64 52 1171803 64 52 1171804 60 49 1091805 64 52 1171806 53 43 961807 79 64 1431808 79 64 143

Source: For cash wages, same as in Table1, and for the value of food given at work,same as footnote 39.

a Estimated as 81% of cashwages (or 45% of total wages).

accounted for about 3% each.39 These findings tally with evidencefound by Carmagnani for the north,40 and by Quiroz for Casa dela Moneda,41 and the road between Santiago and Valparaiso.42 Inall, our own calculations estimate the value of daily food rations atabout $46 per worker per month, depending on the year.

More importantly, based on Tajamares ledgers, we estimatethat for 17941805, the value of the food given at work was, onaverage, 81% of the cash salary (45% of total workers income),not a negligible amount. Thus, we have used this rate (i.e. 45%)to calculate the total nominal salary for 17881808 for unskilledworkers.43 TheresultsareshowninTable2. Indeed, our findingsarein line with thework of Salazar, who estimatedthat forSerena foodaccounted for 37.5% of the total salary in 1792 ($5 in cash, and $3in food).44 Likewise, Carmagnani also found that for skilled miners,the natural salaryaccounted for 32%and 29%of thetotal salaryfor17801789 and 17901799, respectively, while for unskilled min-ers food accounted for a higher rate of total income: 45% and 41%,respectively for the same periods.45

At this point, it is worth mentioning that in order to calculateannual cash wages, we endeavoured to collect average daily pay-ments on a weekly basis. Incidentally, (when available) we foundthat there was no variation in the daily payment withineach week.Unfortunately, for most construction works the daily (or weekly)rate payment was not available, and instead a referential monthly

39 ANCH, Contadura Mayor,FirstSeries, Volumes 1068 (1793), 1069 (1795), 1071(1797), 1072 (1798), 1073 (1799), 1074 (1800), 1076 (1801), 1077 (1803), 1054(18041805).

40 Carmagnani (1963, p. 69).41 Data collected by Quiroz for 1792,1794and 17961802 shows that in the con-

struction ofCasade laMoneda, ofthetotal spent onfood,41% and 34%wasspent injerked beef and bread, respectively. Quiroz (2009, pp. 245246, 256). Bothare verysimilar to the rates we found for Tajamares.

42 Quiroz (2012, p. 108).43 We could not find similar information for other construction works, and cer-

tainlynot forthe constructionworks listedin Table 1. Nonetheless, we believe thatthe situation in Tajamares del Mapocho was representative of the industry as awhole.

44 Salazar (1985, p. 235). See also Quiroz (2012, p. 106).45

Carmagnani (1963, pp. 8283).

rate was reported within the ledgers for each week. Such was thecase for Santiagos Cathedral and Casa de Moneda for 17881805.Thus, when only this monthly rate was available every week, weobtained the daily cash wages assuming that the working weekconsisted of 6 days per week, and that on average a month has4.345 weeks(i.e. 26.07 workingdays per month, excludingreligiousholidays). This is not to say that all peons worked the equiva-lent of 26.07 days per month, but this monthly payment accountsfor the maximum monthly salary they could have obtained hadthey worked all working days within a month. Fortunately, in theledgers of Real Audienciaand Real Casa de Aduana, daily rates werereported every week (i.e. for 18061808).

With the average daily payment we obtained for each year,we multiplied it by 280 days. Why 280? Of the 365 days of eachyear, 52 were Sundays, which leaves a maximum of 313 workabledays only. But, following Allens recommendations,46 we need todeduct religious holidays and also those days when because of badweather workers could not work. Fortunately for us, the accoun-tant of Tajamares was assiduous in recording all non-worked daysfor a wide range of years, information we have not seen elsewhere.Thus, according to the ledgers of Tajamares, for the years 1793 and17981803, there were on annual average 25 religious holidays,andbecauseofbadweatherconditionsandothernon-specifiedrea-

sons, construction works stopped for another 9 days per annum,which would take the actual workable days to around 280 peryear.47 Thus, we have extrapolated these results to the wholeperiod covered by this paper. In the same vein, but with regardto Spain, during the late eighteenth century and early nineteenthcentury, Campomanes estimated that peons worked 270280 daysper annum, which is confirmed by recent research on this topic.48

