European Review of Latin American and Caribbean Studies 66, June 1999 I

5-18

Changes in Chilean Social Structure

Class Structure and Income Distribution
between 1972 and 1994
Max Koch 1

As in many other countries since the 1960s, Chile has go ne through great political upheaval and social mobilization. Whether left-wing or right-wing parties,
student or campesino movements, all relevant political and social actors intended to carry out thorough societal reforms. Eduardo Frei's Revolucin en
Libertad (1964-1970) was seen by his contemporaries as proof th at far-reaching
reforms could be established without revolutionary uprising. The supposed
'lack of impact' of these reforms prepared the ground for Salvador Allende's
Unidad Popular (1970-1973). His government accelerated the existing structural interventions until it was deposed in a bloody coup d'tat. It was now the
turn of the right to transform Chile into a laboratory (1973-1990). However,
this time the transition was to a neoliberal doctrine th at took place under the
protection of an authoritarian and virtually all-powerful state which oppressed
any opposition to the now dominant monetarist principles.
Regardless of one's stand on the discussion of development strategies, it is
astonishing th at social scientists have paid so little attention to the social structure of Chile. Since the beginning of the 1980s, when Javier Martlnez and Eugenio Tironi (1982 und 1983) published their very important studies, the shift in
Chilean social structure has remained an almost unanalyzed sociological object. With this paper I hope to make a contribution towards closing the gap in
research.

Political and Economic Development

After the Great Depression of 1929-1931, which considerably weakened the
traditional Chilean export sectors such as copper, nitrates and other mineral
resources, Chile, as other Latin American countries, favoured industrial import substitution (ISI). The state played the key role in the gradual substitution
of industrial imports with domestic products. Industrialization was encouraged, for example, by restrictive customs duties for foreign products, inexpensive loans for domestic investors and state-run infrastructural measures. In
1939, CORFO (Corporacin de Fomento de la Produccin) became the centre
of industrial policy and founded large state-run businesses in all important
economic fields. At the same time, the welfare state was expanded. Since the
1920s, when the national system of social security was introduced, the budget
for social benefits had been increasing. Gradually, an entire infrastructure of

6 I

Max Koch

social services was created for education, health and social security. This period
of reforms reached its peak under the governments of Frei and Allende.
The Christian Democrat, Eduardo Frei (father of the current president),
won the elections in 1964. EconomicaIly, he proposed state interventions consisting of agrarian reforms, partial nationalization of the copper mines, administrative con trol of monopolies and inftation as weIl as export subsidies. On a
politicallevel, Frei began to implement constitutional reform and to democratize the educational system. While the political goals of Frei's Revolucin en
Libertad can be judged as being largely successful, the economic goals we re
harder to accomplish. This was due, among other factors, to the resistance of
the opposition which considered the planned reforms as either going too far
(right-wing opposition) or as not going far enough (left-wing opposition).
In 1970, Salvador Allende was elected president of Chile. His coalition of
different left-wing parties, the Unidad Popular (1970-1973), intended nothing
less than to overthrow capitalism using democratic structures and procedures.
The most radical reforms were the complete nationalization of the copper resources and Gran Mineria, the acceleration of agrarian reforms, and the purchase of large companies and banks. In order to rapidly achieve these structural changes, the government took the risk of an expansive monetary policy. The
state's precario us financial situation was aggravated when the price of copper
on the world markt feIl dramatically during the early 1970s. This negative development culminated in the growth of the black market and a rate of inftation
of over 500 per cent. As a consequence, the democratically elected government
of Salvador Allende was destabilized and finally overthrown in the coup d'etat
of September 1973. 2
Up to this point in time, neoliberal doctrine had existed solely in the theory
of the Chicago School. 3 According to this theory, economy and society should
be based on market forces and on the private sector. Not only was a break to be
made with the supposedly unconstitutional economic and social policy of Unidad Popular but also with industrial import substitution in general. The most
important aspects of the new wave of reforms were the privatization of public
firms and the deregulation of prices and capital and labour mark ets. In the field
of industrial relations, all that had been achieved in terms of labour legislation
since the introduction of Cdigo del Trabajo in 1931 was reversed. The 'authoritarian factory regime' (Diaz 1989) was institutionalized by force and initially
without any legal foundation in the Plan Laboral in 1979. In particular, job
protection against dismissal was abolished and the bargaining power of trade
uni ons was greatly weakened. The most important consequence was the hyperftexibilty of the workforce (GeIler et al. 1994).
The state relinquished con trol of social benefits to a considerable extent.
The military government reduced financial support for the extremely poor
(Jocalizacin). The shift of socio-political regulation from the state to the market was accomplished by: a drastic reduction of the budget for social affairs;
transferral of important social services such as health, pensions, and sections of
the educational system to the private sector; decentralization of the remaining
social benefits policies to local government (municipalidades); and introduction of market principles in the distribution of public spending.
The most important effect of these turbulent political and economie developments between 1964 und 1990 consisted of a shift between two capitalist

Revista Europea de Estudios Latinoamericanos y del Caribe 66, junio de 1999 I 7

modes of regulation, the first being state-protected and oriented towards the
internal market, the latter open and oriented towards the world mark et.

