Manufacturing Poverty

The Maquiladorization of Mexico

by Dan LaBotz

IN JUAREZ, THE WORKERS, most of them young women, leave their homes at six in the morning to go to work. The best of these homes are three or four rooms made of concrete block and adobe; the worst are one or two rooms made of discarded lumber and tar paper. Many have no running water or toilets. The workers walk unpaved side streets which, depending on the season, are dusty, muddy or occasionally snowy to wait for the city bus or company van to pick them up and carry them to work.

Many of these workers labor in modern factories owned and operated by U.S. corporations. Equipped with the latest combination of electronic controls and robotic machines, these factories are located in well-paved and well-lit industrial parks served by superhighways and railroad lines. The plant managers and supervisors are usually U.S. men earning six-figure salaries who live in El Paso, Texas and drive their BMWs across the border to work. The lower-level supervisors are Mexicans who translate the employers' instructions into Spanish. In other cases, the workplace may be some subcontractor's hole-in-the-wall facility. There, conditions are worse: wages may be as low as $3.75 per day, and workers may not be covered by the national health program for workers.

This is life in Mexican towns and cities along the U.S.-Mexican border, where multinational corporations, drawn by low wages, have set up maquiladoras, or manufacturing and assembly plants, bringing dangerous environmental pollution and a host of social problems into desperately poor neighborhoods.

"There are a whole series of problems which are linked to the maquiladora," says Teresa Almada, a social worker with the Independent Popular Organization in Juarez. "There are problems with the urban infrastructure, such as the lack of water, sewers, electric light." Other problems, she says, include low wages, industrial pollution and pervasive sexual harassment of women workers. "The issue of the maquiladora isn't just the factory which comes here," she says, "but rather that in cities along the border in Mexico, the size of the maquiladora industry is so great in relation to the city, that the maquiladora limits and determines the entire social reality of the city."

Conditions in the maquiladora communities in cities like Tijuana, Juarez, Reynosa or Matamoros provide an insight to the frightening future, for, as Mexican Secretary of Commerce Jaime Serra Puche has stated, in many respects NAFTA is Mexico's maquiladora - or border industry - program, writ large. Mexico's maquiladora program allows foreign companies to set up factories that produce for export; NAFTA would allow foreign businesses to invest freely throughout Mexico. Just as multinational corporations have shifted production to Mexico's maquiladoras in order to take advantage of cheap labor and lax environmental regulations, so it can be anticipated that U.S. and Canadian corporations will find the main attraction of investing in Mexico to be the country's low social standards, some of which are dramatically inferior to those of its industrialized Northern neighbors.

 The new frontier

 In 1965, the Mexican government established a limited free trade zone along the U.S.-Mexican border through the Border Industrialization Program, which encouraged foreign corporations to build factories and create jobs in Mexico. Many U.S. corporations, including General Motors and Zenith, moved factories to Mexico to take advantage of low wages or to escape U.S. environmental or workplace safety regulations. The program mushroomed in the 1980s when repeated devaluations of the peso dramatically lowered Mexican wage rates. Today, 850 U.S. corporations operate one or more maquiladora plants, and more than 80 percent of the maquiladora companies are U.S.-owned. About 68 percent of all investment in the maquiladora zone comes from the United States.

The maquiladoras have drawn hundreds of thousands of Mexicans to live in border towns and cities. Over half a million workers, two-thirds of them women, labor in over 2,000 such factories, for about 50 cents an hour or $4.50 a day. Cities like Tijuana and Juarez grew at the spectacular rate of over 7 percent a year, burgeoning to a population of over one million inhabitants today. Juarez now has about 340 maquiladoras employing 150,000 workers in a city of 1.3 million inhabitants. Many of these cities' residents live in shacks and hovels in neighborhoods without sewers, running water, electricity or paved streets.

"The maquiladora is the axis of the economy in cities like these," explains Almada. Local politics have come to be dominated by business consortiums, such as the Bermudes group or the Fuentes group, which build industrial parks for the multinational corporations. These Mexican business interests, closely tied to multinationals, become important forces not only in the local economy, but also at city hall and in the state legislature.