For Buenos Aires, 290 working days were previously estimated byUrquijo for the same period.49 Beyond the Americas, in 1771 inEngland, 280 days were also estimated as days of work per year.50

Yet, we areaware that this maybe a liberal assumption.51 Whileskilled construction workers tended to work continuously all yearround (or for whatever time they were hired for) on the same con-struction work, unskilled construction workers had a less regular

pattern of work, as was previously found for Santiago de Chileby Quiroz and for Buenos Aires by Johnson.52 It is assumed thatunskilledworkersdid notwork continuously on thesameconstruc-tion work (although we do not know if they worked elsewhere thedays they did not turn up to the construction work they usuallyundertook). Thus, Johnson believes that 245 days per annum is abetter estimate for unskilled workers in Buenos Aires, while Allenet al. and Arroyo-Abad et al. took 250 days for the countries theyanalyzed in Latin America, although no clear explanation is givenabout how exactly these lower estimates were obtained. Indeed,Allen et al. (2012, p. 869) recognize that 250275 is a fair estimate,but they used 250 days for reasons of uniformity only. Moreoverforthe particular case of Chile,Arroyo-Abad et al., despite declaringthatthey assumed 250workabledays per annum, in practical terms

the annual wages they calculated come from the monthly wagesreported by Carmagnani, which are referential wages only, assum-ing miners worked the whole month. Thus, Arroyo-Abad et al. did

46 Allen et al. (2012, p. 869).47 ANCH, Contadura Mayor, Serie I, 1793 (1068), 1798 (1072), 1799 (1073), 1800

(1074), 1801 (1076), 1802(1078), 1803 (1077).48 Garca-Zniga (2011) e stimate d that betwee n 1750 and 1850 there were

approximately 282 workable days in Spain, which is in line with our own data.49 Information reported inJohnson (1990, p. 145).50 Allen and Weisdorf (2013, p. 721).51 And as already highlighted by Allen and Weisdorf (2011, p. 716), it is also rea-

sonable to assumethat theworking numberof days peryear wasconstant. SeealsoVoth (2001) on this topic.

52

Quiroz (2009, pp. 227228) andJohnson (1990, pp. 143144).


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

not multiply daily wages by 250, instead they multiple monthlywages by 12, and therefore whether they believe labourers worked250 or 275 days per annum is of little consequence, if of any at all.Indeed, by taking Carmagnanis monthly wages, they have implic-itly assumed that labourers worked 280290 days or even over300 days per annum.

Overall, the fact that unskilled workers did not generally workthewholemonthonaparticularconstructionworkposesanimpor-tant challenge when calculating actual annual income for unskilledworkers.Johnson, forexample,thinks that in BuenosAiresit is hardto imagine that unskilled peons worked 6 days per week during52 weeks per annum in the same workplace.53 This is reasonableto assume, given the evidence available to us, in particular consid-ering that real wagesin BuenosAires were thehighestin the region(i.e. peons could affordnot to work thewhole week given their highwages). Butwhatis puzzlingfor Santiago is that, if (as we have beentold before) peons received daily wages which were barely enoughto guarantee subsistence, howdid they survive if they didnot workas regularly as skilled workers did? We can speculate that they gotinvolved in other paidactivities besides the construction worktheyusually undertook. Thatis, in aggregate theydid workcontinuously,albeit in different workplaces.54 In any case, we have assumed that280 days is a better estimate than 250 days because in practice it

was possible for unskilled construction workers to work continu-ously had they wanted, and indeed many of them did so regularly.That is, we are interested in the potential annual income of thisgroup.

3. Prices in Santiago and the cost of a bare-bonebasket,17881808

In general terms, we were under the impression from previ-ous works that during the period this article is concerned with,prices in Santiago remained stagnant. That is, at least, the conclu-sion provided by Romano in his renowned work on eighteenthcentury Chile, although he does not provide any data to sup-

port his results.55

Better information is available from Larran andCarmagnani,56 who show that for basic products the picture ismixed, as can be seen in Fig. 2, which is quite different to theimpression given by Romanos work. Indeed, rather than stagna-tion, important fluctuations are observed even in the short run,whichseemstohavebeenfairlycommonduringthecolonialperiodin Spanish America.57

To start with, the price of wheat flour increased dramaticallybetween 1789 and 1800, but remained stagnant later on. Prices of

jerked beef oscillated frequently, but they show a clear increasingtrend towards the end of our period. This is important because, aswe established above, jerked beef and bread were the main staplesof construction workers diet, with the two together constitutingover three quarters of the expenditure on food for the construc-

tion works for which we have data available. As for other productsincluded in the BBB, the price of clothing was also higherduring thelate 1790s than elsewhere, while we could say that only the priceof beans andfirewood remained stagnant duringthe whole period,butof coursewith some annualvariations to note. The implicationsof these price movements for our study are important, as we shallsee later on.