The Transformation of Sodal Strncture

In first decade of the military regime (1973-1983) Chile opened its economy
towards the world market. There was almost no economie growth in this period
and therefore, the left mocked the reforms as 'modernizations on paper only'.
The social consequences, nonetheless, were far-reaching. The social structures
th at had come into being under import substitution we re dismantled. The most
outstanding features of these reforms we re a large in ere ase in open and hidden
unemployment, the de-monitization of wages, de-industrialization and growth
of the informal sector.
However, these trends did not continue. Instead, the economy recovered,
and, from approximately 1988 onwards, began to expand. Unemployment was
reduced, wages improved, a certain level of reindustrialization occurred and
informal employment decreased. The period of destructuring social space was
followed by its restructuring. The most intensive phase of this process of structural change took place around 1982 and came to an end by the 1990s. 4

Population and Employment

As illustrated in Table 1, the total population in general and, even more rapidly,
the number of economically active people increased throughout the entire period. Table 1 also shows the decisive 'conjunctural' points in recent Chilean
history. Although the total population and the number of those economically
active did continually increase, the percentage of people employed in 1982 was
only minimally more than in 1972. In order to assess the real extent of the
employment crisis one has to take into account the fact that the participants in
the 1975-1988 job creation programmes (Programa ocupacional para jefes de
hogar and Program a de empleo minimo) were also counted as 'employed'. For
example, in 1982, 439,000 people were employed in these programmes, so that
the real unemployment rate of th at year was almost 32 per cent. After nine
years of the dictatorship the labour market was literally broken.
However, by the mid-80s, clear indications of economie recovery and restructuring of the labour market became apparent. Official unemployment had
Table 1:

Population and employment (x 1000 and share)

Year

Population Economically
active

1972
1976
1982
1986
1990
1994

10185
10510
11398
12163
12902
13732

SOU/'ce: INE, different volumes.

2981
3182
3661
4270
4728
5300

Share
29.2
30.3
32.1
35.0
36.6
38.7

Employed
2888
2779
2944
3896
4460
4988

Share
96.9
87.3
80.4
91.2
94.3
94.1

Unemployed
93
403
718
374
268
311

Share
3.1
12.7
19.6
8.8
5.7
5.9

8 I

Max Koch

decreased to 8.8 per cent by 1986 allowing the job creation programmes to be
disbanded in 1988. In the 1990s, the rate of unemployment fluctuated at around
6 per cent. In this context, a phenomenon th at has been an important object of
academie dispute about the development theory in the 1980s should be discussed: the decreasing tendency of bath the share and absolute number of
employed wage labourers within the occupational system (see Table 2). Chile
also followed this developmental pattern as this percentage decreased from
almost 70 per cent in 1972 to 48 per cent in 1982. In absolute terms the number
of wage labourers decreased from 2,070,000 in 1972 to 1,771,000 in 1982. This
was mainly due to dras tic cuts in the public sector (-75,000) and a large reducti on in the number of industrial workers (-65,000) (for aseetoral observation,
see Dfaz 1989). However, th ere are indications of recovery in employment
levels from the mid-80s shown by growth in wages. In 1986 the growth of wage
labourers regained the level of the 1970s and has remained stabie up to the
present day.
Table 2:

Destructuring and Restructuring Social Structure in Chile: 1972-1994 (relative

share in occupational system)

Transformation of occupational and social structure

1972

1982

1990

1994

Unemployment
Job creation programs
Level of wage labourers in employment
Industrialization
Growth of informal sector
Middle and higher educational qualifications

3.1
0.0
69.4
24.6
20.9
49.3

19.6
11.0
48.4
12.7
30.2
60.5

5.7
0.0
64.8
16.0
18.8
73.0

5.9
0.0
64.6
16.4
19.2
77.3

Source: Different materials from Instituto Nacional de Estadfstica (INE) and Universidad de Chile.

