With the two economies firmly interlocked, the United States’ biggest export to Mexico nowadays is economic meltdown.
Mexico’s largest sources of revenue are oil sales, factory exports, remittances, and tourism. All are hit hard by the crisis north of the border.
The maquiladora export factories on Mexico’s northern border have been particularly battered. The Chamber of Commerce in Juárez, across from El Paso, reports that 25 percent of the city’s 330 plants have temporarily laid off as many as 40,000 employees.
Auto parts maker Delphi, for example, which has 50 plants in Mexico, has been laying off workers through the first quarter of the year. In the last half of 2008 the tourism industry lost 65,000 workers, 16 percent of all jobs lost.
Benedicto Martínez, a leader of the Authentic Labor Front (FAT), said, “We are seeing many workers laid off, temporary plant shutdowns, reductions in benefits, an increase in subcontracting, and an increase in underemployment.”
NO MORE FLAT-SCREENS
According to the Red Maquiladora Network, in Tijuana, the effects of U.S. belt-tightening are clear: maquilas that make furniture and televisions have been hardest hit. Companies are laying off, cutting wages, cancelling company buses, and taking workers out of the public health system. With long lines of workers looking for work, companies are now requesting middle or high school diplomas before hiring.
Official figures say 25,000 jobs were lost in Tijuana before December 2008. At Sony, one of the biggest maquilas in Tijuana with more than 9,000 employees, workers have been put on four-day weeks; at RCA, three days. The city is choked with laid-off workers who’ve started street businesses with their small severance payments.
Many maquila workers are returning to their homes in central and southern Mexico, taking a chance on their small plots of lands.
At the same time, Mexican immigrants to the U.S. are losing their jobs, as work dries up in industries like construction. Though they may find lower-paid jobs, they will have less money to send home to their families. In 2005 remittances were $18 billion, 2.5 percent of gross domestic product. (The “bright” side is that each U.S. dollar sent home is now worth 50 percent more because of the decline of the peso!)
Foreign investment in Mexico has also dropped dramatically, and oil revenues, the country’s largest source of income, have fallen by more than half.
WORKERS TAKE ACTION
Some workers have begun to act to defend their incomes, benefits, and retirement programs. In mid-February, thousands of truck and bus drivers throughout Mexico carried out a work stoppage over rising fuel prices. The press reported that the strike affected 35 cities, 16 of 32 states, and 25,000 vehicles.
The staggered stoppages included strikes, roadblocks, the seizure of toll booths, and demonstrations. Thousands of trucks and buses were stopped and hundreds of companies affected.
In Reynosa, across from McAllen, Texas, 1,000 Nokia workers protested in front of the labor board office, demanding their severance pay.
Many thousands of workers and retirees, mobilized by the Mexican Union Front and the Mexican Electrical Workers Union (SME), rallied at the Congress in late February to demand that social security funds be re-nationalized. These government funds, roughly similar to Social Security and Medicare, cover 60 million people and support pensions and health care. In 1997 they were turned over to private interests, and in the last year, those funds lost $4.7 billion.
SME leader Martin Esparza spoke to the rally. “They have put our savings and resources in the international reserves,” Esparza said, “and now, because of the international crisis, out of the blue they tell us that it’s been used to rescue the bankers once again.”
Meanwhile, Manuel Lopez Obrador, the man who many working-class Mexicans believe was the true winner of the presidential election in 2006, is traveling the country speaking at rallies of tens of thousands. Lopez Obrador was the candidate of the Party of the Democratic Revolution (PRD), the populist party that supports the independent unions.
Lopez Obrador attempted to take the PRD’s proposals for handling the crisis to the Mexican Congress, but it denied him entry and he was forced to hold a meeting of thousands of supporters in front of the building. He warned “those who think they are the lords and owners of Mexico, we will overthrow them, we will push them to one side, because if we don’t, they will lead the country to a complete and total failure.”
CHANGE LABOR LAW
One government response to the crisis is to attack labor law, arguing that existing laws hold down employment. The Secretary of Labor wants Congress to pass a bill by April, contending that permitting subcontracting and part-time work will increase jobs. Mexico’s proposed law would limit union representation, contract negotiations, and the right to strike; permit more forms of temporary work; promote contracts by craft rather than for all of a firm’s workers; and require unions to give employers workers’ names in strike votes. Votes on union representation would continue to be conducted aloud rather than by secret ballot.
