Mexican Labor Reawakens

Mexican Labor Reawakens

Strikes at factories along the U.S.-Mexico border point to a new era for labor organizing in Mexico.

“The movement was the catalyst that we needed,” Juan Luis Gaytán said, standing outside the Arca Continental plant in Matamoros, a city in the northeastern Mexican state of Tamaulipas. Gaytán works at Arca Continental, the Coca Cola production and distribution plant for the region. That morning, the workers at the plant were on strike, among the thousands of workers who have gone on strike in Matamoros since the start of 2019.

The workers at Arca Continental are also among the last who remain on strike in Matamoros, where a wave of labor militancy was kicked off by the newly elected president Andrés Manuel López Obrador’s December announcement that the minimum wage at the factories along the U.S.-Mexico border—known as maquiladoras, or maquilas for short—would rise from 88 pesos to 176 pesos, or $9 a day. Since maquila wages are pegged to the minimum, workers saw the president’s announcement—one of his first acts in office—as an opening to push for higher pay. Between January 9 and 24, workers in dozens of factories in Matamoros organized work stoppages. The wave of strikes became known as the 20/32 movement, after the workers’ demands: a twenty percent salary increase and a one-time bonus of 32,000 pesos, roughly $1,700.

Approximately 50,000 people in Matamoros, a city of more than 500,000 bordering Brownsville, Texas, work in maquilas, which have dominated the local economy for decades. Since the North American Free Trade Agreement went into effect in 1994, their significance has only grown, supplying US-based manufacturers, especially in the automotive sector. With wages under $15 a day, Mexico-based maquilas have been a boon to US manufacturers and a bane to US workers. Of the 36 countries in the OECD, Mexican workers have the lowest average earnings. And while most maquila workers already earn more than the minimum wage, it is still a fraction of what their counterparts in U.S. factories are paid.

The 20/32 movement points towards a new era of labor organizing in Mexico, where workers have begun questioning the established unions, often co-opted by industry and politicians, and pressuring a sympathetic president to turn campaign promises into realities. Mexican organized labor’s conservative leadership, however, may present challenges for this new wave of worker organizing. The 20/32 movement will test whether militant labor organizing under the López Obrador administration can lead to long-term material gains for workers, or, like in previous administrations, it will falter.

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The first efforts to industrialize Mexico’s border region date to the 1930s under president Lázaro Cárdenas. The Cárdenas government sought to build closer ties with border cities that had been historically detached from the central government. The maquila industry’s true beginning was the 1965 Border Industrialization Program, which sought to replace the jobs lost when the United States ended the Bracero Program in 1964. At the time, Mexican minimum wage in the northern border region was only a quarter to a third of what US factory workers were paid. Maquilas were and remain factories that import raw material to be processed at low costs, with the finished products exported mainly to the United States.

As Mexico liberalized its economy throughout the 1980s, maquilas grew in importance. The North American Free Trade Agreement (NAFTA), which went into effect in 1994, further entrenched the model. According to the National Maquiladora Exporting Council (CNIME), the number of people employed at maquilas rose from 330,000 to one million between 1987 and 1997.

Matamoros has historically had one of the strongest labor movements of the border cities. This year’s strike wave began at maquilas represented by the Day Laborers, Industrial Workers and Maquila Industries (SJOIM), part of the Confederation of Mexican Workers (CTM). The CTM, like organized labor in Mexico more generally, has consistently failed to advocate for the working class. But SJOIM, while part of the CTM, predates it and has won important gains for maquila workers in Matamoros in the past.

Many of the established unions in Mexico have “protection contracts” with companies, cutting workers out of the process instead of allowing them to vote for their representatives. Workers in many of these unions do not participate in collective bargaining. Sometimes they do not even know which union represents them.

These unions have also been closely linked to the Institutional Revolutionary Party (PRI), which ruled the country for much of the twentieth century. The CTM is the epitome of these “paper” unions. Its members were obliged to vote for the PRI for decades, and it wasn’t until 2018 that the CTM’s General Secretary made clear that members were free to vote for any party.

In mid-January, SJOIM president Juan Villafuerte Morales ceded to pressure from workers and entered negotiations for higher pay with maquila management. When those negotiations failed, a strike was called on January 25. By February 5, after an additional negotiation period, more than forty factories represented by the SJOIM had agreed to the 20/32 movement’s demands.

The next stage of the movement began when workers represented by the Industrial Union of Maquila Workers and Assembly Plants of Matamoros (SITPME) went on strike in early February. The SITPME, also part of CTM, has historically been more conciliatory towards management than has SJOIM.

SITPME contracts were not yet up for negotiation, so the state and national labor boards ruled some of these strikes illegal. But, building on the momentum from the first round of strikes, workers persevered. In response to these unauthorized strikes, maquila owners have fired at least 4,000 workers. But even so, many of the maquila owners have been compelled to negotiate, fearful that, because the produce for export, they could not afford to halt production for too long.

With union leaders generally reluctant to sustain pressure on maquila management, the void of labor leadership has been filled by Susana Prieto Terrazas, a charismatic labor lawyer from Ciudad Juárez. Prieto has represented and won settlements for workers in Ciudad Juárez fired by manufacturers Foxconn and Lexmark in 2015 and 2016, respectively. When not live-streaming rallies and picket lines, Prieto Terrazas has been advising the striking workers in Matamoros. In contrast to the often distant union leadership, she prioritizes direct contact with the workers and shares information about marches, picket lines and negotiation meetings widely. And she is a harsh critic of unions like the SJOIM and STPME, advocating instead for bottom-up organizing and the creation of a new independent union for maquila workers.