Social Space and Social Class: A Theoretical Approach

It is necessary at this point to define how the concept of class is used here and

how it is placed within the context of the current debate on social structure. In
the last fifteen years the international discussion has split into two directions.
There is a growing number of social scientists who are proclaiming a society
'beyond status and class' (Beek 1992) or even 'the death of class' (Pakulski!
Waters 1996). Ta their mind, neither the concept of stratification nor the concept of class is able to portray reality any langer; rather, a steady process of
'individualization' is leading us towards a 'capitalism without class'. Instead of
sticking to the idea of antagonism between the classes of capitalawners and
wage labourers, or conceiving social structure in terms of a stratum-like order
according to income, education and prestige, it would be much more adequate
to realize a pluralized structure of inequalities among the members of society.
Consequently, the new approaches in social analysis deal with comprehensive
data such as the development of population and demographic changes; family,
household and biography; level of welfare and social inequality; work and education. However, it should be mentioned that these approaches contain more
and less than traditional class analyses. For example, Stefan Hradil (1987), who
has influenced the German discussion, seems to be content with the statement
of social inequality. In view of the complexity of advanced societies, he favours

European Review of Latin American and Caribbean Studies 66, June 1999 I 9

an exclusively descriptive approach to model social structure. His attempt is

limited to empirical!y marking out the spectrum of social inequality and towards this aim he does not consider it necessary to develop aspecific theoretical approach. Furthermore, he does not mention any kind of conflict, whether
economic, political, or cultural.
Conversely, the defenders of class theory, in Marxist and Weberian tradition,
do not hesitate to cling to their often 'verified and veritable' theories. For example, Thomas Hagelstange (1988) states th at we might continue to derive
class positions directly from Marx's critique of political economy. Unfortunately, his detailed study on the development of class structures in the European
Union and in North America is restricted to class positions. In this structure of
relative positions there are neither indications about the character of class
relationships, nor conflicts due to class antagonism. In addition, Hagelstange
does not offer anything in how to manage other factors of social stratification
such as gender or race within a class-based concept. Non-economic dimensions
that play an important role in the reproduction of a given class society remain a
serious deficiency in Marxist theory.5
Thus, whereas recent sociological contributions to the analysis of the social
structure have revealed a lack of theoretical explanations and a tendency to
empiricism, the discussion among class theorists has revolved for far too long
around th at which Marxists used to cal! the 'correct deviation'. Theoretical
constructions have been taken for granted regardless of their empirical impact.
In my work I have therefore elaborated further on Pierre Bourdieu's theory of
social space because it helps a great deal when trying to find a way out of this
fruitless dispute. In order to develop an empirical!y applicable model to portray social class, gender and income for Chile between 1972 and 1994, I wil!
briefly comment on his construction of social space. 6
For Bourdieu, the social world - and in particular class as a fundamental
mode of social division - exists t!Vice: there is firstly the objective distribution of
material powers (history reflected in distinct fields of society), and secondly the
symbolic representation of th is distribution in form of social taxonomies and
mental classifications (history is embodied in different forms of 'habitus').
Thus, Bourdieu grasps the social space as a kind of topology, as a 'multi-dimension al space of positions' with certain principles of differentiation and distribution (Bourdieu 1985, 724). This space of social positions is made up by the
distribution of the different forms of capital. He aims to enlarge Marx's notion
of capital when he claims that economic capital itselfhas become differentiated
(Bourdieu 1986): owner-occupied flats, possession of an upper category car or
yacht, or holidays in three star hotels are indicators of economic capital, which
- as a consequence - can no longer be understood exclusively by the possession
of the means of production. Social origins and social careers also provide noneconomic types ofresources: social and cultural resources, that is to say, cultural capital either in objectivated, institutionalized or embodied form, which may
serve to achieve and to stabilize one's status.
Regarding the expansion of the education system (an important feature in
the Chilean experience of the last three decades), the reproduction of social
power must be especial!y emphasized. The intrinsic effect of this expansion is
not in the first case an opening in the sense of an overcoming of class society,
but a change in the mode of reproduction of wealth and capital within the

