Prices, Wages, and the Cost of Living in Old Republic São Paulo: 1891–1930

Using archival and primary source evidence, this chapter introduces the first real wage series from 1891 to 1930 for Brazil’s most important immigrant and industrial city, São Paulo. This is the first price series, nominal wage series, and real wage series for the city that covers the duration of the Old Republic. While scholars look to Rio de Janeiro evidence to compare Brazil’s cost of living to other southern cone and immigrant-receiving countries, it is preferable to use evidence from the primary destination city. Price deviations between the two cities underscore the need for these series. The results show foodstuff prices increased steadily over the period and more dramatically in the period during and after World War I. Hedonic wage regressions show hourly wages for unskilled, low-skilled, and medium-skilled workers did not increase accordingly. While the decline in real wages tapered off in the 1920s, real wages across skill levels did not recover to prewar levels. This new index suggests the city of São Paulo’s labor market was more integrated with Buenos Aires’s than with Rio de Janeiro’s and that Paulistano real wages did not recover in the 1920s to the extent that they did in other southern cone cities. Given these results, the puzzle as to why migrants continued to flock to the city prove more intriguing. The results also suggest that Vargas-era labor legislation had the potential to greatly improve the lives of the city’s working class, perhaps more so than in other cities.