Thread: Workers Falling Behind in Mexico

Workers Falling Behind in Mexico
By Mary Jordan
Washington Post


Hundreds of carpenters in this lush green valley carve pine into rocking chairs, cribs and tables all day long and earn far less than they did a decade ago.

"We keep working, but we just don't have the money we used to," said Estanislao Cirangua, 74, a furniture maker who now earns the equivalent of $150 to $200 a month, half of what he used to bring home. "I used to be better off."

Millions of Mexican workers -- from wood craftsmen here in the hills of Michoacan state to hotel concierges on the beaches of Cancun -- have not recovered the income, purchasing power and quality of life they had before a devastating financial crisis hit this country in 1994 and 1995. That crisis sent the value of the peso plummeting and severely reduced people's ability to buy basic necessities, let alone save for the future.

Almost a decade after the crisis, workers' stubbornly low earnings are at the core of some of Mexico's most nagging problems. Low wages drive hundreds of thousands of workers every year to cross illegally into the United States, where a day's pay is often 10 times higher. The minimum wage is now about $4 a day; roughly one-quarter of the 40 million workers earn only that, and half the workforce earns $8 or less a day.

Wages remain low for many reasons, chiefly because workers outnumber jobs. In recent years, more women have entered the workforce, compounding the surplus of labor. The long reach of globalization is felt here, too, as lower wages in many other developing countries drive down Mexican pay. The government has worked to keep the legal minimum wage low to check inflation and avoid another crisis.

Along with creating a feeling of stagnation and a flood of immigrants, depressed wages push thousands of workers into the informal economy. Black-market businesses that pay no taxes can provide better wages than many legitimate companies, but offer no benefits.

Following the crisis of the 1990s, countless people in Mexico's fragile, emerging middle class found themselves driven back into the poverty they thought they had left behind, much like the U.S. stock market affected Americans after the crash of 1929. Even for those who are making more than they were 10 years ago, wage increases have not kept pace with inflation.

Mexicans are finding it harder to simply maintain the status quo, let alone move up in life, leading to widespread frustration and dissatisfaction.

Until recently, Angel Lozada was a government employee who served notices to those who owed taxes, but when he was laid off, he realized that he could fare better by not taking another salaried job. Instead, he works in an illegal food stall in Mexico City where he earns $300 a month tax-free.

"It's better to do this, but it is not like it is good. I have to be here seven days a week," Lozada said.

The huge informal economy, most visible in the tens of thousands of street stalls selling everything from television sets to tequila, robs the government of tax revenue needed to address deficiencies in education and health care, among other problems that keep the nation stuck in poverty.

"It's a vicious cycle," said Enrique Aguilar Borrego, a member of Congress and a national union leader. "Low wages have a lot of effects, all of them negative."

As President Vicente Fox nears the halfway mark of his six-year term, his administration says that wages are finally moving in the right direction. Jaime Domingo Lopez Buitron, coordinator of planning policy for the Labor Ministry, acknowledged that having patience can be difficult: "People have an expectation of change, so they are not satisfied. Every human being wants prosperity."

But he insists that Mexico is moving in the right direction.

A government study said recently that over the past three years -- since Fox took office -- 700,000 people have increased their income enough to lift themselves out of poverty and into the lower middle class. Those figures have touched off a national debate about whether lives really are improving. Newspapers and television and radio programs have been flooded with responses from Mexicans stressing that half of the country's 100 million people remain impoverished.

A recent cartoon in El Universal newspaper summed up the skepticism. It showed Josefina Vazquez Mota, Fox's social development minister, looking down at a raggedy, barefoot peasant, who says, "Middle class now, but on my way to the Forbes List."

There are exceptions to the downward trend in wages, such as the auto and export industries, but a recent survey by the American Chamber of Commerce in Mexico found that 70 percent of salaried workers had not recovered the purchasing power they had in 1994.

The Labor Ministry said Mexican workers now earn an average of $360 a month -- 16 percent less than they did in 1993.

Workers that represent the hallmark of the middle class in other countries -- police officers, nurses, firefighters, carpenters -- typically make between $10 and $15 a day here. That usually is not enough to pay for a decent place to live, schooling, food and medical care.

"We work and work and life does not get better," said Cirangua, sitting in his empty furniture showroom 200 miles west of Mexico City. "You feel you are going nowhere."