53 Johnson (1990, p. 144).54 Our interpretation at this point is, therefore, at odds with those scholars who

portray Santiagos peons as lazy people. See, for example, Villalobos (1961), Len(2002a,b) and De Ramn (1992).

55 Romano (1965, pp. 3942).56 Carmagnani (2001) and Larran (1992).57

Arroyo-Abad et al. (2012, p. 6).

200.0

180.0

140.0

160.0

120.0

100.0

Jerked beef Cloth Firewood Beans Flour

80.0

60.0

40.0

20.0

0.0

1788

1789

1790

1791

1792

1793

1794

1795

1796

1797

1798

1799

1800

1801

1802

1803

1804

1805

1806

1807

1808

Fig. 2. Prices of ess ential products in S antiago, 17881808 (inde x, where1788=100).Source: Own elaboration from prices found in Carmagnani (2001) for jerked beefand Larran (1992) for all others.

The core of thebare-bone basket (BBB) used to calculateAllensreal wages consists of the cheapest available food in one locale

that provides most of the calories needed for survival to such anextent that the total basket must supply about 1.940 calories and6090 g of protein per day for anadult male.58 For theChilean case,Arroyo-Abad et al. (2012) were able to include in their BBB thefollowing three products: wheat (albeit indirectly),59 jerked beefand cloth (given the prices available to them), but they were notable to include soap, firewood, candles and lamp oil, as originallyintended. Instead, they adjusted the cost of the BBB obtained usingthree products only, assuming that wheat, jerked beef and clothaccounted for 81% of the basket (thus adjusting by the missing19%).60

Given the data we have seen on the actual food consumed byconstructionworkersin the case of Santiago,we have slightlymod-ified this basketby includingbeans, whichwere popular among the

working class. Accordingly, we have reduced the amount of wheatincludedintheBBBsuggestedbyAlleninordertokeeptheintakeofdaily calories constant (Table 3). We have also included the pricesof firewood,61 but we were unable to get prices for soap, candlesand lamp oil, and were also forced (as were Arroyo-Abad et al.)to adjust the value of our BBB, but by 12% only (rather than by19%). Thus, our new BBB accounts for 1938 calories per day (thesame as Arroyo-Abad et al.) and 93g of protein per day (slightlymore than Arroyo-Abads estimate of 89g).

Ascanbeseenin Fig.3, thecost of theBBB increasedimportantlyfrom the late 1790s, mainly due to the significant rise in the prices

58 At this stage,it is worth mentioning that this level of calorieshas been regarded

recently as too low by Humphries (2013).59 Arroyo-Abad et al. did not have prices of wheat at their disposal and instead

used prices of flour. The problem is that they equated the price of wheatto the price of flour. Instead, w e have assumed that the price of flour (perkilogram) was 20% higher than that of wheat. We could not find p rices forboth whe at and flour for Chile (or for other Spanish American cities for ourperi od of study), so we used i nstead prices for these two commodities forNew York, where for 17881808, the ave rage annual difference was 20% infavour of flour. Data available from Centres for International Price Research:http://www.vanderbilt.edu/econ/cipr/cole-historical-data.html. We assume this20% mark up was similar in Chile.

60 Theannualconsumption ofeach product within thebasketused by Arroyo-Abadet al. come from Allen (2001) and Allen et al. (2011).