Nowhere is the tension between union bureaucracy and rank-and-file militancy more evident than on the Coca Cola picket line. SJOIM declared the strike at the Coca Cola plant on February 15, after the owners refused to meet the 20/32 demands. But as the weeks have dragged on, workers have begun to feel that Prieto Terrazas, not their union leaders, best represents their interests. Prieto visits the picket line on a nearly daily basis; the workers say their union leaders have been largely absent.

The Matamoros strikes have energized the Mexican labor movement more broadly. The strikes forced the issues of low wages in Mexico into public debate. Analyst Jorge Casteñeda wrote in a March editorial in the business paper El Financiero, “There will be no way to raise the income of the millions of Mexicans who earn starvation wages without a powerful, democratic, plural and diverse trade union movement, not concentrated solely in the public sector.”

Representatives of the 20/32 movement also went to Mexico City on March 13 and hosted a forum with striking workers at nearby universities. At the auditorium of the Mexican Electrical Workers Union (SME), one of Mexico’s most important independent unions, located on Avenida Insurgentes in Mexico City, spokespeople of the 20/32 movement addressed an audience of sympathetic union members.

Julio Peñalosa, a welder at Mecalux, a maquila which fabricates metal racks for export, brought his pay stub to the forum to show that he earns 241 pesos a day ($12.71). “The company doesn’t even give us security equipment,” he told a crowd of hundreds. “I am a welder and I inhale gases all day, but they only give me a facemask for dusk.” In between speakers, the crowd broke into chants of “¡Huelga!”—in Spanish, strike.

Prieto Terrazas sat patiently through the speeches, livestreaming on her Facebook page. She was the sole woman at the long conference table, surrounded by a dozen men. While more men have started working in maquilas in recent decades, an estimated sixty-five percent of the workforce is still women. The labor leadership, however, remains decidedly male. Prieto Terrazas, usually wearing a bright red t-shirt, her long, red hair spread across her shoulders, is the salient exception.

Though it was López Obrador’s minimum wage pronouncement that sparked the 20/32 movement, its leaders now openly criticize the ostensibly labor-friendly president. In her speech in front of the Electrical Workers union, Prieto Terrazas forcefully denounced Lopez Obrador’s lack of response to the strikes.

“He went to my town [to campaign] and said he would put the poor first and that there would be dignified salaries for the workers in this country,” she shouted. “I believed his promises! I’m guilty!”

Prieto Terrazas also called on organized labor to hold López Obrador accountable for his campaign promises. “Those of us who fell asleep because we thought that Superman was entering the presidency,” she said, wrapping up her speech to the rapt audience. “Well, it’s time that we re-start the struggle.”

After the strikes in Matamoros, which won salary increases and bonuses at dozens of maquilas and led to mass lay-offs at others, Prieto Terrazas now hopes to turn the newfound dynamism into gains for workers around the country. But while her charismatic leadership has carried the Matamoros strikes into their third month, some fear the confrontational tactics of the movement could backfire.

And the stakes are high. The state of Tamaulipas, where Matamoros is located, has seen some of the most horrific drug war violence in Mexico. Two ex-governors, Eugenio Hernández Flores and Tomas Yarrington, will be tried in US courts on racketeering, money laundering and other charges. Organized crime keeps a tight control on the local economy, and small businesses are commonly victims of extortion. Maquilas offer some of the only steady employment available in Matamoros, and the possibility that employers could leave the country for cheaper and more stable locations needs to be taken seriously. At least one company, Joyson Safety Systems, which makes parts for BMW, GM, Ford, Jeep and Tesla, has announced its departure from Matamoros due to the strikes, and others have threatened similar moves.

But Saúl Escobar, a labor historian and professor at the National Institute of Anthropology and History in Mexico City, is optimistic that the 20/32 movement will continue to inspire renewed labor organizing.  He points to a series of factors that will favor labor organizing in the coming years. These include the increased minimum wage, a more sympathetic executive branch, and provisions in the new North American free trade agreement, the USCMA, that ensure real representation for Mexican workers in contract negotiation processes. The International Labor Organization has also pressured Mexico to ensure free association for workers. Reforms to Mexico’s labor justice system were passed in 2017, but the implementation is ongoing.

“This all means that workers will participate more in making their contracts with companies,” Escobar said. “If that happens, we can expect more labor conflicts than in the past.”

The unique labor conditions of Matamoros and the latent grievances of maquila workers proved a potent combination, sparking Mexico’s largest industrial labor movement in recent years. While public sector workers in Mexico, including teachers, have had major strikes in recent years, this is very likely the biggest maquila strike in Matamoros since the 1980s.

The ripples are just starting to be felt around the country. In an action inspired by the 20/32 movement, a union representing 8,000 Walmart workers at 132 stores spread across 10 states won a five-and-a-half percent salary increase. Walmart executives also acknowledged the right of free association for its workers, after years of contracts negotiated without workers’ participation.

How the López Obrador administration will respond to a newly militant labor movement remains to be seen. He named Luisa Alcalde Luján, a long-time advocate for democratic unions, to head the Secretariat of Labor and Social Welfare. But the new president has also courted the business sector in his first months in office, trying to quell worries that capital could flee the country Business organizations like the Employers Confederation of the Mexican Republic (Coparmex) have spoken against the Matamoros strikes, warning that breaking the “labor peace” in Mexico will drive out investment.

Whether by reforming the existing unions from within or forming new, independent unions, and with or without the support of the executive branch, Mexican workers are on track to achieve important gains in the coming months and years. After years of unfavorable conditions, Escobar said, “This could be a re-awakening for Mexican syndicalism.”

Martha Pskowski is an independent journalist based in Mexico City, where she reports on development and environmental politics.