Need for Education

Cuanajo is a town of 14,000 in a valley where donkeys drag timber down dirt roads. About 60 percent of the residents are involved in furniture-making, working in private shops that are often in their homes. Some, like Cirangua, display their chairs and tables in collective showrooms. Cirangua cannot read or write. Twenty-eight percent of Mexicans over age 15 have never attended school or finished only primary school. Cirangua knows he would make more if he had a better education. He said he has lost customers who wanted to place complicated orders, but left when they realized he did not know how to write up their requests. "If I could read and write, I would have done better," said Cira

gua. Like just about everyone in town, he has a son already working illegally north of the border. "I would have gone to the United States myself," he said.

Lorenzo Meyer, a historian and political analyst in Mexico City, said Mexico needs "an education revolution" to improve workers' skills and, ultimately, their wages.

In recent years, younger children have been staying in school longer, but progress is slow. Students typically quit before high school; the national average is slightly less than eight years of schooling. Nearly a third of the workers in Cuanajo still toil in corn and bean fields, where wages are even lower.

Alvaro Lopez Rios, head of the National Union of Agricultural Workers, said the incomes of most agricultural workers have sharply dropped over the past decade. He said the cost of fertilizer, seed and other

necessities has gone up; at the same time, increasing food imports have driven down crop prices. "The quality of life has gone down," he said, forcing many from the countryside to emigrate and some farmers to switch over to more lucrative marijuana or opium poppy plants.

Juan Carlos Onofre, 65, switched from growing corn to making furniture around the time of the 1990s crisis in the hopes of earning more money. Now, he said, he is struggling again.

He said now that he is older, he would like to hire young carpenters to help him. "But you need people who know what they are doing, who work well," he said. "And they have all gone to the United States."

Globalization's Impact

While Mexican wages are low compared with what they once were, they are still higher than those in much of Asia and Central America.

Owners of maquiladora assembly plants who flocked to Mexico in recent decades to take advantage of cheap labor are now leaving for China, Malaysia and Guatemala. That has cost Mexico tens of thousands of jobs -- exacerbating the oversupply of workers that keeps wages down.

So while Mexican wages are too low to alleviate poverty, they are too high to be competitive. Globalization has forced transportation costs so low that Indonesian furniture can be bought in Texas for less than Mexican furniture.

"Mexico faces a difficult dilemma," said Basilio Gonzalez, of the federal government commission that sets the minimum wage. "On the one side there is social justice and the need to provide human beings with what they need. On the other side is the logic of the market. If companies are not competitive, they close. The problem is how to balance these factors."

Many analysts interviewed said that Mexico needs to position itself as a source of higher-paid, higher-skilled labor to take better advantage of being on the doorstep of the biggest consumer market in the world. But that would take huge investments in worker training and education, and better infrastructure linking Mexico to the United States.

The United Nations recently issued a report on Mexico's development, saying its northern states have a level of development akin to the Czech Republic, Brunei and Hungary and would rank among the top 35 countries of the world. But it said the worse-off southern states, such as Chiapas and Oaxaca, would not crack the top 100 and have even less development than Samoa and the Dominican Republic.

Here in the central Mexican state of Michoacan, furniture makers say they are not advancing -- not like the workers they see on television who live in the United States, not like the people who occasionally drive down from the northern states to buy their furniture.

"There is a downhearted mood in Mexico, because they see how other countries have advanced in the 21st century," said Aguilar Borrego, the congressman.

Moises Hernandez Tellez, 24, who has been working as a carpenter for 10 years, said hard work doesn't guarantee even basic comforts. "People here aspire to buy a television or a refrigerator," he said. "Forget about vacations."

NAFTA........ain't it greaaaaat

Who the hell are they kidding? American companies left the USA to move to mexico, paid only a little better for their slaves and then kicked them in their collective teeth by moving to CHINA and other slave wage nations.

What a horrible mess these bastards have created and stupid people are following them like the sheep that they are. No brain cells are functioning anymore..........called the DUMMING DOWN of our EDUCATIONAL SYSTEM in order to be on the 3rd world ILLEGAL ALIEN's level and all the other slave wage nations.

How difficult is this to understand? Verification is now visible to the naked eye wherever one travels in our country.

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Lorenzo Meyer, a historian and political analyst in Mexico City, said Mexico needs "an education revolution" to improve workers' skills and, ultimately, their wages.

Soon Mexico will no longer need this "education revolution" America will. America gets a little bit dumber with each illegal crossing.