61 The mos t common fi re wood used in S antiago de Chile was espino (acaciacaven). Based on information provided by theCalifornian Consumer Energy Center(www.consumerenergycenter.org/home/heating cooling/firewood.html) , we haveassumed that espino gave 22 MBTU per cord, and that each cord contained

2500pounds of dryfirewood.
http://localhost/var/www/apps/conversion/tmp/scratch_8/dx.doi.org/10.1016/j.ihe.2014.04.003http://www.vanderbilt.edu/econ/cipr/cole-historical-data.htmlhttp://www.consumerenergycenter.org/home/heating_cooling/firewood.htmlhttp://www.consumerenergycenter.org/home/heating_cooling/firewood.htmlhttp://www.vanderbilt.edu/econ/cipr/cole-historical-data.htmlhttp://localhost/var/www/apps/conversion/tmp/scratch_8/dx.doi.org/10.1016/j.ihe.2014.04.003


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Table 3Bare-bonebasket (BBB) in Chile for an adult male.

Category Good Unit Caloriesperunit

Grams ofprotein

Annualconsumption(units)

Food Wheat kg 3370 88 114Beans kg 1455 71 42

Jerked beef kg 2500 200 105Total (daily) 1938 93

Other Firewood MBTU 3Soap kg 1.3Candies kg 1.3Lamp oil kg 1.3Cloth, linen or cotton m 3

Source: Forjerked beef, firewood, candles and cloth (Allen,2001; Allen et al., 2011;Arroyo-Abad et al., 2012). For wheat and beans, we modified the quantities sug-gested by Allenet al. based onour own evidence as in footnote39.

25.0

20.0

15.0

10.0

5.0

0.0

1788

1789

1790

1791

1792

1793

1794

1795

1796

1797

1798

1799

1800

1801

1802

1803

1804

1805

1806

1807

1808

Fig. 3. Cost ofa BBB for an adult male in Santiago, 17881808 ($ per annum).Source: Fig. 2 for pricesand Table 3 for theproductsweights within theBBB.

of wheat and jerked beef as noted above, which, ceteris paribus,would decrease real wages. But we return to this point in the fol-

lowing section. At this stage, it is important to mention that Allenet al. and Arroyo-Abad et al. multiplied the cost of their BBB by afactor of 3.15. These works have assumed that a family of 4 people(two adults and two children) consumed the equivalent of threemale adults BBB, arguing that the recommended calorie intake ofone man, one woman, and two children is approximately equal tothat of three men.62 We have agreed with this assumption. Thisentails multiplying the individual cost of a BBB by 3.

The other 0.15 comes from the fact that the cost of each BBBwas increased by 5% (0.15 = 0.053), on account of the hypotheti-cal cost of housing. Yet, no explanation is given about how exactlythis rate was reached. Andindeed, it is difficult to estimate the costof housing for unskilled constructionworkers in Santiago given theinformality of the housing market and the patchy evidence avail-able to us.As an example of this complexity, given thelack of sounddata on housing rent, Larran was forced to estimate the cost ofhousing based on the cost of construction materials, thus estimat-ing that for eighteenth-century Santiago the cost of housing was16% of total consumption expenditure.63 For the same period thatthis paper is concerned with, Johnson found that the cost of rent-ing a room in the centre of Buenos Aires between 1790 and 1810was well beyondthe purchasing power of unskilledworkers in thatcity. In anycase, Johnson assumed that the cost of housing was 20%

62 Allenet al.(2012, p. 875). Nonetheless,later on,in a paperpublishedwithWeis-dorf, Allenacknowledged that,at leastfor agricultural workers a familypovertylinecomputed from tripling the costs of a mans BBB was probably insufficient (Allenand Weisdorf, 2011).

63

Larran (1992, p. 122) and De Ramn and Larran (1982, p. 345).

of the consumption basket of all workers in Buenos Aires between1776 and 1811.64 Thus, on account of these higher estimates forSantiago and Buenos Aires, we have increased the cost of hous-ing to 10% of the BBB of unskilled workers, rather than 5% (30% intotal for the whole family). Yet, we recognize that further work isneeded in this area.65 But what is clear is that unskilled construc-tions workerssleptsomewhere andpaid for it, directlyor indirectly.Indeed, accordingto De Ramn (1992,pp. 9395)during our periodof study, together with an increase in Santiagos population, therewas also an expansion of the citys suburbs in order to house thepopulation.

