By Genesis Carrero Soto
Caracas, Dec 3 (EFE).- An end-of-year bonus that once allowed Venezuelans to splurge on expensive items and throw lavish Christmas parties has lost all value and significance due to the steady erosion of consumers’ purchasing power.
Four years of hyperinflation have caused the value of the bolivar to plummet and exacted a particularly hefty toll on wage workers, with the minimum monthly salary of 7 bolivars (equivalent to $1.50) now virtually worthless.
Three redenominations of the national currency this century and other policy shifts, meanwhile, have failed to bring price rises under control and resolve the country’s economic woes, which the country’s leftist government blames on harsh sanctions imposed by the United States.
Article 131 of the Organic Labor Law establishes the parameters for the payment of the Christmas bonus, or “aguinaldo,” in Venezuela and states that it should be equivalent to a minimum of 30 days of salary and a maximum of 120 days.
In the past, when the oil-rich country’s high standard of living was the envy of its neighbors, an additional payment of four months of salary was a much-welcome influx of cash.
Now, a minimum-wage worker receiving 120 days of additional salary gets a paltry 28 bolivars (roughly $6 at the official exchange rate).
“If there’s good remuneration, the worker receives a good salary. And then he’ll have a nice year-end bonus, but in Venezuela with this issue of hyperinflation and the destruction of salaries … the benefit is insignificant,” Leon Arismendi, an attorney and labor law professor, told Efe.
One salaried worker, Rosaura Uzcategui, has worked in the civil service for the past 25 years and receives a salary that is near the high end of the scale for the public sector.
She said she once received a sizable year-end bonus but that now it amounts to less than $7. Uzcategui also is paid a separate bonus worth around $20 that was negotiated with her boss outside the scope of the law as a means of “helping employees.”
“In years past, you’d earn quite a lot. I’d get four months of income and the truth is I bought all kinds of things, even a kitchen, but not anymore,” she told Efe.
An employee of an electronics store, Juan Carlos Toledo, told Efe he expects to receive a bonus of more than $100 but that he is sure that no matter what he gets it will not go as far as in previous years.
“I believe and trust that this has to end at some point. One day, Venezuelans have to earn what they deserve because that’s what people work for in every country,” Toledo said.
Due to de facto dollarization, observed at store counters that list prices in greenbacks, many Venezuelans have opted to buy and sell merchandise in the informal sector as a means of making ends meet.
Indeed, according to a study carried out by the Andres Bello Catholic University’s Institute of Economic and Social Research and published last month, 84.5 percent of Venezuelans now work in the informal sector.
Yurmi Garcia, an informal worker, also said she relies on remittances to pay the bills, a key source of income for people in Venezuela after millions of people emigrated in recent years in search of better opportunities abroad.
“I have children outside the country, and they send me (money). And I’m helping myself out as much as I can,” she told Efe. EFE