SANTIAGO, Aug 29 (Reuters) - Chilean police teargassed protesters and arrested at least 87 on Wednesday, during a large labor march in the capital to demand better salaries and working conditions at a time when the economy is booming.

Several people, including a senator, were injured in scuffles with the police who blocked off the city center.

Thousands of workers from Chile's leading labor federation marched to pressure the government to change laws and improve pay, allowing workers a larger portion of soaring profits in Chilean industry in recent years.

Local television showed Sen. Alejandro Navarro of the ruling coalition with blood pouring from a head wound after he was struck by a riot officer with a police truncheon.

"We are happy with the support people have shown us because it means Chileans are standing up," for their rights, said Maria Rozas, a vice-president for the CUT federation of labor unions that has members across labor sectors.

Chile, the biggest copper producer in the world, has benefited from high prices for the metal in recent years and the central bank has forecast economic growth of around 6 percent for 2007 after a disappointing 2006, when GDP growth slowed to 4.0 percent.

Chile is considered a model economy in Latin America and has one of the lowest poverty levels in the region, but President Michelle Bachelet's government has faced frequent protests from students and workers who say they are being left out of the prosperity.

Last week Bachelet formed a council to propose measures to boost employment, income, competitivity and social equality.

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