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.

Jesus Campos Linas, the dean of Mexican labor lawyers, says that thousands of such contracts in Mexico are arrangements of mutual convenience among corrupt unions, the government and foreign investors who own the factories. "Companies," he explains, "make hefty regular payments to union leaders under these contracts and in return get labor peace."

Over the two years following the closing of Industria Fronteriza, a lawsuit by the workers ground through the courts. Finally, four workers, who had been illegally fired in June 2002, won a decision forcing the Tijuana Labor Board to tell the company to collectively pay the workers $50,000 in severance. Of course, the company didn't pay, so the workers had to get another order, this one requiring that the board confiscate the sewing machines, industrial steam irons and the other equipment left in the abandoned factory.

On December 7, 2004, the workers stood ready at the gate, having come with a truck, forklifts, a lawyer from Mexico City and supporters to carry the equipment out. They had even reserved a storeroom in the maquiladora workers' barrio of Maclovio Rojas to house the confiscated machines. But the charro union stood at the door of the plant prepared for a hostile confrontation with about 40 people, including former company supervisors, holding big sticks ready to start a fight with the workers.

They needn't have bothered. When a Labor Board official noticed a strike flag in the door of the factory, he refused to perform the confiscation because a "strike" was in progress. Workers pointed out that the charro union itself had ended its phantom strike, but the labor board just needed a pretext. In a shouting match back at its downtown offices, Labor Board president Raul Zenil y Orona refused to discuss any further action against the company, and he announced to the workers that the confiscation would never happen.

In some ways, the workers were lucky they didn't end up in jail. Baja California is the free-trade state, where the advanced guard of Mexican industry and commerce live by a set of rules that the rest of the country is only beginning to adopt. In Baja, challenging the cabal of managers, government officials and compliant unions that set these rules provokes a grim and dangerous hostility. The state's prisons have been home to many activists from the social movements of "los de abajo," the people from below.

During the two strikes of Han Young workers in 1998 and 1999, the first legal strike by an independent union in the maquiladoras, strike leaders Enrique Hernandez and Jose Penaflor spent months slipping through the shadows from office to hidden office, seeking to avoid arrest. Julio Sandoval, a leader of indigenous migrant farm workers, spent three years in an Ensenada prison for leading land invasions to secure farm workers a place to live. Hortensia Hernandez has been held in Tijuana's prison almost as long for fighting for land and housing for the city's maquiladora workers in the Maclovio Rojas barrio.

Laboring in the border's vital factory heart, Margarita Avalos describes the grinding economic pressure driving these social movements. Avalos worked at Industria Fronteriza for two and a half years, and remembers her time ironing the sleek garments sewn by her friends: "In the factory, the administration was really authoritarian. They screamed orders. They threw on the floor the things we needed to use. They forced us to work extra time, and if we couldn't do it, they said they wouldn't pay us for any of the time we worked at all. Sometimes I had to work 24 hours straight, even going without eating, in order to get out the orders they demanded. The chemicals and the heat were hard on my body, and for those of us who were pregnant, it was even worse."

For that, Avalos was paid $65 a week. If she really churned out the nylons and bras the way the managers wanted, she could make another $30, but that meant ironing a lot more than the standard 2,000 pieces in an eight-hour shift, or one every 15 seconds.

Raul Ramirez, Baja California's Human Rights prosecutor, faults the government's desire to protect investment above all else. "The authorities don't care about the poverty of these communities, or their social problems like lack of housing or drug addiction. But they are very concerned with the question of the land titles of the large landholders. They want to take care of their investments. So the government uses the law, the police, even the army. They say this provides safety and stability for investors. And they abandon the poor."

The social cost of this policy, Ramirez says, can be found in Baja California fields on any given day during the harvest season, when workers pick tomatoes and strawberries for U.S. supermarkets. Whole families work together in these agricultural maquiladoras--children alongside adults. Felix, a 12-year-old boy picking cilantro in Maneadero in June 2003, said his parents were making about 70 pesos a day (a little over $6), while he was bringing home half that. "We can't live if we all don't work," he said, in the tone of someone explaining the obvious.

At wages a tenth of those paid for the same job in Los Angeles, it might seem fair if maquila workers only had to pay a tenth of L.A. prices for food, rent or any of the basic necessities of life. But that's not the world of the border either. Two years ago a group of New England nuns, who organized the Center for Reflection, Education and Action (CREA), did an exhaustive survey of border prices. They found that for a kilo of rice, a Tijuana maquiladora worker had to labor for an hour and a half. Even an undocumented worker bussing dishes in Beverly Hills at minimum wage can take the same rice home with only 10 minutes' pay.

As usual, what appears to be a legal problem--in this case the enforcement of labor laws--is really about money. It's a recipe for confrontation, and all along the border economic pressure is fueling a wave of industrial unrest.

The National Labor Policy of Mexican President Vicente Fox caters to investors, not minimum-wage maquila workers. In 2001, the World Bank recommended rewriting Mexico's Constitution and Federal Labor Law, eliminating protections for workers in place since the 1920s [See "Escalating Struggles over Mexico's Labor Law," p. 16]. The new law would drop mandatory severance pay and stipulations that require companies to negotiate over factory closures. No longer would employers have to grant permanent worker status after 90 days, limit part-time work or abide by the 40-hour week. And the law would also eliminate the historical ban on strikebreaking. Mexico's guarantees of employer-paid job training, health care and housing, would be scrapped as well. Essentially, these recommended changes would institutionalize in the rest of Mexico the kind of labor relations that already exist, on the ground, in the maquiladoras.

Fox embraced the Bank's report, calling it "very much in line with what we have contemplated." The recommendations were so extreme that even the head of a leading employers' association, Claudio X. Gonzalez, called them "over the top," noting the Bank didn't dare to make such proposals in developed countries. "Why are they then being recommended for the emerging countries?" he asked.

In Mexico City, Jesus Campos Linas, the labor lawyers' dean, was appointed to head the local labor board by left-wing Mayor Andres Manuel Lopez Obrador. Campos Linas rejects Fox's argument that gutting worker protections will make the economy more competitive, attract greater investment and create more jobs. "Mexico already has one of the lowest wage levels in the world," he charges, "yet there's still this cry for more flexibility. The minimum wage in Mexico City is [less than $4] a day--no one can live on this. And [in 2002] we lost 400,000 jobs. Changing the labor law will not solve this problem."

Tiburcio Perez Castro, professor of education at the National Pedagogical University, accuses the Baja California government of only enforcing those provisions of the law that protect private property. "There's a law guaranteeing people the right to health care, but no one has any," he notes bitterly. "There's a law which protects the right to food, but thousands of people go hungry every day."

So in the end, according to Perez Castro, the rule of law itself is in question in Baja California, "at least insofar as it protects people, especially the poor, in the enforcement of their rights. They pass laws to protect the maquiladoras, so the rule of law exists in that sense," he admits. "But there is a danger to social stability, because it's so one-sided."

Whose priorities will prevail in Mexico, those of workers or those of free-trade investors? "The changes proposed by the Bank would be a gigantic step backwards for workers," Campos Linas emphasized. "The bankers don't understand that it took a revolution--a million people died--to get our constitution and labor law. Our problem isn't that we need a new law; it's to enforce the one we have."

In Baja California, the free-trade state, that's not so easy.

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