4. Real wages of constructionworkers in Santiago de Chile,

17881808

Allens proposed framework used to calculate real wages con-sists of three basic steps. First, we need to measure the annualwage income of an unskilled labourer (preferably in the buildingindustry). We have done this already, but we have also calculatedthe non-wage income of construction workers in order to obtaina total nominal income for unskilled construction workers in San-tiago. This is an important contribution by itself, which previous

scholars were not able (or willing) to produce.Second, we need to estimate the value of a BBB required for thesurvival of a family of four, implicitly making use of a Laspeyresprice index, since quantities are fixed. We have also done this inthe previous section. At this point, it is worth clarifying that we arenot necessarily assuming that an average working class family inSantiago was composed of two adults and two children. The ratio-nale behind this assumption is to have an indicator of the actualincome a male would need to generate in order to support such afamily, That is, the hypothetical cost of maintaining a whole familyat subsistence level. As has been argued already by Allen, this is anarbitrary assumption about the size of the family, but anyone whoobjects to this assumption66 can ignore it: in that case, the wel-fare ratio is just a peculiarly scaled real wage index.67 In any case,according to Goicovic, in urban centres like Santiago, most housescontained one family only, and, more important for us here, theseurban families, in general, comprised no more than five people.68

In the same vein, according to Carmagnani, in a parish of Curic in1777, there were 1.6children perhome, whilein theMincha parish,there were 2 children per home.69 That is, in any case, a family offour for Santiago during the period covered by this paper seems tobe a reasonable assumption.

Third, we need to calculate real wages, which in this case isthe ratio between the total income of the construction workersand the value of the BBB. That is, we need to estimate the wel-fare ratio, which is the number of BBBs that can be obtained withtheincome of theunskilled labourer. For those unfamiliar with thismethodology, a welfare ratio of one implies that the total wage ofthe unskilled constructionworker is just enoughto affordthe most

basic consumption of a four-person family, or that an unskilledlabourer working full time could earn just enough to support sucha family at subsistence level. If the welfare ratio is below one, thenominal wage is insufficient for feeding, clothing, and housing hisfamily.

64 Johnson (1990, p. 152).65 Forexample, in Allen et al.(2012, p. 875), theybelieved that 5% wasa minimum

rate, recognizing that it couldbe as high as 10%.66 Seefor example Humphries(2013, pp.697 and705), for objectionsto thispoint.67 Allen (2001, p. 427).68 Goicovic (2006, pp. 3334).69 Carmagnani(1967, p. 190). Likewise, Pintohas also provided referential data on

the cost of feeding a family of four in the North, thus assuming that such size was

also a reasonable assumption (Pinto, 2010, p. 374).


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10.0

9.0

8.0

7.0

6.0

5.0

4.0

3.0

2.0

Bricklayers Carpenters

1.0

0.0

1788

1789

1790

1791

1792

1793

1794

1795

1796

1797

1798

1799

1800

1801

1802

1803

1804

1805

1806

1807

1808

Fig. 5. cash wages of skilled workers, reales per day, 17881808. (As in Fig. 1, wehave used themode since most skilled workers were paid themodal rate).Source: See Table 1 andFig1.

9.0

8.0

7.0

6.0

5.0

4.0

3.0

2.0

1.0

0.0

Unskilled Carpenters Br icklayers

1788

1789

1790

1791

1792

1793

1794

1795

1796

1797

1798

1799

1800

1801

1802

1803

1804

1805

1806

1807

1808

Fig.6. Realwages of skilled andunskilledconstructionworkers in Santiagode Chile,expressed as welfare ratios, 17881808.Source: Asin Table 2 and Fig. 3.

income per capita and skill premiums.80 For instance zmucur andPamuk found that for 17901809 the wages of skilled workers inIstanbul were just 88% above those of unskilled,81 and not the100300% gap of Santiago. In the same vein, Allen et al. found thatin China, skilled construction workers during 17691795 earnedwages just 23% higher than unskilled workers did,82 again sug-gesting less inequality than in Santiago. Similar results are found

for London, where skilled construction workers got 55% and 63%morewagesthanunskilled workers for 17501799 and18001849,respectively.83 In Madrid, the capital of the Spanish empire (towhich Chile belonged), in 17501799 and 18001849, skilled con-struction workers obtained 102% and 106% more than unskilled,84

a substantial difference85 but lower than in Santiago (at least if

80 Van Zanden (2009, p. 125).81 zmucur and Pamuk (2002, p. 301, Table 1).82 Allen et al. (2011, p. 12,Table 1).83 Allen (2001, p. 416, Table 1).84 Allen (2001, p. 416, Table 1).85 Indeed, according to data provided by Llopisand Garca-Montero(2011, p. 307),

during 17501799, Madrids skillpremium in the construction sector was the high-

est in Europe, at least forthe 14 European citieswith available data.