10 I

Max Koch

ruling c1ass, that is, from a directly bequeathed mode into one mediated by
diplomas.
The next problem Bourdieu raises is the way in which the variety of classifying variables can be taken into consideration within the construction of objective classes. To grasp the multi-dimensionality of current class positions, he
operates with a three-dimensional term of class, made up primarily by the
volume of capital (high or low) and by the structure of capital (economic or
cultural). A third dimension is a temporal one: intra- and inter-generational
up- and downward mobility of the various occupational groups. Above all it is
this final dimension that permits the connection of class analysis with current
trends in society.
In addition to this theoretical classification of classes, Bourdieu uses in his
empirical work a range of 'secondary factors' such as gender, race or region.
All these factors inftuence the agent's fate, and, in Bourdieu's words, they are
part of their 'real' definition; yet they remain secondary within a class analysis
and do not have to be considered in their 'nomina!' definition. In other words,
the theoretically constructed categories we use in practical research work always have to be controlled empirically by other variables. In the sense of Max
Weber's differentiation between 'Nominaltypus' and 'Realtypus', it is, above
all, the empirical distance to the theoretically derived class structure that has to
be in the centre of the researcher's interest. This is of special importance for the
notion of the relation of class and gender; the decision for class as an analytical
key concept in the analysis of social inequality can only be justified by controlling it empirically in relation to gender. In order to differentiate the inftuence on
stratification of both class and gender, individual work income is an important
indicator which will be used in the next section.
The class model which I developed for my research of stratification in Chile
follows the classic tradition from Marx to Martfnez insofar as it considers the
possession of the means of production: big and small employers on the one
hand, and wage labourers on the other hand. Wage labourers are differentiated
by their respective positions in the work process due to their supply of cultural
capital operationalized in various educational qualifications. Furthermore, I
will consider the horizontal differentiation of the work itself: whether it can be
regarded as belonging to the manual, commercial or service sector.
In the lower sphere of social space, 'the lower classes', are unskilled commercial occupations (UCO, e.g. shop assistants, typists), unskilled services (USO,
mostly private services like cleaners and waiters) and unskilled manual occupations (UMO, simple manual work in the fields of mining, industry and agriculture). The 'middle classes' are composed of those with vocational training
or technical qualifications and master craftsmen: skilled commercial occupations (SCa), occupations with medium and higher administrative and distributive functions such as credit and financial assistants, foreign trade assistants,

SCO - ski lIed commercialoccupations

SMO skiJled manual occupations
SSO - skiJled service occupations
UCO - unskilled commercial occupations
UMO - unskilled manual occupations
USO - unskiJled services

Revista Europea de Estudios Latinoamericanos y del Caribe 66, junio de 1999 I

11

bookkeepers, data processing operators, skilled service occupations (SSO, e.g.

photographers, doctors' receptionists, laboratory assistants) and skilled
manual occupations (SMO). In the upper region ofthe occupational hierarchy
are the 'academies' (the 'culturally qualified'), the 'professionals' who normally require a university degree (academic professions with a social science orientation), the 'engineers' (highly trained specialists who solve technical and
natural science problems), and 'managers' who control the productive process
and are active in businesses with at least 10 employees. 'Small Employers' are
those who employ less than 10 employees.

Class Structure and Income Distribution: Empirical Evidence

Table 3 illustrates the changes in the occupational and class structure between
1972 and 1994. In this period the number ofthe economically active more than
doubled (N). During the entire period, more than 10 per cent were self-employed, while around 90 per cent we re wage labourers. The percentage of large
employers (managers) increased to more than 2 per cent, while small employers fluctuated to below 10 per cent. Thus, structural change did not lead to a
diminishing of self-employment as had been predicted by class theorists in the
1960s and 1970s. Small employers we re not 'proletarianized' nor did they ascend the socialladder to the 'bourgeoisie' to any considerable extent.
Table 3:

The Space of Occupational Positions: Quantitative Destribution of the

Economically Active by Social Class

Class/Occupational Position

1972

1976

1982

1986

1990

1994

Managers
Small Employers
Academics
Professionals
Engineers
Middle Classes
SCO
SSO
SMO
Lower Classes
UCO
USO
UMO

1.0
10.5
6.2
3.9
2.3
37.8
7.8
16.5
13.5
44.5
7.8
16.1
20.6

1.4
10.0
7.3
3.9
3.4
35.0
7.2
14.9
12.9
46.2
8.2
20.6
17.4

1.4
9.7
9.0
5.0
4.0
36.6
12.4
12.4
11.8
43.3
9.8
19.8
13.7

1.7
8.4
11.6
6.6
5.0
33.0
9.5
11.4
12.1
45.3
9.3
20.4
15.6

2.5
8.8
11.8
7.2
4.6
34.6
9.3
12.3
13.0
42.3
8.9
17.7
15.7

2.3
9.3
13.4
7.2
6.2
35.4
9.4
12.5
13.5
39.6
11.2
14.6
13.8

100.0
972.0

100.0
1009.0

100.0
1069.0

100.0
1335.0

100.0
1613.0

100.0
2001.0

Total
N (1000)
Souree: Universidad de Chilc.

