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Mexicans Compete With Chinese Wages

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  • World View <ummyakoub@yahoo.com>
    ANTI-CHINA CAMPAIGN HIDES MAQUILADORA WAGE CUTS By David Bacon Feb 2, 2003, posted to Portside GOMEZ PALACIOS, DURANGO (1/27/03) -- For decades, US workers
    Message 1 of 1 , Feb 4, 2003

      By David Bacon

      Feb 2, 2003, posted to Portside

      GOMEZ PALACIOS, DURANGO (1/27/03) -- For decades, US
      workers have been told their wages were too high -- that
      higher labor costs would force their employers to move to
      Mexico. Now Mexican workers, whose numbers on the border
      have mushroomed in the last three decades, are on the
      receiving end of the same threat. This time the bogeyman is

      Beginning with the Asia Pacific Economic Conference,
      hosted by Mexico in Cabo San Lucas in November, a rising
      media chorus in both Mexico and the US has argued that
      Mexico is losing a low-wage competition with China. Plants
      have closed and moved as a result, the argument goes.

      "With the advances of the giant Asian power," says
      Rolando Gonzalez Barron, national president of the Maquila
      Export Industry Association, "all these companies are trying
      to compete with China with cheap labor." He advises factory
      owners to move to southern Mexico, where wages are much
      lower. "The border has no possibility of competing with

      There is no doubt about the extent of the sharp
      economic crisis now affecting border plants. Gonzalez
      announced last April that 300,000 workers had been laid off
      on the border in 2001 and the first months of 2002. Marco
      Antonio Tomas of Mexico City's Center for Labor Research
      (CILAS) puts the current number laid off at 400,000. Until
      the crisis hit, the maquiladora industry, almost all in
      north Mexico, employed over 1,300,000 workers, according to
      the association.

      Only two actual plant closures have been cited as
      evidence, however. One, a factory making computer monitors
      for Phillips North America in Juarez, shut over the summer,
      costing about 600 jobs. Production moved to Suzhou, China.
      Phillips, however, has another twelve border plants, and
      increased investment in many of them last year. In another
      case, Canon closed an older facility making inkjet printers,
      moving production to southeast Asia.

      While some media estimates repeat employer
      assertions that maquiladora workers earn as much as
      $2.00-$2.50 per hour, and compare this to 35ยข/hour in China,
      the actual average maquiladora wage is generally about $6-8
      per day. Meanwhile, a study by the Economics Faculty of
      the National Autonomous University in Mexico City says
      Mexican wages have lost 81% of their buying power. Twenty
      years ago, it says, the minimum wage could pay for 93.5% of
      a family's basic necessities, while today it only buys

      Another study cosponsored by the Coalition for
      Justice in the Maquiladoras and the Interfaith Center for
      Corporate Responsibility found that at the minimum wage, it
      took a maquiladora worker in Ciudad Juarez almost an hour to
      earn enough money to buy a kilo (2.2 pounds) of rice, and a
      worker in Tijuana an hour and a half. By comparison, a
      dockworker driving a container crane in the Los Angeles
      harbor can buy the rice after 3 minutes at work, and even an
      undocumented worker at minimum wage in LA only has to labor
      12 minutes for it.

      Nevertheless, maquiladora workers say they get the

      Nelly Benitez, who worked until recently at one of
      Sony's three huge plants in Nuevo Laredo, says the company
      openly threatened to move to China if workers didn't accept
      cuts in wages and benefits. "The company began threatening
      to move to China when they began lowering the wages and
      benefits in 2001," she recalls. "Weekly salaries were
      reduced from about 800 pesos to 600 pesos [for a six-day
      week]. We used to get a ride to and from work on company
      busses, since almost no one owns a car, and often we get off
      work late at night. Now we can only get a ride one way, not

      Benitez says that Sony is still bringing new
      machines into the plant to make batteries and
      microcassettes. But after starting production, the number
      of people working each machine is then cut. "For example, if
      they start with five, they'll eventually fire three, and the
      other two have to continue running it."

      Sony has also transformed its workforce. Until the
      recession hit, each of its four plants employed about 2,600
      people, who were permanent company employees. Now, say
      Benitez and Tomas, the number has been reduced to 1500
      apiece. The majority are temporary hires, laid off right
      before they acquire permanent status under Mexican law, at
      the end of 90 days. "They never became permanent
      employees," Benitez says, and therefore have no right to
      severance pay, housing benefits, or status under labor law.

      According to Martha Ojeda, director of the Coalition
      for Justice in the Maquiladoras, which encompasses
      organizations in the US, Mexico and Canada who assist
      maquiladora workers in organizing themselves, the China
      threat is being used far beyond the maquiladora industry.
      The World Bank and the administration of President Vicente
      Fox have proposed modifying Mexican labor law to eliminate
      many of its historic protections for workers. "They're
      promoting a policy of fear, in which workers are told that
      it's better to see five pesos in wages cut to three, than to
      lose their jobs entirely," Ojeda explains. "This is
      combined now with an effort to change the labor law itself.
      If we don't accept their reform, the companies say they'll
      take their investment elsewhere."

      The reforms under discussion include the kinds of
      things happening in the Sony plant. "Companies want the
      unlimited ability to hire temporary workers, who never
      acquire seniority, benefits or labor rights," Ojeda adds.
      "This is what already exists in the maquiladoras. They're
      using the maquiladoras as the model for what they want to do
      with workers in the rest of the economy."

      Rising anti-Chinese hysteria in the maquiladora
      industry, however, is obscuring a basic fact. The border
      industry has tied the Mexican economy so tightly to the US
      market that when consumers in the north stop buying, workers
      from Tijuana to Matamoros lose their jobs by the thousands.
      When the US economy catches a cold, the saying goes, Mexico
      comes down with pneumonia.

      While the maquiladora industry would like workers to
      look east to China to find the source of their problems, and
      enter into a wage-cutting race to the bottom, "where we
      really need to look is north," Benitez concludes.



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