Improving the quality of life of Venezuela’s urban and rural workers has rightfully been a central element of the Bolivarian Process since its inception. Many studies have documented the undeniably progressive reforms achieved by the working class in wages, workplace conditions, grassroots organization, and social security during Hugo Chávez’s governments (1999-2013), while social indicators reflected their positive impact on the country and region.
It is true that Nicolás Maduro (who frequently reiterates his own working-class background) has been forced to pragmatically deal with severe fiscal squeezes caused by a stagnant oil rent, a crippling imperialist blockade, and seven consecutive years of economic recession.
However, it is also true that his government has looked to create wiggle room by implementing austerity measures and an anti-worker agenda instead of countering the blockade by deepening the revolutionary process and empowering the people. Privatizations, liberal macro-economic reforms, regressive tax policies and exemptions, dollarization, worker persecution, the violation of collective contracts (1), and the almost complete removal of price controls and subsidies have all been increasingly present in the government’s agenda since the blockade took shape in 2017.
These rollbacks, coupled with often confusing and inconsistent government rhetoric which mixes declarations of working-class support with concessions to private capital (both national and transnational), were a major factor in the breakup of the pro-government coalition last year. During this process, a handful of leftwing organizations, including the Venezuelan Communist Party (PCV), opted to distance themselves and draw the line under such policies.
This assessment may come as a shock to those who remain set in an outdated or kneejerk characterization of the country’s socio-economic-political situation. However, and without ignoring the harsh conditions exacerbated by US sanctions and other high-intensity imperialist attempts to steer Venezuela’s leftwards path to the right, the concrete reality of the government’s anti-worker reversals unfortunately speaks for itself.
From secure wage income to uncertain bonuses
One of the lesser-documented rollbacks has been recent wage restructuring: a process known as bonificación.
Bonificación is the systematic substitution of contractual wage income with often sporadic, unofficial, and non-transparent bonuses (workplace or other). This replacement is achieved by freezing contractual wages or applying below-inflation real wage reductions, while at the same time hiking up bonus schemes. The result is that bonuses make up an increasingly large percentage of people’s net income and contractual wages an ever more insignificant percentage.
On the margins of Venezuela’s Constitution and collective labor contracts, this process has been applied to swathes of mostly public-sector workers since 2016 (2). While bonus schemes were admittedly born out of seemingly well-intentioned efforts to shield Venezuela’s workers from the economic crisis, their recent scope and scale show that they have become a wage restructuring instrument for authorities.
For active workers, the uncertainty this policy creates has added to the anxiety and desperation caused by inflation-battered wages and resultant effects of the economic crisis, including the need to take up second jobs and cut back family spending. Furthermore, it has plunged pensioners, to whom very few of the bonuses apply, into severe economic straits.
The restructuring also constitutes a deterioration of workers’ rights through the liberalization and relaxation of labor relations and wage income rigor, hardly the policies one would associate with a socialist government.
Implemented in a covert and creeping manner without official announcements or internal workplace memos, the policy’s systematic application begs the question of whether closed-door strategic planning has pointed the labor market in this direction or not.
Some trade unions, grassroots organizations, and the PCV have blasted the policy, with the latter warning of a “dangerous, negative two to one bonus [to wage] proportion” back in 2016. The Communist Party also denounced a “fraud” in oil worker’s new collective contract this year, saying that “most of [worker’s] income will come through bonuses which do not have a wage income nature.”
Bonificación as a “psychological instrument” for manipulation
One of those experiencing this silent change is Gabriela Rodríguez (3). A left-wing activist, Rodríguez is a teacher with nine years of experience. She currently works in the state-run Samuel Robinson teacher-training university.
She told VA that her current net monthly income is around US $12 (equivalent to roughly three large cartons of eggs (4)). Currently, 20% of this income comes through her contractual wage and 80% from bonuses (5). This marks a stark shift from 2016, when she received 99% of her roughly US $100 income through her wage.
Without prior warning, a range of new bonuses abruptly started to arrive in her paycheck over the last six months, such as the Simon Rodriguez educational workers’ bonus ($3.68, monthly) and the Home University bonus for pandemic-induced remote schooling ($1.38, sporadic). She additionally receives bonuses through the Homeland Card (6), such as the Homeland Household bonus (floating depending on family size but in her case $0.82, monthly). Ironically, hard-fought workplace rights, such as medical or funeral insurance, have all but disappeared.
Despite recognizing the alleviating impact of the additional income, Rodríguez is critical of bonificación, seeing it as a “complementary factor” to the government’s failure to address a fierce drop in real wage income.
She goes on to describe how the sporadic nature and uncertain sustainability of the bonuses have deepened a clientelistic relation between the workforce and the bosses (the state in her case). She also admits to feeling political and workplace pressure as a result of the bonuses, with “indirect threats” of cutting the extra income at any moment being made.