When considering wage labourers, the data from the Universidad de Chile
permits more detailed observations. It can be seen immediately th at de-industrialization did not continue. In fact, the productive sector (SMO und UMO)
decreased from 34.1 per cent in 1972 to 27.3 per cent in 1994. However, aftel'
reaching its lowest level in 1982, the productive sector has ris en steadily. Furthermore, a move towards higher education within the manual working context can be obsel'ved: whereas in 1972 the majority of manual workers had low

12 I

Max Koch

level qualifications, in 1994 almost 50 per cent of manual workers had basic or
middle level education. As regards qualified manual workers, re-industrialization has already been accomplished: in 1994 the SMO-share had returned to
1972 levels. Commercial work (SCO and UCO) rose from 15.6 to 20.6 per cent.
It is interesting to note th at in this work context, more employment was created
for the lesser qualified than for the better qualified.
The sbare of tbe service sector (SSO and USO) in the work force remained
stabIe (one third) until1982 and then decreased to 27.1 per cent in (1994).7 It is
necessary to distinguish between the developments in the qualified and less
qualified sections of the service sector. Until the post-crisis period of 1986, the
number of unqualified services (of which the majority consisted of simp Ie personal services, sucb as domestic help and shoe cleaners) increased, but with the
recovery of economy, they again decreased to 14.6 per cent in 1994 (tbe lowest
level during the period of this study). Conversely, the qualified section of th is
labour context initially suffered from rationalization and then, in 1982, from
the crisis. Although there is new demand for these jobs due to tbe restructuring
ofthe economy, their share is still 4 per cent below that of 1972. In the first place
the so-caIled 'undesirable jobs' in the service sector have survived and not so
many weIl-paid jobs requiring high level skilIs.
Observation of movements witbin the different classes of wage labourers
shows a tremendous rise in the number of workers with an academic education.
Between 1972 and 1994, tbeir relative share more than doubled, while in absolute terms the number of graduates increased from about 75,000 to 270,000. In
the same period, the percentage of less qualified workers who have little inftuence on the labour process decreased by 5 per cent. Conversely, the middle
classes remained stabIe. Therefore, the jobs created during the structural
change we re not simple manual work, rather they required a high level of
education. One could speak of an 'intellectualization' of the work force, since
the occupational system demanded higher education to an increasingly greater
extent. This development had, of course, an impact on the educational system:
on the one hand, it bad to supply the occupational system with weIl qualified
labour and on the other hand, social agents had to adjust their educational
strategies to the new situation.
If one considers gender in the observation of the Chilean occupational system (Tables 4 and 5), one immediately se es that it consists of two thirds men
and merely one third wamen. If employed, women are under-represented in all
attractive occupational positions: only 7.6 per cent are self-employed, in comparison to almast 14 per cent of men. In particular, the share offemale managers throughout the whole period of observation was below 0.5 per cent. Conversely, male managers increased to over 3 per cent. The distribution of female
labour in the lower classes is also characteristic. Whereas the percentage of
men in unattractive professions remained relatively stabIe (between 31 und 34
per cent), in 1986, that of wamen was still more than 60 per cent, decreasing to
51.9 per cent in 1994. Thus, the working class was composed largely of wamen,
with manual labour remaining a male domain. Conversely, one woman in
three, and in the lower classes, one woman in two worked in tbe unqualified
service sector (USO). In 1990, 77 per cent of this occupational group consisted
of empleadas domsticas. 8 At the beginning of the 1990s, 151,000 of a total of

European Review of Latin American and Caribbean Studies 66, June 1999 I
Table 4:

13

The Space of Occupational Positions: Men

Class/Occupational Position

1972

1976

1982

1986

1990

1994

Managers
Small Employers
Academies
Professionals
Engineers
Middle Classes
SCO
SSO
SMO
Lower Classes
UCO
USO
UMO

1.7
13.0
6.2
3.3
2.9
44.4
7.5
16.3
20.6
34.7
6.0
6.6
22.1

2.0
12.1
6.9
2.7
4.2
39.4
7.6
13.3
18.5
39.6
6.5
15.1
18.0

2.1
10.8
8.6
3.5
5.1
43.1
13.1
12.1
17.9
35.4
7.2
11.8
16.4

2.6
10.8
10.3
4.0
6.3
40.5
10.1
11.7
18.7
35.7
5.7
12.9
17.1

3.6
10.4
10.9
5.4
5.5
42.5
9.8
12.4
20.3
32.5
4.8
9.4
18.3

3.1
10.7
13.5
5.3
8.2
42.3
9.1
11.6
20.6
31.4
6.9
8.4
16.1

100.0
600.0

100.0
658.0

100.0
659.0

100.0
813.0

100.0
979.0

100.0
1238.0

Total
N (1000)
Souree: Universidad de Chile.