 Given this sort of power structure, the city's economic resources are frequently diverted from the needs of the working class inhabitants to those of the Mexican and multinational industrialists. The domination of multinational corporations and Mexican real estate interests leads to the construction of highways, rail spurs, airports and other facilities, rather than to the building of homes or the paving of streets in working class neighborhoods. For example, according to Almada, Juarez officials are placing a budgetary priority on paving the streets and highways which connect the industrial parks. "Pavement is the priority," she says, "in a city where half the people have no sewer system."

 Hazards of the maquilas

 Work in the maquiladoras involves tasks such as assembling wire harnesses for automobiles or electronic circuit boards for computers, putting together stereo systems or sewing shirts and blouses. The pace of work is usually rapid and intense, lasting for nine-hour days, 45 hours per week. The turn-over of the workforce is extremely high.

Virtually all maquiladora supervisors and technicians are men, while more than three-quarters of the operatives are girls and women. In this situation - where most workers have no labor unions and the government does not protect workers' rights - sexual harassment is endemic. "Many of the girls are between 14 and 20 years old," says Almada, and, "[as] they leave the factories they are in a lot of danger. Rapes occur frequently, many of which go unreported. Many young women become pregnant with no possibility of a stable family life." Attorneys, social workers and women activists report that sexual harassment and rape often go unreported either because women fear reprisals in the form of firing or because a lack of resources to deal with rape and harrassment lead to a climate of shame and humiliation for the victims of these crimes.

 "The majority of women workers in Mexico are not protected by the legal system as established by federal labor law," according to Patricio Mercado, a leader of Women in Labor Union Action (Mujeres de Accion Sindical). There are many reasons why women are not protected by the law. Young women workers, some coming from the countryside, may not know their rights, or may be afraid to assert those rights in the face of male authorities who represent employers, the government and unions. Simply put: they fear losing their jobs if they complain. Some have gone to work illegally at the age of 14 using forged documents and may be reluctant to attempt to exercise their rights. Others work in small shops or factories which have an ephemeral existence; Mexican workers call them golondrinas or swallows because they may fly away at any moment. These run-away shops often do not pay the aguinaldo or annual bonus, and they do not make the annual distribution of profits under the constitutionally mandated profit-sharing law. In other cases, the exhausting pace of work forces some women to leave the workplace before they are entitled to any benefits.

In the factory itself there are many threats to worker health and safety. A 1991 study of the Matamoros-Reynosa area by the Work Environment Program of the University of Massachusetts at Lowell concluded that "the working conditions identified in this study are reminiscent of the nineteenth century sweatshops of the U.S. industrial town." The study found "clear evidence that maquiladora workers are suffering from musculoskeletal disorders related to working conditions, including rapid pace of work, poor workplace design and other ergonomic hazards. Acute health effects compatible with chemical exposures were also identified, indicating the potential for the future development of chronic diseases in the workforce."

According to the Mexican Secretary of Commerce, almost 40 percent of the maquiladora plants produce electronic equipment. While there are few good studies of occupational illness in the Mexican maquiladora industry, studies of electronic plants in North America and Europe have revealed problems among workers including increased rates of miscarriages and high rates of muscle skeletal disorders, such as carpal tunnel syndrome. Some solvents used in these plants may cause peripheral neuropathy, that is, numbness and tingling in the hands and feet. One Mexican study reported that some Mexican plants use benzene, a known carcinogen. Over 80 chemical plants operate on the border, including Stepan Chemical of Chicago, which has been accused of toxic dumping. In addition, metalworking plants use lead and zinc, both of which are also potential health hazards. Lead can cause reproductive and kidney problems and hypertension.

 Mexican occupational health professionals such as Asa Christina Laurel, the author of several studies of Mexican health and safety laws, have long criticized the Mexican government for its failure to enforce occupational health and safety laws. In general, Mexican authorities have failed to collect information or carry out studies on workers' health problems.

 The rapid industrialization and urbanization of cities like Juarez has also resulted in severe social problems. For example, neither the employers nor the government provides child care for workers' children. "Child care is a real issue now because both parents have to work" in order to earn a subsistence income, says Lilia Reyes, a labor lawyer who works with the Workers Center (Centro Obrero) in Monterrey, Nuevo Leon. She notes that single working mothers "may have to wait months before they can get a place. There just aren't enough child care centers."

 The maquiladoras are also a factor leading to the proliferation of child labor, with children from desperately poor families often using forged birth certificates to begin working in the maquiladoras at 14 or 15 years of age.

