Labor

In small - and medium-sized industries producing textiles, shoes, and toys, union representatives blackmail and extort workers. In the big national unions, they protect inefficiency and low productivity and are cesspools of corruption.

Sara Sefchovich, 2008223

Through the 1970s, labor remained a major part of the ruling PRI coalition, and government consulted union leadership concerning economic, labor, and electoral issues. Leaders of the CTM, the main labor federation, received lucrative government posts. Labor leaders supported the import-substitution development model since: 1) it advocated a strong government role in the economy—a role that was in tune with their nationalist ideology, 2) it created a large public sector that was union friendly, and 3) private industry was protected from foreign competition, allowing labor costs to be passed on to the consumer. Labor also supported government investment that created jobs, and the government’s distribution of wealth in the form of education, health care, housing, and subsidized prices for basic goods.224

Through the 1970s, unions guaranteed labor stability—a key element for economic development. The union structure mirrored the political structure in that most unionized workers were in PRI-controlled labor federations. However, there were a few feisty, independent unions, just as there were small independent political parties. In 1978, 27 percent of the workforce of 18.8 million were unionized. These 5 million unionized workers were, by and large, protected by labor laws and enjoyed legally mandated health care, disability, and retirement benefits. Policy makers viewed wage increases as necessary for maintaining labor peace and as a key ingredient to enlarging the market for domestically produced goods. Between 1970 and 1981, the number of paid workers increased from 13 million to 21.5 million, as both population and the economy grew, and as the number of working women increased.225

During the early 1980s, policymakers began to favor sharply decreased wages in an effort to make Mexico more attractive to foreign investors and to make the country more competitive in international markets. Inflation, which averaged 93 percent annually between 1983 and 1987, presented the government with the perfect opportunity to lower the value of wages. The government only had to ensure that the rate of wage increase fell behind the rate of inflation. The desired reduction in wages occurred, as workers’ buying power declined by 61 percent between 1983 and 1988.226

During the 1980s the PRI maintained a delicate balancing act. It promoted policies that lowered wages and at the same time continued to reward the CTM leadership, thus maintaining the federation’s support for government policies. Geriatric CTM leaders—increasingly isolated from their base, which they could no longer reward with increased wages—cast their lot with the PRI. They backed government policies that lowered wages and resulted in massive layoffs, supported PRI candidates at the time of presidential elections, and, in the early 1990s, supported the signing of the NAFTA.227

There are several explanations for the government’s ability to impose such sharp wage reductions on a workforce with a long tradition of union struggle:

¦ Leaders of organized labor supported government policy. Based on long experience, they realized that their tenure in office was based on loyalty to the political elite, not to serving their membership.228

¦  During the 1980s and 1990s, the Labor Ministry facilitated defections by workers from the CTM to rival PRI-affiliated confederations when the CTM indicated a reluctance to cooperate with government policy.229

¦  Labor unions were hurt by the shift of industry away from central Mexico, with a strong union tradition, to northern Mexico, where unions were traditionally weak or non-existent.230

¦  The government, official unions, and management would resort to extralegal means to enforce acceptance of lowered wages. In 1992, human rights activists Mariclaire Acosta and Rocio Culebro observed, “Serious violations of individual, social, economic, and political rights of workers occur with impunity in Mexico today.”231

¦  One of the rights denied was the right to strike. In 1990, the human rights journal Christus commented: “The right to strike which previously was exercised with relative frequency, has been practically denied to unions. Declaring a strike illegal is the typical response of the labor boards and tribunals.” Between 1983 and 1988, federal authorities accepted as legal only 1.8 percent of workers’ petitions declaring their intention to strike.232

¦  The climate for labor organizing was not propitious. Between 1983 and 1987, only 234,000 jobs were created, while 900,000 entered the labor force annually.233

¦  As foreign imports began to compete with locally produced goods, management could convincingly argue that wages had to decline to protect jobs.

¦  Plant managers not only threatened to move the plant to lower-wage nations but sometimes they actually did just that. The Sunbeam Corporation plant in Matamoros, just across from Texas, provides a perfect example. In 2000, the company moved production of electrical appliances from its Cleveland, Ohio plant where workers made more than $21 an hour, to Matamoros, where they made $2.36 an hour. Three years later, the company moved production to China where workers received 47 cents an hour.234

Much of the new job creation during the 1980s occurred in northern Mexico, where workers would accept wages considerably below those prevalent in central Mexico. Once established, these lower wages served as a benchmark, and wages in central Mexico were reduced, via inflation, to match the northern benchmark. Workers at a new General Motors plant in the border state of Coahuila found that a corrupt union boss had created a bogus union and signed a collective contract before a single worker had been hired.235

For having acquiesced to massive wage reduction, labor leaders lost the support they had formerly enjoyed. In 1988, this became glaringly apparent as all labor leaders who ran as PRI candidates for the Chamber of Deputies were defeated. Loss of support for the PRI was especially notable among oil workers, who feared the PRI might privatize the industry. As a result, in 1988, Cardenas scored electoral victories in oil towns such as Poza Rica and Minatitlan.236

Under Salinas, the influence of organized labor waned as many companies restructured or were privatized. Labor’s presence in the PRI declined, as did the role of unions in such formal institutions as the Minimum Wage Commission. By 1994, the number of manufacturing workers, who were traditionally highly unionized, was 25 percent below the 1980 level. Finally, as political scientist Kevin Middlebrook observed, “Organized labor could not prevent the Salinas administration from interpreting and applying existing law in such a way as to provide employers in practice with the flexibility to redefine workplace industrial relations. . .”237

During the Zedillo administration (1994—2000), May Day celebrations, which had long served as a ritual to reaffirm the bonds between labor and the ruling party, became symbols of the rupture of that relationship. Beginning in 1995, the formal May Day marches were repeatedly canceled, since official labor leaders were afraid they would become uncontrollable anti-government protests. In 1995, tens of thousands marched in independent May Day parades. Many wore ski-masks to signal their support for Chiapas rebels, who characteristically wore ski-masks to hide their identity.