Table 5:

The Space of Occupational Positions: Women

Class/Occupational Position

1972

1976

1982

1986

1990

1994

Managers
Small Employers
Academics
Professionals
Engineers
Middle Classes
SCO
SSO
SMO
Lower Classes
UCO
USO
UMO

0.1
6.4
6.2
5.0
1.2
27.2
8.4
16.9
1.9
60.1
10.6
31.3
18.2

0.3
6.1
8.1
6.3
1.8
26.7
6.4
17.9
2.4
58.8
11.5
31.0
16.3

0.3
7.6
9.8
7.6
2.2
26.2
11.2
1.9
56.1
13.9
32.6
9.6

0.4
4.6
13.6
10.5
3.1
21.1
8.6
10.9
1.6
60.3
15.0
32.2
13.1

0.8
6.3
13.1
10.0
3.1
22.2
8.6
12.1
1.5
57.6
15.3
30.6
11.7

0.4
7.2
13.5
10.2
3.3
26.9
10.0
14.9
2.0
51.9
18.5
23.3
10.1

100.0
372.0

100.0
351.0

100.0
409.0

100.0
521.0

100.0
633.0

100.0
762.0

Total
N (1000)

13.1

SOUTee: Universiuad de Chile.

633,000 female wage labourers worked as nannies or as domestic help in private households.
One positive aspect is the fact th at women are equally represented in the
field of 'academies'. In fact, the percentage of th is group within the occupational system had doubled for both sexes by 1994. However, the same gendered
distribution of work can also be found in this inftuential occupational section:
in 1994 two thirds of all men were working in professions requiring a scientific
education (engineers), wh ere as this was the case for only one third of the women. Women were more likely to be profesionales with social science university
degrees (professionals): administrative managers, asistentes sociales, library
supervisors, and psychologists.
Table 6 illustrates the distribution of individual income 9 of the various social
classes. The changes in the average income, evaluated using a relative percent-

14 I

Max Koch

age of the income of different classes and occupational groups, are directly
affected by economic factors: the 1974-75 recession led to a reduction of average income (1976), and average income doubled during the first boom (1982).
The crisis of 1982-83 also had a powerful impact on income: between 1982 and
1986, average income decreased from 313 to 193 dollars per month. The income level of 1982 was not regained until the 1990s. In regard to wage levels,
therefore, this was truly a 'lost decade'.
Table 6:

Class Positions and Individual Income 1972-1994 (US$ from 1994)

Class/ Occupational Position

Managers
Small Employers
Academics
Professionals
Engineers
Middle Classes
SCO
SSO
SMO
Lower Classes
UCO
USO
UMO
Average

1972

1976

1982

1986

1990

1994

772
330
500
356
649
188
166
232
155
116
191
86
115
170

996
336
429
298
579
131
114
173
112
76
135
57
70
156

2090
536
932
632
1317
258
252
352
198
151
246
130
127
303

959
337
522
350
747
158
149
211
130
97
147
81
89
193

2046
562
705
484
1056
234
219
323
181
145
196
124
141
318

2223
499
654
589
728
289
304
335
249
199
235
179
190
361

SOllrce: Universidad de Chile.

The differences in income between the various groups correspond with theoretical predictions: businessmen and managers in large companies earned a
great deal more than those with smaller businesses. Significantly, the difference
in income between these groups increased steadily: a manager in 1972 earned
six times more than a worker in the lower classes, whereas in 1994, he or she
earned eleven times more. In comparison to the ave rage income, the wage gap
factor was 4.5 in 1972 and 6.1 in 1994. Therefore large-scale entrepreneurs and
managers can be viewed as the principal beneficiaries of Pinochet's 'modernizations'. Furthermore, the greatest redistribution of income from the lower to
the upper classes took place in the late 1980s and early 1990s. In 1986, after the
structural crisis had abated, the income of entrepreneurs was 'only' five times
more than the average income, barely more than 1972. The crisis therefore led
to a temporary reduction of income inequality on a very low level. It was not
until the transition to an 'active' world market strategy (from 1986) that differences in income increased dramatically.
The class model is also applicable to wage labour: academics have a three
times higher individual income at their disposal than the middle classes and
earn four or five times more than the lower classes. Unlike the comparison of
managers and wage labourers, the income difference does not increase
through the course of time. A phenomenon weil known to sociologists can be
found when regarding academics: graduates with a natural science or technical
orientation often earn twice as much as those with social science specialities.
Also an analysis of the middle and lower occupational spectrum demonstrates

