Mexico's 'maquiladora' labor system keeps workers in poverty

Employees work the production line at a factory in Ciudad Acuna, Coahuila state, Mexico.
Employees work the production line at a factory in Ciudad Acuna, Coahuila state, Mexico. MCT

By day, Sergio Martinez labors in a modern air-conditioned factory a few miles from the Texas border, a human cog in the global supply chain that helps build pickups and tractor-trailer cabs. He wears a smart uniform at work.

At night, he comes home to a dirt-floor shack with a bare light bulb and no indoor plumbing. Mosquitoes buzz incessantly. He and his family live like poor dirt farmers.

His salary of $7.50 a day is enough to provide for the family dinner table, the cost of bootleg water and electricity, and an occasional article of discarded clothing for his wife or two girls, but rarely anything else.

Martinez, 35, is emblematic of the industrial sector of Mexico, a magnet for foreign investment hitched to a strong U.S. locomotive. Factories in Mexico pump out plasma TVs, BlackBerry smartphones, kitchen blenders, airplane components and automobiles. Yet millions of workers, like Martinez, can only dream of climbing from the lower class to buy the appliances, smartphones and cars they help manufacture.

Some four decades after welcoming foreign assembly plants and factories, known as maquiladoras, Mexico has seen only a trickle of its industrial and factory workers join the ranks of those who even slightly resemble a middle class. Instead, the poverty trap clutches them tightly. Some have earned the same wages for years. The government subsidizes credit, allowing purchases of appliances and even simple houses. But the credit sinks them into debt they can never hope to repay. Their teenage children, rather than staying in school, rush to factories themselves or join criminal gangs.

Without deep political and social reforms, experts say, the thousands of maquiladora plants that cluster at the U.S. border and around cities in the interior will remain a fixture for decades to come, and Mexico won’t build a middle class that’s big enough to fuel faster economic growth.

Mexico does all it can to ensure that workers don’t unionize, or if they do that they join so-called “protection unions” designed to assure the interests of plant owners and keep wages low.

For nine years, Martinez has been a constant presence on a fast-moving assembly line. He unspools and tapes electrical wiring systems for Ford pickups, Harley-Davidson motorcycles, Volvo and Scania trucks and other vehicles.

He and his wife, Elba, are from a rural area of Veracruz state on the Gulf of Mexico, part of a large community from that state that’s moved to Mexico’s northern border. Once a municipal policeman, Martinez heard of good-paying jobs so he migrated, later bringing his wife and starting a family.

They live in what Mexicans call a “jacal,” a homemade shanty of scrap wood and tarpaper. Boulders keep the corrugated tin roofing on in case of high wind. An outhouse is a few feet away. Next to it is a washing machine set on pallets in the open air. A broken stove also lies outside, hollowed out and jerry-rigged to serve as a barbecue. A makeshift electrical line brings power from a neighbor’s house. A homemade pipe brings water from a different direction

After nearly a decade at his job, Martinez isn’t optimistic.

“We don’t have hopes for a better life here for our kids,” he said.

Yet he sticks it out, even as ownership of the plant revolves. Once a division of Alcoa, the plant was sold in 2009 to Beverly Hills, Calif.-based Platinum Equity, then sold again last October to a Finnish company, PKC Group.

Ciudad Acuna, across the Rio Grande from Del Rio, Texas, is at the midpoint of the 1,950-mile border between the United States and Mexico, making it a useful manufacturing hub even if it’s surrounded by endless scrub. The city is one of dozens of such industrial nerve centers in Mexico.

The first foreign factory came to Ciudad Acuna in 1969, and a stream of others followed. Today, 63 factories fill five industrial parks, employing 43,000 people. Workers here assemble Oster appliances, sew automotive air bags, build electric motors, sort supermarket coupons and carry out a myriad of other tasks.

They also assemble huge mining trucks with a 400-ton capacity for Caterpillar, the Illinois heavy equipment firm. Emerson, a Missouri-based industrial conglomerate, is scheduled to begin assembly operations here in a few weeks.

“We’ve grown 17,000 jobs in three years,” Mayor Alberto Aguirre Villarreal said. “We have the lowest crime rate along the border. This helps us. Companies that come don’t ask us, ‘What is the risk?’ ”

Acuna also has a history of antipathy toward unions, which officials consider a major selling point in attracting manufacturers.

“We’ve never had union issues. That’s been a great positive for us. We’re not used to having unions in our city,” said Jose Jorge Ramon, the director of economic development for the city.

Factory managers say that by keeping unions out and bringing workers in from southern Mexico, companies that operate here are able to keep wages low.

“These people come to work hard, to suffer. They are willing to work for very little,” said Roberto Rivero, a human resources manager at the Japanese-owned Takata plant here that employs 2,400 people to piece together automotive air bags.

No matter what one thinks of trade unions, Mexico’s are without a doubt different from those that operate in much of the world. Only a fraction have democratically elected leaders. Few actively bargain on behalf of their workers. During the 70 years of rule by Mexico’s Institutional Revolutionary Party, whose candidate is considered the leading contender to win Mexico’s presidential election July 1, unions became more of a tool for political control than one focused on workers’ rights.