Employers, social workers, women's groups and academics all agree that there are significant numbers of children working in the maquiladoras, although there are no concrete figures on their actual number. One employer speculates that 5 percent of maquiladora workers are underage.

Repressing unionists

 Mexican workers who have attempted to organize to address some of these maquiladora-created problems have met with harsh repression. A strong upsurge of labor activity occurred during the late 1970s among a youthful, militant workforce which joined labor unions, organized strikes and attempted to negotiate contracts for improved wages and benefits.

But the combined efforts of multinational employers, the ruling Institutional Revolutionary Party and the one-party-state's labor unions, the Confederation of Mexican Workers (CTM), the Regional Confederation of Mexican Workers (CROM) and the Revolutionary of Workers and Peasants (CROC), soon succeeded in crushing the labor upsurge [see "Mexican Labor: The Old, the New and the Democratic," Multinational Monitor, January/February 1991].

 Employers fire and blacklist union activists and other outspoken workers. These practices have gone on for years and continue today. Consequently, most maquiladoras are unorganized, and state-controlled unions represent workers in those that are organized.

These unions are of little use in improving conditions for the workers. Some are "ghost unions," that is, unions unknown to the workers. These phantom unions negotiate "protection contracts" that protect the employers by giving workers contractual wages and conditions inferior to those guaranteed by labor law. Others are what Professor Jorge Carrillo Viveros of the College of the Northern Border in Tijuana calls "low profile unions," or unions with no presence on the shop floor.

In April 1993, workers at the BESA plant in Juarez petitioned for the right to form a "coalition" which under Mexican labor law would give them the right to bargain with their employers. All 113 workers who signed the petition were immediately fired, the employer preferring to pay them their severance rather than have a union in the plant. One worker, who must remain anonymous, explains that because the labor authorities give the activists' names to the employers, those who sign such coalition petitions are always fired.

 Union dissidents who demand democracy and insist that their unions fight for economic and social justice are fired with the collusion of management, the union and the government. The Mexican Boards of Conciliation and Arbitration and the labor courts are notoriously worthless in the defense of workers' rights. Activists are blacklisted by the employers and the unions, and in some cases threatened and beaten. Today workers and independent unions like the Authentic Labor Front (FAT), and some leftist parties like the Revolutionary Workers Party (PRT) are forced to organize by building secret union cell structures within plants and corporations.



Casualties of Free Trade

Workers' Loss in Watsonville

by Joe Fahey

I live and work in the community of Watsonville, California, where I represent the 4,000 members of Teamsters Local 912. Watsonville is located between Monterey and Santa Cruz at the head of the great Salinas valley which has provided much of the United States with vegetables for many years. It was the setting for John Steinbeck's In Dubious Battle.

Our community's agricultural base has made it the home of many ethnic groups: Mexicans, Chinese, Filipinos, Italians and Yugoslavs, among others. These people all came to work the land, and, since World War II, to work in plants that process the fruits and vegetables that don't go to fresh market. This work is now leaving. Our community is being hurt by decisions being made in corporate board rooms thousands of miles from here. Small companies are closing or being taken over by huge transnational corporations that are running away.

 Green Giant was first to head to Mexico. In 1983, Pillsbury bought the company and opened a vegetable processing facility in Irapuato, Mexico, eliminating 800 jobs in Watsonville. In 1989 Pillsbury was taken over by Grand Metropolitan, a giant English holding company which decided to use broccoli and cauliflower grown in Mexico. This eliminated another 380 Watsonville workers. Other companies have followed Green Giant's example. Today, about 9,000 fewer people in the Watsonville area are working in the food and related industries.

While the private sector has benefited from running away from our town, the public is paying for it. Workers pay with their livelihoods. Taxpayers pay to retrain them and provide them with extended unemployment benefits, medical care, food stamps and other forms of aid. More of the local tax burden is taken up by individual taxpayers as the corporations flee. The residents and the remaining food processors (who aren't big enough to move) pay an increased share of costs, for instance, for the $20 million sewage- treatment plant that was mandated by the EPA to clean waste water from Green Giant's and the other departing employers' former operations.

