Thread: Mexican President Elect Calderón mantra: Jobs, jobs, jobs

http://www2.eluniversal.com.mx

Calderón mantra: Jobs, jobs, jobs
BY FRED ROSEN/The Herald Mexico
El Universal
Martes 01 de agosto del 2006


After “López Obrador is a danger to Mexico,” Felipe Calderón’s most resonant campaign slogan was “jobs, jobs, jobs.”

The mantra was resonant because for the past two decades, most Mexicans have faced stagnant wages and a dramatic decline in employment opportunities.

But if he manages to assume the presidency, can he really become, as promised, “the president of employment?”

He seems to understand that if he replicates the accomplishments of President Vicente Fox, he will be held in non-compliance. Fox’s advice to the marginally employed and unemployed that they go into business, investing in their own micro-enterprises (micro-changarros) was widely perceived as an admission that underemployment was out of his control.

INFORMAL SECTOR GROWS

Some two-thirds of the salaried jobs created during the six years of the Fox presidency were in the informal sector, carrying no benefits whatsoever, and frequently without a written contract.

The Bank of Mexico now estimates that of all the jobs, new and old, in the Mexican economy, about 28 percent are informal.

So Calderón — should the Federal Electoral Tribunal give him the opportunity to govern — knows he must do better.

And one place he will certainly look is to the many transnational firms — in banking, manufacturing and agribusiness — that have found it profitable to do business in Mexico. A Calderón government will certainly do its best to lure more transnational capital, and transnational jobs, to Mexico. The bait will be low costs of production.

According to the Bank of Mexico, the average wage in the formal economy last year was 188.9 pesos per day, about four times the average minimum wage, and just enough to keep a family out of poverty.

There is a general consensus that four minimum wages plus the health care benefits available to formal-sector workers from the Mexican Institute of Social Security (IMSS) just about covers the cost of the “canasta básica” for a family of four — the basic basket of goods and services that keeps a family above the poverty line. So even formal-sector workers are barely keeping their heads above water.

AUTO INDUSTRY

The best-paid workers, reports the Bank, are those who work for large firms. Wages in firms of over 300 workers averaged 238.6 pesos a day, more than double the wages of workers in micro-enterprises, and five times the minimum wage. These, and not the jobs in the “micro-changarros,” are the jobs Calderón will try to generate in Mexico.

Increasingly, these jobs can be found in Mexico’s burgeoning transnational auto industry, an industry many supporters of the North American Free Trade Agreement (NAFTA) have been counting on for years to spur Mexico’s economic growth.

Indeed, it is one of the few sources of increasing formal employment, having created about 50,000 jobs over the past six years.

Last year, auto industry exports to the United States, including parts and accessories, topped US$43 billion, nearly double the US$23 billion worth of crude oil exported to the United States. This year, the industry is expected to produce over 2 million new cars in Mexico, mostly for the U.S. market, but also for domestic consumption.

But the global structure of the industry (General Motors, Ford, DaimlerChrysler, Nissan and Volkswagen are Mexico’s largest producers) means not only that profits are repatriated to the United States, Germany and Japan, but that firms are integrated into a global structure of suppliers and sellers whose ownership is based in those same home countries.

While an auto plant, unlike a maquiladora, cannot be picked up and moved overnight, transnational auto firms have no particular interest in the development of the Mexican economy.

Auto manufacturers are attracted to Mexico by the generalized crisis caused by rising costs of production in the industry. In the United States, autoworkers earn from US$14 an hour (a starting wage for non-unionized Nissan workers in the U.S. south) to well over US$30 an hour for experienced, unionized workers in Detroit.

In Mexico, a typical auto industry wage for an experienced worker is about 300 pesos a day (about 6.5 minimum wages), which translates to about US$3.50 an hour. Hence the attraction.

NO SOCIAL COMPACT

But there is no social compact contained in this strategy, no plan for a sustainable future of well-being. Mexico needs the jobs, but it also needs to know that a cost-cutting move from the United States to Mexico is not simply one stop on the road to China.

The likely Calderonista strategy to bring “jobs, jobs, jobs” to Mexico will be linked to a global offensive against all “inefficient” barriers to profit-making and private investment — including unions, social welfare and environmental protection.

It will be supported by transnational manufacturers and by some Mexican workers who now see few alternatives to trekking across the Arizona desert. But it must be accompanied by a broader plan for long-term development.

frosen@cablevision.net.mx

The likely Calderonista strategy to bring “jobs, jobs, jobs” to Mexico will be linked to a global offensive against all “inefficient” barriers to profit-making and private investment — including unions, social welfare and environmental protection.

No wonder Bush supports this guy.