Border Economy in Tailspin

November 20, 2008 -- Matamoros News

Mexicans celebrated their November 20 Revolution Day holiday amid a bleak economic landscape. Consumer credit card charges are up 100 percent.

Hundreds of thousands of workers are without jobs, while millions more watch at least four billion dollars evaporate from their privatized retirement accounts. Mexican crude oil, which supplies the revenue stream for the nation’s social programs, reached a new price low of $38 per barrel this week.

In the northern border city of Matamoros, the local economy grapples with the effects of lay-offs that totaled 6,000 export factory workers from January to August of this year. Especially hard hit were auto industry workers.

Victor Hugo Moreno Delgadillo, regional delegate for the Economy Ministry, called the job losses the worst in Matamoros since the 2001 recession.

"While we had a bad year in 2007 because of the loss of 10,000 jobs, this year is worse because the lay-off numbers for the last four months of the year are still not in," Moreno said.

In addition to outright dismissals, maquiladora workers confront wage and hour cutbacks. Not surprisingly, the mass lay-offs are hurting other sectors of the economy as well. Guadalupe Castaneda, secretary general of a local retail workers’ union, said the number of contracted holiday seasonal workers in 2008 is far below the average of previous years.

"We still have the expectation of 150 additional employees," Castaneda said, "though every year they are 300 or more; the goal now is to maintain the jobs that have been created."

With unemployment rampant and the Mexican peso nose-diving to a decade-long low in comparison to the dollar, merchants in neighboring Brownsville, Texas, are almost certain to suffer a blow from the absence of Matamoros shoppers during the winter holiday shopping season.

Bad employment news is also the order of the day on the Texas side of the border. Since July, nearly 800 workers have lost their jobs at plants and large businesses in Mission, Alamo and Edinburg. Companies which have laid off or are in the process of laying-off workers include Frito-Lay, Fortis Plastics, Progressive Molded Products, Vanity Fair Intimates, and Texas State Bank. Among the casualties were 52 people who saw their jobs vanish earlier this year when Texas State Bank was purchased by the Spanish-banking giant Banco Bilbao Vizcaya Argentaria SA and transformed into BBVA Compass Bank.

Sources: Univision, November 20, 2008. La Jornada, November 18 and 20, 2008. Articles by Julia Antonieta Le Duc, Roberto Gonzalez Amador, Israel Rodriguez, and the Notimex, Afp and Reuters news agencies.

Enlineadirecta.info, November 10, 2008. Article by Federico Zuniga Garcia.

The Brownsville Herald/The Monitor, November 10, 2008. Article by Sean Gaffney. The Brownsville Herald, October 11, 2008. Article by Aaron Nelson.

Frontera NorteSur (FNS): on-line, U.S.-Mexico border news Center for Latin American and Border Studies -- New Mexico State University Las Cruces, New Mexico. For a free electronic subscription email fnsnews@nmsu.edu

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