 People in Irapuato pay in another way. Clean water there is in short supply. The rivers running through town are severely polluted by the untreated sewage of 500,000 inhabitants and by industrial wastes from factories and a nearby oil refinery. Green Giant, free of local regulation, is drilling more than 450 feet deep to pump out about a million gallons a day of potable water in order to clean and wash exported vegetables. They currently discharge the dirty water, untreated, back into the polluted river.

 The children of Irapuato pay too. Because of their parents' declining wages, more of them are entering the workforce at an early age. Indeed, the Mexican public has seen a vast reduction in its standard of living since 1982, when foreign investment was liberalized. Foreign companies actually pay less in annual wages to their workers than Mexican employers do. To get around a constitutional requirement to pay their workers a share of the profits, multinational corporations juggle their books to show no profitability form Mexican operations.

This story is not unique to Watsonville, Irapuato or the food processing industry. We are seeing our communities throughout the United States and the world being degraded by private-sector decision-making. Given the diversification and resources of the corporate giants, it is difficult for isolated local struggles to be effective in combatting their abuse. It is becoming increasingly clear to those of us who have fought this kind of fight, that the tactics of taking on one employer at a time will not be effective in this "New World Order." To have some control over our communities, we must be able to change laws.

 Now, just as this realization is being made, the transnational corporations with the help of their friends in government want to change the rules of the game. This is what free trade with Mexico is about. This is what the Generalized Agreement on Tariffs and Trade is about. Corporations want governments to make it easier for them to run away from environmental standards, worker protections, and any but the lowest standards of community responsibility. By virtue of trade agreements, they want the right to ignore the rules of fair conduct established by local, state and even national governments. They want a system, for instance, that would overrule Californians who pass tougher environmental initiatives.

 I would suggest that anyone who is interested in maintaining or improving our standard of living or protecting the planet needs to understand what we are up against. To fight this "free trade" menace, we need a broad vision of community improvement that involves workers, environmentalists, human rights activists and other public-spirited persons in the United States, Mexico, Canada and everywhere else. The globalization of capital makes necessary a corresponding globalization of labor, whose "solidarity," however, must now include almost everyone. The transnational corporations are in a better position than before to take advantage of narrow self-interests and play us off against each other. We must resist those manipulations in concert with our brothers and sisters throughout the world. Economic forces seem to be creating a situation where, in order to change our communities, we now have to change the entire world!

Joe Fahey is president of Teamsters Local 912 in Watsonville, California.



Labor Crosses Borders

With U.S. and Canadian companies threatening to shift production to Mexican maquiladoras in ever greater numbers - and faced with the fact that labor competition will be heightened even further with the adoption of NAFTA - progressive unionists in all three countires have begun to emphasize international labor solidarity. A number of international labor coalitions have emerged from joint campaigns against particular corporations. The Communication Workers of America, for example, formed an alliance with Canadian and Mexican communication workers unions in the course of a dispute with Northern Telecom. Teamster Local 912 in Watsonville, California saw its canning plant close, costing 800 Mexican and Chicano workers their jobs. Local members joined with workers in Irapuato, Mexico in an effort to force Green Giant to build a waste-treatment plant in Irapuato and to provide extended job training for the Local 912 workers in Watsonville.

 Another important nascent coalition is the North American Worker-to-Worker Network, which involves teamsters, autoworkers, electrical workers and service employees in making direct contacts between U.S., Mexican and Canadian workers. The goal of the program is to eventually build coalitions to use their economic and political power to counterbalance the power of multinational corporations, while protecting the rights and working conditions of workers.

Mexican and U.S. trade negotiators alike contend that NAFTA would improve workplace and community conditions in the maquiladora zones and throughout Mexico. But the evidence to support that assertion is weak. Mexican wages have plummeted during the period of the maquiladoras' rapid growth, falling from $1.38 per hour in 1982 to $0.69 per hour in 1988 to an estimated $0.51 per hour in 1991. And labor rights have been substantially restricted since the mid-1970s. Mexican officials tout these low wage levels in courting foreign investment, and it is undisputed that cheap, non-unionized labor and lax regulatory enforcement are the reasons foreign investors look to Mexico. Because foreign investors in the maquiladoras or in Mexico generally under NAFTA would overwhelmingly be export-oriented and relatively unconcerned with Mexican domestic consumption, guaranteeing labor rights, raising wages or enforcing environmental and health standards would undermine the basis of their investment: low costs.