South American countries don’t really make the headlines when it comes to mass migration. South American news, in general, is often swept under the rug, brewing many mysteries surrounding their current affairs. Chile is most famously known for its unusual shape, wine, and breathtaking scenery. Politically, Chile has a very incendiary past and is a country split over allegiances to former dictator Augusto Pinochet. Around the Western World, the US has earned itself a disreputable status for its various interventions in South America throughout the latter half of the 20th century. Nobel Prize-winning economist Milton Friedman masterminded many of the economic reforms implemented by Chile from the mid-1970s to this day. When Friedman collected his Nobel Prize in Sweden, he was met by crowds of booing protesters for his advice given to the Pinochet regime.
The one thing shared in common by most countries experiencing the greatest immigration is a relatively developed capital structure. With a developed capital structure, a higher standard of living and higher wages can be enjoyed. And one of the most attractive features of many-a wealthy country is a hearty welfare state. Many migrants pouring into Europe are risking life and limb for their slice of the welfare pie, often netting more a month in government stipends than the annual GDP per capita back home. One of the deepest flaws with a monolithic redistributive bureaucratic superstructure is that it has to be paid for, somehow. Now, retirement ages are being raised in order to delay state pension payments. The bulk of the migrants in Europe do not speak the local language and are totally unskilled. These welfare states tend to have high minimum wages and the increased supply of unskilled laborers prices many native unskilled laborers out of the job market, rendering them indefinitely dependent on the State, increasing the tax burden of the aging middle classes.
Much of Chile’s most recent immigration has been from Haiti. In 2010, Haiti was struck by a devastating 7.o magnitude earthquake which killed around a quarter of a million people and left another 1.3 million homeless, during a massive cholera outbreak. Haiti is a desperately poor nation, whose GDP per capita is a paltry $800, amid constant currency devaluation. Constant job shortages hamper long-term job security and steady economic growth, alongside a healthy fertility rate of 3.03, spelling a rather dismal outlook. A shortage of teachers has resulted in literacy rates of 61% and a widely unskilled workforce. Haiti’s national average IQ is 67, eliminating a vast range of job prospects.
As of August 2016, the Haitian population in Chile had increased by 731%, with only 11% of the new entrants returning home. The PDI (Police Department of Investigations) had estimated in August 2016 that at least 110 Haitians were entering the country every day, 68% of whom are male. Most Haitians enter on a 90-day tourist visa, but stay on once securing any form of employment, exploiting a legal loophole. A recent statistic puts the total figure of Haitians in Chile at 61,000 out of 160,000 foreign workers, up from 44,000 in 2016. Human trafficking investigations have been opened in response to the exploding Haitian immigration figures. Quilicura, an area of Santiago, has earned the sobriquet “Little Haiti” for its influx of new Haitian residents. Due to Creole being their primary language, Spanish language centers offer their services to Haitian migrants. Despite Spanish language centers, plans to introduce Creole-speaking medical staff have been drafted.
Unemployment in Chile is at a respectable 6.6% for South America. However, the average net monthly salary is roughly 861 USD, with a perilously high minimum wage of around 394 USD at July 2016. A supply shock in unskilled labor will see lower wages depressed even further. As the minimum wage is relatively high, further unemployment may result from new entrants to the labor market. Cultural differences may pose a potential danger in the future; given the language barrier, the preponderance of male immigrants and presently forming ghettoization. As many migrants are housed in low socioeconomic areas, new turf wars may arise. Proposals to raise the minimum wage incrementally over the next few years may see an increase in unemployment if current migration trends continue. Unemployment will lead to more welfare consumption, more taxation, and more poverty. For a country working its way into prosperity, boasting the seventh freest economy in the world, it has developed a nasty little habit for handouts. More State dependents and future big government voters are the last thing it needs if, indeed, it wishes to remain the economic torchbearer for South America.
Orwell & Goode
Orwell & Goode (a pun for “all well and good”) is a Youtuber, blogger, and an economics masters degree student. He personally identifies as a paleolibertarian, but extends his support to nationalist movements throughout the Western world. His main interests lie in documenting the decline of the Western world and identifying economic policies which may shape society for better or worse. He is the host of the “All Well and Good Show” and the co-host of news round-up “Waking Up The West” on YouTube.