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South of the Border, the Christmas Bonus Is Sacred

Times Staff Writer

As a gardener, Carlos Bonilla Torres endures a series of indignities much of the year.

Clients order him to scoop dog droppings, tote furniture and wash their cars for no extra pay. Some never speak to him except to complain that the grass needs mowing. He bears it all for $134 a week.

But December is payback time. That’s when even Bonilla’s most imperious customers hand over envelopes stuffed with cash. The extra $512 he received this year will allow him to buy new clothes for the family and treat them to a movie. The respect that comes with it: priceless.

“Once a year ... I feel important,” said the 48-year-old father of four. “It makes all my effort worth it.”

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The Christmas bonus is fast disappearing in the United States, a casualty of pay-for-performance and corporate cutbacks. But south of the border, that fat December paycheck is a near-sacred entitlement protected by law and tradition.

Most Latin American nations require employers to pay their workers a year-end bonus, compensation that can equal as much as three months’ salary for some. This so-called aguinaldo -- which means Christmas or New Year’s gift -- is the Spanish-speaking world’s most beloved employee perk. Families build their budgets around it. Labor unions go to the barricades over it. Retailers bank on it. Pro-business advocates don’t dare even hint at reform.

In a region of grinding inequality, it is one of the rare benefits that trickle down to workers such as Bonilla. Mexico City-based retail analyst Marc Monsonego likened aguinaldo to U.S. Social Security, the so-called third rail that officials tinker with at their peril.

“It’s one of those things that you just can’t touch,” said Monsonego, a managing director at Neoris, a consulting firm. “It’s this huge cultural and economic force.”

Indeed, aguinaldo lifts holiday spirits and powers the Latin American retail sector from Tijuana to Tierra del Fuego.

In Argentina, the federal government has accelerated the payment of some public-sector bonuses that it used to hand out in January by a few weeks to boost pre-Christmas spending. Brazilian workers finance their celebrations with the so-called 13th month, the extra four weeks’ pay they get in December. Aguinaldo is the salvation of Central American retailers, said Eduardo Valdez, owner of a small chain that sells music CDs and video games in El Salvador’s capital, San Salvador.

“It breathes life into the Christmas season,” Valdez said. “I don’t know what would become of our sales” without it.

It’s the same in Mexico, where an estimated 25 million workers receive aguinaldo that pumps at least $5 billion into the economy in a matter of weeks, experts say. Consumers discharge old debts and pile up new ones in a frenzy of consumption.

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“I pay as much as I can on my credit cards and use the rest to buy my presents,” said Cesar Onofre, a 28-year-old Mexico City accountant who plans to put every peso of his $373 bonus back into circulation. “I save absolutely nothing.”

Aguinaldo has its roots in religious tradition and political populism in Latin America. Like other nations in the hemisphere, Mexico took what long had been a voluntary practice among some employers to give a little extra at Christmas and turned it into law. Mexico’s 1970 legislation requires all salaried employees to receive at least 15 days’ pay as a bonus that must be paid by Dec. 20 each year.

Workers in Mexico’s powerful public-sector unions have negotiated better deals than that. Teachers receive 90 days’ salary as an annual bonus, as do employees of the nation’s largest public healthcare system. But elected officials really know how to stuff their own stockings. Mexico’s 500 federal representatives received about $8,200 each in aguinaldo this year, and one state governor scored nearly $33,000.

But even gardeners, maids and others who labor without benefits or a formal contract are entitled to aguinaldo. Many of these workers labor part time for several employers, all of whom are supposed to pay a prorated bonus prescribed by law. Cheapskate bosses can be fined or even sent to prison. But in practice, these workers say their year-end premium often depends on the whim of their patrons.

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Gardener Bonilla’s stingiest client handed over $75 this year, and the most generous gave $233. Luckily it all balanced out as he garnered nearly a month’s salary in total.

“It’s like a blessing,” Bonilla said.

Other workers aren’t so forbearing.

Teachers in the impoverished southern Mexican state of Oaxaca went on the warpath this month when officials hinted that they might not have the funds to pay Christmas bonuses averaging about $2,100 each for the state’s 71,000 educators.

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Thousands of teachers abandoned their classrooms and took to the streets, blocking roads, surrounding public buildings and camping out in the historic center of the state capital until the government ponied up.

“It’s something that we need and that we’re counting on,” said Rufino Gutierrez Hernandez, a teacher who participated in the sit-in. “Although it appears to be a lot, the truth is that it’s not very much considering our [small] salaries.”

Even Mexican business groups that have been pushing hard for changes to Mexico’s rigid labor code say they have no interest in tampering with aguinaldo. Labor experts say that it’s because wages here are so modest and that it is an inexpensive way for employers to buy labor peace while appearing bighearted at Christmas time.

More than half of Mexican workers earn less than $13 a day. Thus aguinaldo equates to less than $200 for most of the labor force. Employers simply figure it into the entire compensation package and budget for the extra payout in December.

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Although workers technically would be better off getting higher wages spread over the entire year, most look forward to the year-end jackpot in a region where few have bank accounts and many live paycheck to paycheck.

“It’s the one time of year that people have a lump sum, a bunch of extra cash they can spend on that big-ticket item,” said economist Chris Woodruff, director of the Center for U.S.-Mexican Studies at UC San Diego.

December is a chilly month for auto sales in the United States, but it is red-hot in Mexico as customers flush with aguinaldo head for dealer showrooms. Furniture and appliances are big movers. So are liquor, food and electronics.

But retailers aren’t the only ones angling for a slice of those year-end bonuses. Assaults around the holidays are common in Mexico City, where security guards with shotguns and flak jackets patrol shopping districts and shoppers hide money in their undergarments to foil muggers. And attacks have risen in smaller cities as well.

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Authorities in the city of Zapopan in western Mexico this year unveiled a program called Safeguarding Your Aguinaldo, which provided police escorts to citizens nervous about leaving work alone with their extra holiday pay. The service was a response to 40 reports last year of residents being robbed of their windfalls.

However it leaves their wallets, Mexicans’ year-end bonuses never seem to outlast the festivities, Maria Contreras Romero said.

The 42-year-old Mexico City nurse recently received aguinaldo of 60 days’ salary, or $708, a hefty sum here. But Christmas season is a marathon event in Mexico. It starts with the feast day of the Virgin of Guadalupe, Mexico’s patron saint, Dec. 12 and runs through Jan. 6, the traditional gift-giving day known as Three Kings Day.

Contreras said she and her husband would be so broke by then that they’d be sweating it out until the mid-January payday.

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“We will be praying for the 15th to arrive to get our salaries,” she said. “Because by that time, there won’t even be a shadow left of our aguinaldo.”

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(BEGIN TEXT OF INFOBOX)

Feliz Navidad

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Forget the frozen turkey. Mexican workers get cold hard cash as a Christmas bonus. The minimum required by law is 15 days of extra pay. Some unions have negotiated more.

Number of extra days of pay received by workers in Mexico

Social Security* workers union: 90 days

Teachers union: 90 days

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National Autonomous University workers union: 60 days

Telephone workers union: 60 days

Petroleum workers union: 55 days

Minimum: 15 days

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*The national healthcare system

Source: Times research

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Times researchers Cecilia Sanchez, Carlos Martinez and Alex Renderos contributed to this report.

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