10.0

9.0

8.0

7.0

6.0

5.0

4.0

3.0

2.0

1.0

0.0

Buen

osAire

s

Santi

ago

deChil

e1

Santi

ago

deChil

e2

Chle

Arro

yo-A

bad

Poto

s

Mex

coCity

Lm

a

Bogo

t

Fig.7. Realwages (i.e.welfareratios) ofunskilledworkersin Spanish America,aver-age for 17881808.Source: Fig. 4 for Santiago de Chile 1 and 2; Arroyo-Abad et al. (2012) for all others.

3.5

3.0

2.5

2.0

1.5

1.0

0.5

0.0

Santiago de

Chile 2

London Amsterdam Leipzig Vienna

Fig. 8. Real wages (i.e. welfare ratios) of unskilledworkers in Santiago de Chile andseveral European cities, average for 17881808.Source: Fig. 7 for Santiagode Chile2; Allenet al.(2011) forthe rest. Theannual datawas kindly provided by Prof. Robert Allen.

compared to the wages of bricklayers), while in Barcelona theskill premium for construction workers during 17501799 wasjust68%.86

Indeed, at these cash wages, we estimate that the averagereal wages (i.e. welfare ratios) of bricklayers and carpenters for17881808, was 5.0 and 3.3, respectively (Fig. 6), well above the2.1 we found for unskilled workers for the same period. Therefore,these real wages could afford a more than decent living for skilledconstructionworkersin Santiagoat the endof thecolonial era. Theywere,for example,higherthan therealwages of unskilledconstruc-tion workers inLondonduring this period(Fig.8). Thatis, Santiagoscarpenters and bricklayers in particular enjoyed better standardsof living than unskilled construction workers in London, wherereal wages were among the highest in Europe, and indeed Londonwas perhaps the fastest growing city at the end of the eighteenthcentury.

5. Comparing the real wages of unskilledworkersin Santiagowith other cities

At this point, an obvious question arises:how didthe real wagesof unskilled construction workers in Santiago compare with thoseof other cities for the period covered by this paper? One of themain purposes of using Allens methodology was to compare ourresults with those of other Latin American cities and other regionselsewhere. Arroyo-Abad et al. (2012) have already considered part

86

Llopis andGarca-Montero (2011, p. 307).


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Please cite this article in press as: Llorca-Jana, M., Navarrete-Montalvo, J. The real wages and living conditions of construction workers




dealing with is a relatively short one, our findings shed new lightonthe origins of a gap in real wages between developed and devel-oping countries.

Finally, we are aware that it is difficult to extrapolate construc-tion workers real wages in Santiago to the whole of the Chileanlabour market.92 In order to obtain more conclusive results, wewould need to provide evidence that building tradesmen wererepresentative of workers in general. Ideally, we would need tocompare construction workers wages to the earnings of otherworkers in other sectors and regions. Unfortunately, alternativedata on wages and prices is notreadily availableto us.Yet, based onCarmagnanis study, we know that there was an important migra-tion of workers lured by higher wages to the north of Chile. Thatis, the living conditions of construction workers in Santiago do notappear exceptionally highif compared to other sectors and regions.Last but not least, further research is needed on the rural sector, inordertogainabetterunderstandingofallworkerslivingconditionsduring the decades immediately prior to Chilean independence.

Funding

This paper was funded by the Chilean Fondecyt, project1130585, led by Celia Cussen (University of Chile, Department ofHistory), and by the Department of Economics, University of San-tiago.

Acknowledgements

The authors are very grateful to Robert Allen, Celia Cussen,Francisco Vallejos, Paola Revilla, Alex Borucki, Mar Rubio, MauricioFolchi, Claudio Robles, Marcello Carmagnani, Herb Klein, CristinDucoing, Katharine Wilson, Xabier Lamikiz, Alejandra Irigoin andthis journals editors and referees. The paper benefited from com-mentsreceivedinseminarsatUniversidaddeChileandUniversidadde Santiago.

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Llorca & Navarrete 2015