From the ProMarket Blog on utility services in Chile, the country which is often hailed as a pioneer in privatisation of infrastructure services,
The median wage is 400,000 CLP (Chilean pesos). That means that half of all workers are making $550 or less every month, and the replacement rate for pensions is only 31 percent. In 2019, the price of electric power increased by 19 percent, despite huge decreases in electric generation costs. Part of the explanation is that the private electric companies have a monopoly position and a law-mandated profit of 10 percent. The same thing happens with water monopoly companies. The biggest of them, Aguas Andinas, had a profit margin of 19 percent in 2013.Finally, a public transport fare increase was the last straw. On October 6, the cost of a rush-hour subway ride grew from 800CLP to 830 (from $1.10 to $1.14). Those 4 cents were too much, considering that the average worker is spending as much as 30 percent of his income on transportation. Plus, the fares were already high compared with 47 cents for a metro ticket in Buenos Aires or 45 cents in Lima, the other capitals in Chile’s “neighborhood.”
This is illustration of inequality and market concentration is stunning,
The concentration of wealth is also similar to African countries, with the richest 1 percent of the population capturing 30.5 percent of the total income (and the 543 wealthiest households receiving 10.1 percent of that). In 2012, economist Ramon Lopez calculated that the five richest men in Chile, according to Forbes (including President Piñera), have the same income as the lowest-earning 5 million Chileans.. The beer, tobacco, and domestic air travel markets are each dominated by a single company (with 87 percent, 95 percent, and 74 percent market shares, respectively). And these are just three examples among many; according to the pro-free-market think tank Horizontal, Chileans spend 40 percent of their income in markets without any real competition.
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