Union leaders from other countries often view their Mexican counterparts with consternation. “Their reaction is, ‘These guys are from the mob.’ Pinkie rings, $3,000 suits. And a lot of these guys are in Congress,” said Ben Davis, the director of international affairs at United Steelworkers, the largest industrial labor union in North America.

Forty percent of Mexico’s 47 million workers are covered by union contracts, but few feel any benefits. “There are workers who don’t even know they belong to a union,” said Maria Xelhuantzi Lopez, an expert on collective bargaining at the National Autonomous University of Mexico.

Unions docile to demands from management, or firmly under the control of owners, have allowed the center-right governments of the National Action Party, which has controlled the country’s presidency since 2000, to promote the nation as a low-wage, owner-friendly destination.

“The Mexican case has become paradigmatic. It is in contrast to what is happening in Brazil and China, where wages are going up,” said Huberto Juarez Nunez, a labor relations scholar at the Meritorious Autonomous University of Puebla, a Mexican state best known for being home to a vast automotive-assembly industry.

Even those who help multinational companies keep labor peace at operations in Mexico are sometimes loath to deal with traditional union bosses who flourished under the Institutional Revolutionary Party, known by its Spanish initials as the PRI.

“They are warlords,” said Jorge A. de Regil, a labor lawyer in Mexico City for Baker & McKenzie, the Chicago-headquartered global firm. “They are untouchables because the PRI has protected them and supported them for 75 years.”

What happened when workers tried to organize an independent union at the PKC Group factory where Martinez works is a lesson in stifling labor demands for wage increases.

The company’s vice president for North America, Frank Sovis, addressed many of the plant’s 8,000 or so workers on Jan. 30, telling them he’d beaten them to the punch. PKC already had signed them up with a branch of the Mexican Confederation of Workers, a PRI-organized labor group, in what experts call a “protection contract,” short-circuiting any chance at an independent union.

“We will continue to operate the business exactly as we have,” Sovis said in English, according to a tape recording provided to McClatchy.

That was bad news for workers such as Sergio “Chema” Perez, who’s spent 15 years operating forklifts and cherry pickers at a PKC-owned warehouse.

“For 13 years, I earned the same salary: 110 pesos a day,” he said, a sum equivalent to $7.85.

Perez has a fit physique at age 48, the result of weekends moonlighting as a soccer referee to earn extra money. As he sat in a chair in his simple home, his wife, Lorenza Montanez, took an interest in the conversation.

The couple has four children. A 19-year-old son already has gone to work at the same plant as his father, while a 15-year-old daughter has dropped out of school.

“We couldn’t pay,” Montanez said, explaining that the public secondary school was charging parents about $11 a month.

“As a mother, you want your kids to keep studying so they can get ahead. But it’s impossible here in Mexico. So she just hangs out with me in the house,” she said.

The daughter probably will end up in a factory, too, because the family is falling behind on its bills.

“If you pay the power bill, you can’t pay the water bill,” Perez said, as his wife retrieved a delinquent water bill for about $249, threatening disconnection.

“It is maddening to live with the fear that they’ll cut off the water or the gas,” she said.

Whether Mexico can progress in the decades ahead by leaving Perez and many of the 7 million or so other industrial and assembly workers like him behind is a crucial issue. Cheap labor keeps goods inexpensive in U.S. markets, but it also hinders the growth of a consuming class in Mexico.

“If these folks had money, they’d be buying things we make as well as stuff made in Mexico,” said Davis, the United Steelworkers representative.

“When you have a decent middle-class tax base, you can afford better services,” said Pete DeMay, a Mexico organizer for the United Auto Workers. “That’s not the case near a lot of these plants.”

The desperation of workers is apparent. Many of those who can’t find weekend jobs peddle trinkets from their homes or turn to more radical measures, such as crossing the Rio Grande to sell their blood plasma in Del Rio for $25 to $35 per visit.

“I donated for about two years. But then my heart rate started going up,” said Rogelio Villarreal, a 35-year-old who was sitting in a car outside the one-story offices of Talecris Plasma Resources in Del Rio.

For Maria Teresa Adame, a 40-year-old mother of four and worker at the PKC harness wiring plant, the salary was too low to keep her family out of harm’s way.

One son dropped out after junior high school, and the next two completed only elementary school. A 9-year-old daughter is still in school.

About a year ago, her third son, Nicolas, “went off with bad people. I imagine that they offered him money and drugs. They told him he’d earn money,” she said.

She could barely bring herself to whisper the name of the crime group that lured her son: Los Zetas, the brutal and perhaps biggest syndicate in Mexico.

He simply vanished for six months, returned for three months and disappeared again. Then she got a call earlier this year. Nicolas had been captured by the army and was being held in a youth detention facility.

She asked for leave for a few days, borrowed the equivalent of about $200 and headed to nearby Tamaulipas state to retrieve him. He’d been shot in a toe. As she spoke, he stayed inside her bare cinder-block one-room house, avoiding a visitor.

Asked whether she feared that her son might run off again with the gang, she shook her head and remained silent, looking at the ground.

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