Class & Poverty in the Maquila Zone

by Avery Wear

International Socialist Review, May-June 2002


The term "maquiladora" is used today to describe factories that employ sweatshop labor from Central America to the Far East. But the original maquiladoras were set up along the U.S.-Mexico border more than 20 years ago by U.S. (and later other) multinational corporations seeking lower labor costs. In Mexico, corporations pioneered a return to 19th-century working conditions. That such conditions are growing fast on a worldwide scale is increasingly common knowledge, fueled in part by the movements against corporate globalization. Due to its location on the threshold between the rich and the poor countries, the original, Mexican maquiladora zone still has a great significance as a strategic testing ground for labor and social movements to develop the concrete internationalism necessary to challenge corporate globalization. Workers in the maquiladora zones on the U.S.-Mexican border have been hit hard by the current recession, and this has had both negative and positive impacts on organizing efforts.

The Border Industrialization Program The Mexican government launched the Border Industrialization Program (BIP), better known as the Maquiladora Program, in 1965, less than a year after the termination of the 23year Bracero Program, a U.S. government program aimed at attracting cheap, temporary, migrant Mexican labor to work in the booming U.S. agricultural sector.' Part of the justification for the BIP was that returning braceros would find otherwise scarce jobs in foreign factories near the border. But it is doubtful that many of the 4 million braceros, who were almost entirely male, found work in the mostly female-employing maquilas. The maquiladora system was, in essence, the extension of the Bracero Program to the industrial sector. The BIP exempted machinery, raw materials, parts, and components from import duties within 100 kilometers of the border. After assembly or processing, these materials could then be re-shipped to the United States with duties assessed only on value added.

Companies were also exempt from local taxation. The BIP provided foreign, and particularly U.S., corporations access to low-wage, comparatively unregulated conditions in Mexico without traditional trade barriers. "Maquiladora" means "apparel for export," reflecting the early assumption that most factories would produce textiles. The new setup represented a departure from Mexico's postwar policy of national economic development through import substitution and the beginnings of its opening up to free trade, privatization, and foreign investment.

By 1976, 448 maquilas employed 74,500 workers. In 1986, 865 maquilas employed 227,900 workers. By 1998, 3,051 maquilas employed 1,035,957 workers. Administrative employees constituted 7 percent of the workforce; technicians, 12 percent; production workers, 81 percent. Fifty-six percent of production workers were female. (The proportion of male workers had grown over the years, due to chronic labor shortages.) Only 20 percent of factories produced textile products by this time; thirty-six percent produced electronic equipment; 18 percent, construction equipment; 14 percent, other products. Japanese, South Korean, and European capital have increasingly joined U.S. firms.

While the BIP originally limited preferential conditions to the frontier strip, the 1994 North American Free Trade Agreement (NAFTA) signed by the U.S. and Mexico opened the Mexican interior for maquiladora construction. Twenty-seven of Mexico's 32 states (all except Nayarit, Colima, Chiapas, Tabasco, and Campeche) had plants in 1998. Still, 75 percent of maquila factories, employing 79 percent of the workers, remained in the border region. Tijuana had the largest number of maquiladoras, with 681. Ciudad Juarez, however, had the largest maquiladora workforce, with 210,650 workers. Last year, NAFTA erased special tariff exemptions for maquiladoras.

In 2001, the BIP contracted for the first time. Nearly 350 plants shut down, and 238,000 jobs were destroyed. The number of maquiladora workers has now returned to near the 1998 level, and production is down 9.2 percent from the 2000 level. Baja California, whose maquiladoras produce mostly toys and consumer electronics, lost 88 factories and 61,653 jobs. The U.S. economic recession was the biggest cause of this downturn, though the strong peso helped to drive up costs and cut into sales. Some plants have packed up and moved to the even lower-wage regions of Asia and Central America.

Conditions in the maquiladora zone

Poverty is the defining feature of life for the new industrial armies living in the colonias (neighborhoods) around the maquiladoras. In 1994, the average maquiladora worker had to work two hours to buy a gallon of milk. Then, in December of that year, the peso crashed. Wages across Mexico, including in the maquiladoras, lost half their purchasing power overnight. Today, the average maquiladora wage is around $ 1.00 per hour, well below the average for manufacturing in Mexico as a whole. This money does not go much further for maquiladora

workers in Mexico than it would in the U.S., since "the Cost of living in Mexican border towns is comparable to that in the United States." Now, for the first time, unemployment has become a major problem for maquiladora workers as well. Under Mexican law, companies are supposed to provide four months of severance pay to laid-off workers, so there is no government unemployment insurance. Unfortunately, the severance pay often doesn't materialize.


Conditions in the colonias

Perhaps even more appalling than conditions inside the factories are those in the surrounding colonias. The companies are not required to pay any local taxes, so the cities have no funds for basic residential infrastructure. The companies and the local government provide no necessary social services of any sort to the workers they exploit. Workers, whose wages are already impossibly low, are forced to fend for themselves in every way, from child care to housing to garbage disposal.

In Tijuana, the first generation of maquilas opened near the downtown area. But since the start of the 1980s, companies have shifted construction to the undeveloped mesas on the eastern end of the city. Makeshift residential districts have sprung up in the canyons between these mesas. Workers have been forced to build the colonias themselves, often on undeeded land. Residents of those colonias that exist without legal proprietorship have been subject to expulsions and persecution. This has led in some cases to militant community defense, as in the Maclovio Rojas community outside eastern Tijuana. Other colonias, such as another Tijuana community led by the Comite Urbano Popular, have fought for and won basic services such as water and electricity from the government.

The colonias in Tijuana, many now more than a decade old, still resemble vast temporary camps. Families cram into single-room, wooden shacks. Dirt floors seem to be the norm, and some lack roofs. Homes lack indoor plumbing or electricity. Badly rutted dirt roads wind through hot, dusty communities without parks, sidewalks, or any recreational facilities. The city doesn't pick up the garbage, so it is dumped haphazardly and strewn on nearby hillsides.


Workers' struggles

Today, as is typical of "global assembly line" sweatshops throughout developing countries, no authentic unions hold contracts in the maquiladoras. Rather, many maquiladoras operate under the "protection contract" system. In this system, plant owners sign "union" contracts with Mexico's government-tied union federations-the Mexican Workers' Confederation (CTM), Revolutionary Confederation of Workers and Peasants (CROC), or the Revolutionary Workers' Confederation (COR)-without the knowledge of the workers. Known as charro unions in Mexico, after the autocratic and conservative leaders who rule them, these federations operate openly, and sometimes even lead real struggles, in some parts of Mexico. But in the maquiladoras, they are strictly at the service of the employers. "We call the official unions in the maquiladoras sindicatos 61ancos [white unions]. They are worse than the charro unions-they are like no union at all," says ex-maquiladora worker Mauricio Higinio.


Unorganized, the maquiladora working class is a dagger in the heart of organized labor across the hemisphere. Bosses in the U.S. hold them up as a standing threat to workers resisting their austerity. Their low wages undercut those of other industrial workers in Mexico. Across Latin America, few groups of factory workers are so completely deprived of unionization. When these workers free themselves, they will change the psychology of the labor movement North and South. They will undermine the historic xenophobia of much of the U.S. working class and their unions. They will inspire workers on the global assembly line from Honduras to Haiti and beyond. The maquiladora working class will need international solidarity in order to rise to organization. But when they do this, internationalism may well flower tenfold.

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