The End of Coffee, Part Two: Christmas is Coming
Christmas! It’s practically here! At least, that’s what retailers would like you to believe. Blinking lights, decorated cypress trees, and waving Santa Clauses peer out from a growing number of houses, and store windows now sport signs helpfully reminding you that you can begin payments now and bring home the item of your choice in time for Christmas. Newspapers are printing shopping guides, with prominent advertisements from Amazon and international shipping companies promising delivery of hard-to-find items with little hassle.
The end of November finds the whole country awaiting the release of the aguinaldo, the ‘thirteenth month’ salary that employers are required to pay their employees during the first twenty days of December. The amount equals a full month’s salary, pro-rated and averaged to include overtime or extraordinary hours worked. Functioning as an enforced savings program, the aguinaldo payments fuel most holiday spending, from electronics to Barbie dolls (which cost at least $50) to new clothes, decorations, and the ingredients for Christmas feasts.
Since it is mandatory, it is considered part of one’s salary, rather than a bonus, and is entered into a complex series of payments, taxes, and contributions that make up employment in Costa Rica; an employmee who quits or is fired prior to the aguinaldo payment is entitled to a prorated percentage upon the end of employment. The payment applies to regular employees who have worked for more than a month for the same employer. This means that seasonal employees, such as temporary coffee and pineapple pickers, usually do not receive the payment. The temporary and transitory nature of their work makes it easy for employers to avoid paying the aguinaldo when it has been earned, and hard for investigators to track down noncompliant employers.
The aguinaldo was implemented in 1954 as a benefit for public-sector employees. By 1959, all employees, regardless of employer, had the right to the aguinaldo. A lengthy battle in 1991 formalized the details of payments for all employers – some had been paying only 15 days’ salary, rather than 30 – and re-consecrated the aguinaldo as an important and necessary benefit for Costa Rican workers. Like other remaining elements of the massive package of social welfare programs implemented after the Great Depression in the 1930s, the aguinaldo is now threatened by CAFTA (Central American Free Trade Agreement).
In the years between 1933-1936, the state created the Institute for the Defense of Coffee (now ICAFE), passed a minimum wage law, underwent banking reform in 1936, and implemented public works projects. Under ideologically distinct administrations, by 1948 nationalized Social Security, banking, and insurance, as well as the University of Costa Rica, universal suffrage for women and blacks, and ICE (Costa Rican Electricity Institute) had all been established under a Constitution that reconciled political factions and abolished the army, making Costa Rica virtually the only non-island nation without an armed forces. The depth of these reforms led popular President ‘Pepe’ Figueres to state that ‘Costa Rica is not a country. It is a pilot project. It is an experiment.’
Though many of these reforms and monopolies have since eroded – chief among them the legalization of private banks and the recent entrance of Movistar and Claro in the telecommunications world – Costa Ricans still hold to their rights to the aguinaldo, to health care and education and insurance and social security. It is unclear whether the aguinaldo can be abolished under CAFTA, and there is nothing in the way of contemporary mainstream journalism that even hints at it. But the aguinaldo points to a larger question, one that has already been impacted by the passage of CAFTA.
How, in a hemisphere that the United States has claimed as its own since the Monroe Doctrine of 1823, were all these social welfare programs created and maintained? U.S. intervention in the name of anti-communism in the region is well-documented, and though its intervention is now mainly economic and in the name of “free trade” and “freedom,” its dominance has not lessened. How was Costa Rica able to create a social welfare state, while in 1954 Guatemala, the CIA was overthrowing democratically elected president Jacobo Arbenz for even attempting social reform?
The explanation, as most in Costa Rica do, goes back to coffee, and later, Costa Rica’s geopolitically strategic location. What was to become Costa Rica began as a colonial backwater under Spanish rule: despite the name ‘Rich Coast,’ the region lacked both mineral and labor resources, and was isolated from the capital in what is now Antigua, Guatemala. Many of the indigenous populations were wiped out by disease in the early years of colonization, making slave labor in the colony nearly non-existent; those who did settle there had to rely on themselves or other colonists to survive.
Eventually the Spanish settled in the Central Valley, where San José was established as the capital in 1755. Because of the dearth of exploitable populations and the isolation from the capital, populations remained small for the first two hundred years of colonization, and land was cheap, fertile, and readily available. Meanwhile, labor was expensive and scarce, so the large-scale fincas or plantation farms that came to dominate Guatemala never came into existence. They couldn’t; there was no one to work a farm of that size. Farms remained small until the end of the 20th century, and for the most part, rich and poor had to live together out of economic necessity.
Costa Ricans frequently overstate these humble beginnings, calling theirs a ‘demoperfectocracia’ where everyone got along and no one ever fought. While certainly overstating the tolerance of Spanish settlers and their descendants, and ignoring the very real exploitation of indigenous populations that did, and does, occur today, nevertheless distinctions between rich and poor were far less sharp than elsewhere in the Spanish kingdoms. Importantly, since there were no enslaved populations threatening the Spanish, there was no need for the kind of army that grew up in Guatemala to protect the wealthy from the poor.
The absence of large fincas, isolation from Antigua, the fertility of Central Valley soil and the difficulties of bringing exports to the coasts all literally planted the seeds for the “golden bean” that would dominate the two hundred years following independence. In my next posts, I will explore coffee’s rise to dominance and its contemporary struggles to allow Costa Ricans to maintain the quality of life to which they have become accustomed.