Revista Europea de Estudios Latinoamericanos y del Caribe 66, junio de 1999

I 15

the importance of the ownership of educational capital. From 1982, the qualified workers in every occupational group earned more than unskilled wor kers.
The consideration of female versus male employment in the analysis of income distribution (Tab les 7 and 8) indicates that women earn far less for the
same work than men. Therefore the average income of women is half of that of
men, and so many more women live in poverty. Specifically in the case of women, the distribution of income follows the theoretically expected path.
Throughout the whole period, within the same class, men have a higher income
than women. At the same time the initial decision to give class analytical priority and to treat gen der as a 'secondary factor' is justified in view of the fact
that at no point does a lower-ranked male occupational group earn more than a
higher-ranked female group. The finding th at women's income, like that of
men, doubles when ascending from the lower and middle classes to the academies and managers is in line with the cultural capital thesis.
On the who Ie, economie restructuring and class structure has had a tremendous influence on the distribution of income. During the crises of 1974-75 and
Table 7:

C1ass Position and lndividual lncome 1972 - 1994: Women

Class/ Occupational Position

Managers
Small Employers
Academics
Professionals
Enginers
Middle Classes
SCO
SSO
SMO
Lower Classes
UCO
USO
UMO
Average
Source: Universidad de Chile.
Table 8:

1976

1982

1986

1990

1994

565
220
304
223
412
155
100
193
91
90
180
62
88
130

463
205
248
230
311
130
93
146
107
73
153
45
68
111

1184
427
614
517
956
290
260
344
187
177
317
120
179
269

1523
204
360
308
542
146
133
165
100
106
182
79
83
161

854
352
518
416
848
228
176
277
206
151
237
111
141
235

1000
296
470
458
509
258
232
289
180
188
254
147
162
255

Class Positions and lndividual lncome 1972 - 1994: Men

Class/ Occupational Position

Managers
Small Employers
Academies
Professionals
Engineers
Middle Classes
SCO
SSO
SMO
Lower Classes
UCO
USO
UMO
Average
Sow'ce:

1972

Universidad de Chile.

1972

1976

1982

1986

1990

1994

776
365
591
435
683
207
221
262
164
147
211
134
135
200

1036
395
556
390
663
158
150
213
138
109
146
104
98
218

2216
638
1237
874
1482
332
327
464
270
222
247
208
220
442

944
403
715
483
863
200
198
287
155
118
132
109
121
264

2220
649
877
597
1148
282
342
390
201
168
153
172
170
420

2451
588
783
763
795
317
379
386
263
236
232
252
229
468

16 I

Max Koch

1982-83 the ave rage income reached its lowest point. Conversely, the highest
values were measured at the end of periods of economic growth (1982 and
1994). As income differences became more pronounced in the last 25 years, so
has class stratification. Even wh en the criteria elaborated from class theory are
equally relevant to female employment, gender domination has also played a
crucial role on the wage levels of women.

Conclusion
The shift from import substitution to an open economy which is integrated into
the world market has had a de ep impact on social structure. The crisis of 198284 was the turning point for all the indicators of social change considered in this
analysis. Between 1973 and 1984, the social structure of Chile experienced a
period of destructuring, but since 1985 there has been a restructuring of social
space. In detail, the development of the population and the economically active showed an increase of wage labourers within the labour force after 1983.
The quantitative distribution of the economically active over class and occupational position indicates that throughout the whole period of observation 10
per cent we re self-employed. The number of large-scale entrepreneurs and
managers more than doubled. One of the most striking shifts within the workforce is the intellectualization which can be seen when regarding 'academics'.
The expansion ofthe 'intelligentsia' within the occupational system was almost
exclusively carried out at the expense of the unskilled lower classes. The productive, commercial and service industries showed a tendency towards de-industrialization until the mid 1980s. This shift in turn reached its conclusion and
then changed into re-industrialization from which skilled industrial workers in
particular benefited.
The distribution of income illustrates the class barriers of Chilean social
space. Both the criteria 'number of employees' in the case of entrepreneurs and
'educational capital' in the case of wage labourers had an important significance for the distribution of income. Even though the effe cts of structural
change are more or less the same for men and women, the Chilean labour
market could not be fully understood without the consideration of gender.
Women with the same skills as men work in lower occupational positions and
are paid less. Only 30 per cent of women are active in the occupational system,
and of these, between 50 and 60 per cent work in the lower spectrum ('lower
classes'). The unskilled service sector is still a female domain, particularly basic
private services. The lower average income of women has led to over- proportional poverty.
When the junta stepped down, it had not only transformed the country politically and economically, it had also provided Chile with a qualitatively new
social structure. lts essential characteristics are the structural strengthening of
the class position of entrepreneurs and the weakening ofwage labourers. In the
1960s, social structure was subdivided quite clearly into wage labourers with
relatively high homogeneity and considerable class consciousness in the formal
sector, informal cuentapropistas, the landed gentry and the industrial bourgeoisie. However, these sociological categories are less useful today. Conversely, the restructuring phase of Chilean social structure is generally characterized

