LABOR : Mexico Paper Presses the Issue of Union’s Power : La Reforma sends vendors into the streets, bypassing hawkers guild after its members refuse to sell the daily on a holiday. Some see battle as a class struggle.

Every morning, a new army appears on the streets of this teeming capital.

Armed with white baseball caps and newspaper bundles, they battle rush-hour smog, pirouette through chaotic traffic snarls--shouting above horns and unmuffled tailpipes--and compete with juggling clowns, window washers and street beggars.

A few are politicians, some are even rich. But most are otherwise unemployed. Together, they have become an overnight Mexico City institution: street soldiers in a battle that has captured the attention of a nation at the edge of change.

What began as a young newspaper’s challenge to a powerful union--which owned the capital’s streets for 71 years--has become, for many analysts here, a test case of Mexican neo-capitalism and freedom of the press on one hand, and the traditional patronage of institutional labor on the other.

This is La Reforma versus the Union of Mexican Newspaper Hawkers and Vendors, which represents 20,500 lower-class families that own kiosks and hawker posts in a city awash with daily newspapers.

The case is pending before Mexico’s Federal Commission on Competitiveness, which has been asked to rule on whether a labor group should maintain seven decades of exclusive rights to hawk every newspaper, magazine, novella and comic book sold on the city’s public byways.

For La Reforma, it is a landmark effort to break up a government-backed monopoly that is among the relics of Mexico’s socialist past. For the street hawkers, it is union-busting by rich capitalists at a time when the official pendulum has swung too far in their favor.

And for the capital audience that has watched this drama play out on their busiest thoroughfares, it has been pure street theater.

This week, some of the nation’s top politicians joined in the act, which began Nov. 3 when the newspaper’s president and general manager, Alejandro Junco de la Vega, led his new, non-union army of novice hawkers into the streets.

They were joined by some of Mexico’s best-known intellectuals, traditional supporters of workers’ rights. On Tuesday, even Cecilia Soto, the glamorous former presidential candidate of the Workers Party, put on a white Reforma baseball cap and spent the morning side-by-side with the scabs.

“There are a lot of people in the street selling our paper who don’t need to be there but who think there is more at stake than a dispute between one company and one union,” Junco said. “There is more at stake. . . . We have, for so many years, relied on a system of patronage . . . that we are trying to change.”

Countering that opinion, union lawyer Nestor de Buen, a labor analyst and prominent newspaper columnist, said of La Reforma’s actions, “The intention is just to rob the union of its power and its strength.”

That alone would have been impossible five years ago and unthinkable in the era when the hawkers union was born. Since its inception Jan. 15, 1923, the union has held exclusive rights to the streets because of government rulings, verbal agreements with publishers and a succession of administrations--until now.

President Carlos Salinas de Gortari has made a concerted effort to break labor’s lock on commerce during his six-year term. Aides to Salinas’ successor--Yale-educated President-elect Ernesto Zedillo--have indicated that those policies will continue when he takes office Dec. 1.

But the flash point for La Reforma’s fight struck at the core of labor’s protection--the right not to work five days a year.

The outcome of the case is now anybody’s guess.

Junco triggered it when he demanded the union vendors sell his paper this Sunday. It’s La Reforma’s first anniversary. But it’s also the anniversary of the Mexican Revolution--one of five sacred days of rest that are constitutionally guaranteed.

Immediately after Junco’s demand--a legitimate right for a free press to publish as it wishes, he asserted--the union stopped selling his paper at its 17,000 street stands citywide.

Junco mobilized his “alternative channel” overnight. “This all goes far beyond the Mickey Mouse issue of five holidays a year,” said Junco, who insisted that he has passed the point of no return and now must fight until his paper wins or dies.

“It’s exposing a whole scheme of inefficiency, corruption and union patronage, an old way of dividing the country up into feudal fiefdoms,” he added. “The people working for us directly now are making more than they would make if they were working for the union.”

“Absurd,” De Buen replied, drawing future battle lines that both sides believe will continue for weeks. “In fact, the hawkers have now become the victims of this very aggressive campaign in the press. The Juncos are trying to do in Mexico City what they did before in Monterrey (the northern business metropolis, where another Junco-owned paper broke the hawkers union). But Mexico City is not Monterrey. And there are the lives of 20,500 poor families at stake.”