On May Day 1997, between 60,000 and 250,000 joined the unofficial parades, which called for wage increases, an end to undemocratic control of labor, and a change in government economic policies.238

At the turn of the century, the outlook for labor was discouraging. Union membership had declined to 9.8 percent of the labor force. In 1999, labor activist Berta Lujan found that the greatest obstacles to union freedom were: 1) the proliferation of contracts signed between management and union leaders, without the knowledge or consent of the workers affected, 2) the declaration that strikes were illegal, 3) the government taking over firms to break strikes, 3) the lack of a secret ballot in union certification elections, and 4) the widespread use of subcontractors and temporary workers. Harley Shaiken, director of the Center for Latin American studies at the University of California in Berkley, observed:

The Mexican government has created an investment climate which depends on a vast number

Of low wage earners. This climate gets all the government’s attention, while the consumer

Climate—the ability of people to buy what they produce—is sacrificed.239

The death in 1997 of Fidel Velazquez, who had served continuously as the secretary general of the CTM since 1950, highlighted the woeful state of organized labor. He had backed the fifteen Mexican presidents he had dealt with as a labor leader. In 1959 he had supported the army as it suppressed rail workers, and he had backed the suppression of the 1968 student movement. Later he had supported Mexico’s entry into NAFTA and the suppression of wages that had accompanied it. Given this unwavering support and the contacts he had built up over decades, Velazquez could deliver more than any other labor leader. He brokered wage hikes and other concessions from PRI governments, especially at election time.240

In 1989, Kevin Middlebrook wrote, “Velazquez symbolizes the social pact forged between organized labor and the post-revolutionary Mexican state in the 1930s and 1940s.” That same year, political scientist Lorenzo Meyer commented, “Having such an old man at the front of the labor sector objectively helped to dismantle it.”241

President Zedillo appointed a relatively spry seventy-eight-year old, Leonardo Rodriguez Alcaine, to replace Velazquez. Rodriguez Alcaine had risen to prominence when he took control of the electrical workers union in the 1970s and suppressed attempts to democratize the union. Soon after his appointment, Rodriguez Alcaine promised to maintain the “historical alliance” between the CTM and the PRI.242

After the passage of NAFTA, employers declared that the existing Federal Labor Law made them non-competitive and lobbied to have it reformed. Changes they sought included the right to hire workers on a temporary and part-time basis, pay by the hour (not day), reduce the costs of dismissing workers, introduce probationary periods in employment, and promote employees according to performance rather than by seniority. Even though the Federal Labor Law remained unchanged, employers achieved almost everything they sought via contract revisions. Such changes were facilitated by the signing of protection contracts behind workers’ backs. By one estimate, in 2000 about 90 percent of all union contracts were protection contracts.243

As PRI control over society was weakening and as traditional labor leaders delivered less to the union members, there was an upsurge in independent labor groups. The most prominent of these was the National Workers Union (UNT), which was founded in 1997. The UNT brought together the National Union of Social Security Workers, the Union of National Autonomous University Workers, and the Mexican Telephone Workers Union, as well as the Authentic Labor Front (FAT), a small independent labor organizing group dating back to the 1960s. The UNT opposed reform of labor law called for by business and instead called for respecting the right to strike and for the open registry of unions and contacts. While facing many of the obstacles other independent unions faced, the UNT did have some successes, such as the recognition of an independent union at the Siemens auto parts plant in Puebla. By 2000, the UNT claimed 1.5 million members.244

Rather than bringing sweeping change to the traditional union structure, Fox left the same labor leaders in place. Mexico’s often long-entrenched labor leaders received backing from Fox due to his fear that radicals would dominate labor if there was a leadership change and due to the feeling that incumbents could be used to ensure the passage of legislation waiving rights that had long been guaranteed to labor, at least on paper. In 2005, CTM head Leonardo Rodriguez Alcaine died in office at age sighty-six, once again indicating the sclerosis of official Mexican labor.245

The unions that retained strength and the ability to defend their membership’s interests past the end of PRI rule were unions in the public sector, which by definition could not relocate, the mine workers union, which similarly did not face companies relocating, and the rare private-sector union, such as the Volkswagen workers union, which relied on its being prohibitively costly for VW to relocate its sprawling Puebla facility.

At the end of the Fox administration, neither labor nor business was satisfied with the status quo. Labor resented lost status in the ruling coalition, reduced wages, and the inability to democratically select union leaders. At the same time, business found that PRI-era labor legislation denied it the flexibility in employer-employee relations it sought. Late in the Fox administration, an IMF study found that Mexico’s labor market was the least flexible in the region.246