“There is a direct connection between the bonuses and the government’s policies. The government looks to keep the workforce happy but at the same time manipulate the most desperate working population through this policy,” she explains. “People won’t be able to complain if they [the bonuses] disappear as they are not a formal element of our wages,” she adds, going on to describe the policy as a “psychological instrument.”
Equally, Rodríguez comments that her family life has been affected. “As the income isn’t formal like my wage, we don’t know when or if it will arrive. I can’t count on this income as it’s not guaranteed.” She even admits to having to leave IOU notes in her local food store until the next bonus arrives.
Deeply unpopular and a banner of class struggle
Likewise, Yosmely Dávila is also critical. She has worked for eight years as a service specialist in the state-run telecommunications firm MOVILNET.
Only 2.6% (around US $1.80) of her net monthly income of US $70 comes from her contractual wage. The rest is made up of recently introduced workplace bonuses and monthly food bags with a market value around $50, as well as Homeland Card bonuses. As with Rodríguez, 99% of her 2016 net monthly income came through her regular wage.
Dávila told VA that she has not been paid since February and, due to bonificación, worries that workplace bonuses and food bags will not be taken into account when the arrears finally arrive. As a result, the single mother stands to lose around 88% of her net monthly income over the past three months.
As with the educational sector, MOVILNET’s collective contract has expired and is currently being renewed. Union representatives are fighting for an end to bonificación, which is deeply unpopular in the firm’s workforce, she tells us.
“The bonuses are not [contractually] established (…) we [the MOVILNET workforce] don’t know if they will continue to pay us. Every month we have a period of uncertainty where we ask: How much will we be paid? Which bonuses will arrive?” she wondered, highlighting the lack of transparency surrounding the policy.
According to the telecommunications worker, this more flexible payment method is an “anti-worker, illegal strategy” to water down the government’s labor responsibilities in light of the cashflow problems and economic difficulties faced by the nation. The strategy, she argues, sits in stark comparison to the pro-capital concessions the government has granted to business owners and the bourgeoisie.
“If the government was truly in favor of the working class, it would be trying to improve [contractual] salaries in place of assigning bonuses, since the working class is the primordial base of socialism and the revolution,” she stated.
Against workers’ rights
This position is shared by National Womens’ Institute (INAMUJER) worker Andrea Gómez, who described the policy as “denigrating” and “populist.”
Gómez has seen her net monthly income drop from around US $40 in 2016 to US $1.38, despite being in the job for fifteen years. Talking to VA, she lamented that the bonus culture has now penetrated all sectors of society but has had little success in alleviating the high cost of living.
One example the feminist activist highlighted is the Humanized Childbirth bonus (floating, but on average US $0.75-$1, monthly), which looks to provide supplementary income to pregnant women. In Gómez’s opinion, the meager value of the bonus pales in comparison to insignificant pregnancy leave packages or soon-to-be mothers’ sky-high private-sector health bills caused by the deterioration of the public healthcare system.
She also highlighted the impact of bonificación on retirement and severance packages, which are calculated around contractual wages and not net incomes.
“When people reach retirement age they stop getting most of the bonuses. What they want is to have their legal social security benefits, such as a pension which they can enjoy after working for so many years. This is what we, as workers, want: not more bonuses,” she explained.
Venezuela’s working-class rejection of bonificación is clear and coherent, with the policy just one of the many denouncements made at protests and strikes held by autonomous leftist trade union and worker organizations which coincide in their demand for a transparent, sufficient and regular contractual salary.
Differences may exist in workers’ ideas about the best way to finance higher contractual salaries in light of the economic struggles, with some pushing for progressive tax reforms, anti-corruption measures and workers’ control and others focusing on recuperating seized foreign assets.
But wherever the resources come from, the accumulation of popular forces to struggle for a change in government policy regarding labor rights is essential to getting Venezuela’s socialist project back on track, as well as to completing Chávez’s dream.
(1) Memorandum 2792 was issued by the Labor Ministry in October 2019 and (in summary) allows the legal violation of collective contracts in both the public and private sectors. It has provoked frequent protests by trade unions.
(2) The government has also offered bonuses to some private-sector or independent workers. However, the substitution of wage income with bonuses never appears to have been pursued as a systematic policy in the private sector where inflation-pegged dollarized wages are more common.
(3) All subjects mentioned in this article requested to have their names changed.
(4) At the time of writing, a box of 30 eggs costs roughly US $4, a liter of gasoline US 0.50, a kilo of rice US $1, and a passport renewal US $100.
(5) At the time of writing, US $1 equated to 2,500,000 BsS.
(6) The Homeland Card is a government initiative that looks to organize and channel bonuses, social security, social missions, community organization programs, and remaining state subsidies. It is available to all Venezuelans.