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 Figure 8

End of Month Data

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, 