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Approved For Release 2006/04/19 ; CIA-RDP85T00875RO01700040058-3
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- Because these price increases were concentrated on food items, erosion in the lower-paid workers' real incomes was even more severe. Moreover, as many families probably perceived real wages actually were substantially lower at the end of August than in late 1970 because the true inflation rate clearly exceeded the official calculation. For obvious political reasons, Allende moved quickly to restore workers incomes by granting large bonuses in September and decreeing that the annual wage readjustment advance three months, to 1 October. Wages were boosted by the full amount of the nine-month rise in official price, about 100% — thus returning the official real wage index to its January peak. Inflation continued to rocket during October, however and real wages quickly declined by 15% at official prices and considerably more at black market prices. The Pre-Election Period — A Time for Expedients
- Belt tightening eventually must come in Chile, but Allende will make every effort to delay consumption cutbacks until after the congressional elections in early March 1973. For obvious reasons, Allende is intent on maximizing his show of popular support in what is viewed by many as a plebiscite on his administration. The election's outcome,
Figure 8
Chile: Official Real Wage Index
End of Month Data
* The real wage index cannot be calculated for September when special bonuses were granted to partly offset a rapid rise in official prices. Effective 1 October a 100% wage increase was granted to restore real wages to their January levels by the end of the month, the official price rise had eroded real wages by some 15%.
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Approved For Release 2006/04/19 ; CIA-RDP85T00875RO01700040058-3
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