Baja: The Free-Trade State

Tijuana's oldest maquiladora closed last year.

It didn't fall victim to the dreaded Chinese competition, confounding a wave of near-hysterical alarms in south-of-the-border newspapers, warning that the days of all Mexico's factories were numbered. Instead, Industria Fronteriza owed its demise to a more prosaic cause: women stopped wearing nylons.

For almost four decades, seamstresses in this sprawling sweatshop churned out what was once the height of haut couture. Starting in the mid-1960s, the sleek hosiery caressing the slim legs stalking down New York's fashion runways passed through the rough working hands of hundreds of Mexican women bent over machines on a sweaty, deafening factory floor within a stone's throw of the U.S.-Mexico border.

Given changing styles, perhaps the company's end could have been easily predicted. Plans might have been made for easing these veterans of needle and thread into jobs in some other border sweatshop. Or they might have been trained to fill one of the high-value-added positions that policy wonks insist should, and will, replace the old labor-intensive jobs that started the industrial gold rush here 40 years ago.

Traditional Mexican labor law would have helped the dislocation of these seamstresses. Since the 1930s, when radicals wrote the country's labor legislation (and made it a model throughout Latin America), the Federal Labor Law has called for something U.S. workers would love to have: severance pay. A week's pay for every year at the machine seemed only just to the reformers of that more egalitarian age.

For today's seamstresses, a little money to pay for training programs, some severance pay to live on and a government interested in finding new jobs for older workers might have made quite a difference.

Not in the world of the border. This world turns labor law on its head--old post-revolutionary legal rights are just so much ink on paper, and even the decisions of federal judges to enforce the law are simply ignored.

What happened at Industria Fronteriza was strange even by Tijuana standards. First, workers got no notice that the company was planning to close. In itself, that's not unusual in a city and an industry where shops are suddenly emptied of their machines in the dead of night, leaving people to show up for work at the doors of a vacant shell the following morning. Second, Industria Fronteriza employees belonged to a pro-company charro union, whose casual lack of concern for their welfare was the source of many prior industrial battles. That's not unusual either.

What distinguishes the Industria Fronteriza experience, however, is that in the spring of 2003, the company conspired with the charro union and staged a strike against itself. The sole purpose of the phantom strike was to provide a legal obstacle to the implementation of the severance pay requirement, and leave the workers with nothing. Mexican law says that in the event of a strike, the claims of the striking union must be satisfied before a company can close. Since the official closure of Industria Fronteriza was a precondition to distributing severance pay, the declared strike stopped the compensation process in its tracks. That was pretty extreme, even considering the long-established practice along the border of allowing factory owners to get away with virtually anything.

Throughout Mexico, factory owners sign "protection contracts" with pro-government and pro-company unions, called sindicatos charros. The phrase originally referred to unions led by Luis Morones, a Mexican labor leader from the 1920s. Morones was famous for dressing up like a cowboy, or charro. A notorious conservative in the Mexican labor movement, he signed sweetheart agreements with employers; consequently, workers "celebrate" his memory by referring to company unions as "charro unions." Protection contracts and charro unions are the primary system of labor control for foreign corporations that have built factories on the border. This system allows them to pay extremely low wages, even by Mexican standards, and to maintain dangerous and even illegal working conditions, with little fear of organized worker resistance.