Mexico's "Christmas bonuses" illustrate - and reinforce - persistent earnings gap

Mexico is a nation of the very rich and the very poor. Most people fit nicely into the latter category. The average monthly salary of a local police officer, for instance, is about 4,000 pesos. Assuming an exchange rate of 13 pesos to the dollar (it's actually been a little higher than that recently, due to a weaker euro), a policeman earns just over $300 USD per month. Of course, most of them have to support families on that.

It should come as no surprise to anyone that thousands of local cops have been bought off by organized crime for years. That's one of the main reasons why president Felipe Calderón turned to the Mexican armed forces to lead the war against the drug cartels, which he launched in December 2006.

There is a middle class in Mexico, especially when measured by the lack of such in many Latin American nations. But earnings here remain low. A recent study I posted (link below) showed that the average monthly income in 2010 was 8,605 pesos -- about $660 USD. Millions earn only a fraction of that. It's one more reason why there is a rising tide of extortion in Mexico. For many, there is no other way to survive (see link below).

Not surprisingly, Mexicans look forward to every little perk of the job to which they may be entitled. There is a curious institution in this country called the aguinaldo, best translated as "Christmas bonus." I have no idea whether it exists in other Latin nations. But payment of the aguinaldo is mandatory under the law here -- or at least every Mexican from the housekeeper on up will tell you it is. Government employees receive aguinaldos, as do those who work for companies and larger businesses. Smaller enterprises are supposed to pay the bonus, but many don't simply because they lack the resources. Self-employed persons and sole proprietorships, including millions of artisans, vendors and itinerant merchants, don't get an aguinaldo from anyone. So it's one more cultural establishment which serves to increase rather than diminish profound economic disparities which are part of this country's history -- and which are very much at the heart of its narcoviolence.

Everybody awaits the coveted aguinaldo this time of year, not the least of which are those at the top of Mexico's federal government. The Supreme Judicial Court ministers (judges) will receive a bonus of about 470,500 pesos, or $36,000 USD. Mexico's chief executive, Felipe Calderón, will find a check under his Christmas tree for a tidy 396,500 pesos, or about $30,500 USD. Reason enough to celebrate, unless you're on the outside looking in. Most Mexicans must work for years to earn such amounts.

Feliz Navidad, señores y señoras del gobierno.

Almost half of Yucatán is impoverished: http://mexicogulfreporter.blogspot.com/2011/10/crushed-by-poverty-yucatan-style-crime.html.
How much do Mexicans earn?: http://mexicogulfreporter.blogspot.com/2011/10/average-mexican-8605-pesos-per-month.html.
Mexican extortionists will target anybody: http://mexicogulfreporter-supplement.blogspot.com/2011/11/life-sentence-for-mexican-extortionists.html.

Footnote on exchange rates: The U.S. dollar closed out another good week against the peso, in response to endless economic uncertainties in Europe and the questionable future of the euro, which lost ground to the peso. In Mexico City banks today buyers of dollars paid up to 13.8 pesos, and sellers received a minimum of 13.3 pesos in return.