Borderline of Corporate Generosity

Ah, those generous American corporate executives. Looks like they’re always figuring out some way to help provide poor Mexico with jobs it so urgently needs--as long, of course, as they are handsomely rewarded.

Mexican President Carlos Salinas de Gortari is pushing a free-market economy for his country in the hope of creating more jobs.

And that’s where many American companies come in. They are opening up factories on the Mexican side of the U.S.-Mexican border at an unprecedented rate.

In just the past eight years, some of America’s largest and wealthiest corporations and many smaller ones have opened more than 1,500 factories on the border under what is called the maquiladora program, created by the governments of the two countries. Many more U.S. firms--and now foreign companies--are following the crowd.

The companies already there are providing jobs for an estimated 450,000 Mexicans and bringing with them large amounts of much needed U.S. dollars for payrolls and other costs.

Sounds generous, and it certainly is a help to Mexico, where unemployment and under-employment is enormous and the country’s foreign debt will still be about $80 billion after being trimmed by international bankers last week.

But it isn’t all good news for Mexico, especially not for the Mexican workers.

The American companies’ jobs have attracted tens of thousands of Mexicans to the badly overcrowded slums of Mexican border towns, where medical care and sanitation facilities are almost non-existent and many are forced to live in squalid “houses” made of cardboard boxes thrown out as trash by the American maquiladoras.

Living conditions are so bad that even though the workers desperately need jobs, the employment turnover rate is more than 15% a month.

The U.S. factories are producing enormous amounts of dangerous toxic waste and pollution, and almost nothing is being done to stop that outrage, which was vividly described in stories by Jerry Kammer and Sandy Tolan in the Arizona Republic last April.

Yes, the Americans’ jobs are better for Mexicans than none at all. But the real earnings of the workers are low even when compared to other parts of Mexico because border prices are considerably higher than prices in the interior of Mexico.

Maquiladora wages range from 55 cents to $1 an hour, according to the U.S. Labor Department. The basic workweek is 48 hours.

Not a bad deal for corporations hunting for really cheap labor. In fact, wages in Mexico are now among the lowest in the world. Until 1982, when the value of the Mexican peso plummeted, American companies looking for low-wage workers exported their jobs to places like Korea, Singapore, Taiwan and Hong Kong.

But after the 1982 devaluation of the peso, Mexico became the country of choice for cheap-labor hunters. It is estimated that companies cut their labor costs by as much as $20,000 a year per worker by getting rid of, or not hiring, workers in the United States and opening maquiladoras in Mexico.

The companies get another significant advantage by running away from America to Mexico instead of to the Far East: It costs a lot less to ship products here from across the border than from across the Pacific. And the transportation savings mount up, since about 90% of the products coming out of the Americans’ maquiladoras are sold in the United States.

Also, the factories in Mexico are primarily assembly plants. Almost all parts to be assembled are U.S.-made and the U.S. corporations pay import duties only on the value added to the product by the assembly work done in Mexico.

The maquiladora program didn’t work out as it was planned in 1965 when it first began on a small scale as a sort of replacement for the so-called bracero program, which Congress killed that same year.

Under that bracero program, the U.S. government was bringing hundreds of thousands of Mexicans here each year for temporary farm jobs and sending them back across the border after their farm work was finished.

When the bracero program ended, American companies were encouraged by special tax and tariff advantages to open up maquiladoras on the border to help provide jobs for those displaced Mexican farm workers, most of whom were men.

But in Mexico, as in many other countries, women usually work for less money and are less likely to belong to unions than men.

So guess what? Mexican women, mostly under 25, also need work, and they are filling nearly 80% of the Americans’ maquiladora jobs. Coincidental or not, the use of women helps assure a low-wage and non-union work force under the program.

Unions are a still a rarity in the American border factories, even though 35% of all Mexican workers nationwide belong to unions.

Probably even more attractive to the companies are the few Mexican health, safety or environmental laws that are so costly, though essential, in this country. And the laws Mexico does have are not rigorously enforced.

Despite all the negative aspects of the program, however, it should be continued because it does mean urgently needed jobs and hard U.S. currency for Mexico.

But to reap the benefits of the program, the American companies must be forced by the two governments to stop their exploitation of the workers and their abuse of the environment.

If they want to continue taking advantage of Mexico’s misery, they should be required to start cleaning up the environmental mess they’re making along the U.S.-Mexican border. Rigid health and safety standards to protect workers should be established and enforced, and employers should be required to pay a decent minimum wage that they can well afford.