European Review of Latin American and Caribbean Studies 66, June 1999 I

17

by a differentiation of all social sectors. Compared with the class-based political struggles of the 1960s and the early 1970s, collective organization of the
different interest groups is less likely today. Although the majority of wage
labourers have suffered from the increasing flexibility and deregulation of labour, this has not led to increased solidarity but rather to rising competition
amongst the workers themselves. Hence, the reinforcement of class inequality
and the differentiation and individualization of social agents in current neoliberalism must be understood as two sides of the same coin. The social structure
of Chile, following the neoliberal transformation, can be understood as having
evolved into a flexible and pluralist class society.

***
Max Koch is a researcher at the Department of Sociology, Freie Universitt
Berlin. One major research project concerned changes in Chilean Social Structure, and was carried out in cooperation with the 'Programa de Economfa del
Trabajo' (Santiago de Chile). This project was sponsored by the Deutsche Forschungsgemeinschaft (DFG). The report of the study was recently published in
German ('Unternehmen Transformation. Sozialstruktur und gesellschaftlicher Wandel in Chile', FrankfurtiMain: Vervuert 1998). Another research project
concerns aspects of social exclusion and marginalization in a comparative perspective.

Notes
1.

2.

3.

4.

5.

The empirical work was carried out in 1995/1996 when I was a fellow at the Program a de
Econom[a del Trabajo in Santiago de Chile. The research project was financed by Deutsche
Forschungsgemeinschaft
It is not my aim here to discuss in detail the different factors that led to the coup. These
historical events th at culminated in the democratic crisis in 1973 are presented by Garretn
(1993) and Larrain/Meller (1990).
When Margaret Thatcher proclaimed her visions of an economy freed from bureaucratie
obstacles of the Fordist welfare state and built on the ambition of the individual in her 1979
electoral campaign, she was ab Ie to e1aborate on the experience of the Chilean 'laboratory'.
See Valds 1989 and OsoriolCabezas 1995 for the important infiuence the University of Chicago had on Chilean economists.
Elsewhere I have commented on two other tendencies which particularly indicate the new
type of Chilean capitalism: the development of tertiarization and growth of the informal sector
(see Koch 1998a, chapter 4.4 and 4.5 and Koch 1998b, p. 206 ff.). Up to 1982, tertiary and
informal occupations increased, but trom then on they decreased in their relative share in the
occupational system respectively. In regard to the informal sector, a significant aspect was a
change in its intern al composition: while in the 1970s sm all businesses and cuentapropistas
made up the lion's share, in the 1980s, wage labourers made up the larger share. Furthermore,
due to fiexible labour legislation there was no longer a large wage gap between formal and
informal employment. Formality no longer necessarily indicated good jobs and inclusion, and
informality no longer indicated undesirable on es and exclusion. This finding corresponded
with the observation of a new characteristic of poverty: whereas in the 80s poverty mainly
coincided with unemployment, in the 90s, two thirds of the poor have work and are active in
the formal occupational system.
Erik Olin Wright's approach is a very important exception to this rule. He not only attempts to
systematically consider factors such as education in his theoretical approach, he also aims to
con trol his models empirically. Some of his theoretical assumptions, however, are problematic. His game-theoretical approach and his notion of 'exploitation' according to Roemer's

18 I

6.
7.
8.

9.

Max Koch

general theory has not turn out to be convincing in the debate so far (see Wright et al. 1989 and
Koch 1994, p. 87ff.).
For more detailed presentations of his approach, see Bourdieu 1985, 1986 and Koch 1996.
Additionally, it should be mentioned that the majority of market-oriented services here are
listed under 'commercial work'. Personal and public services are counted as 'service work'.
Nothing could objectify male domination of Chilean labour market more characteristically
than the number of empleados domsticos: In 1990 there we re 395 masculine nanas in greater
Santiago; that is 0.04 per cent of all economically active men.
With thanks to the departamento de economia of the Universidad de Chile for supplying me
with the income distributions in US$ for all years adjusted to the level of 1994. I would like to
qualify this by stating that the per capita income comes from different sources, including state
transfers and capital income. Since the latter is typical for managers, the dollar values which
appear in Table 6 do not express the real income inequality within this class. In reality there are
dollar billionaires in current Chilean capitalism whose income sterns not from 'wage labour' in
the statistical sense, but from interest and dividends.

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