FacebookTwitterGoogle+RedditEmail

No Rest for the Working Poor

Globalization continues to break down its own myths, especially in developing countries.

In Mexico, the promise of more jobs withered shortly after NAFTA went into effect, when it became clear that displacement outpaced job generation. Now, its twin promise—that globalization would create better jobs and improve standards of living—has finally committed public suicide as well.

Ford and General Motors change their operations in Mexico. Ford announced a major investment in Mexico of over $2 billion this week. Alongside the self-congratulatory remarks of industry representatives and government officials, was an interesting tidbit of information.

According to an AP report, at the Ford plant to be expanded in Cuautitlan—on the outskirts of Mexico City where the cost of living has been going up sharply—workers’ wages would be cut in half from their current level of $4.50 an hour. Mexican union leaders stated that this was necessary to compete with China.

The same week, General Motors announced a $1.3 billion investment in its Coahuila, Mexico plant and the creation some 875 jobs (note the low job-to-investment ratio). It also announced the eventual closure of plants in Janesville, Wisconsin and Morraine, Ohio. The Mexican press noted that the company first hinted at the closure of its plant in Toluca, which elicited an immediate promise from the union leadership to accept wage reductions. It soon after announced it will remain open but cut back on operations and lay off some of the workers. Although the new contract terms were unavailable at the time of this writing, the trend is written on the wall.

The companies justified further gouging into the fragile economy of working families by pointing the finger at global competition. As long as China offers wages of as little as $2.00 an hour, Mexico has no choice but to follow suit if it wants to attract investment.

The only legal floor to this race to the bottom is Mexico’s minimum wage of about $5 per day. And the same week, the Mexican government made it clear it has no plans for relief in that area. In classic patriarchal style, Sec. of Labor Javier Lozano explained that raising the minimum wage would trigger “a salaries-prices race and it would be an illusion for workers, it would be deceiving them, since while they might think they have more money to purchase goods, these (prices) would keep going up.”

The problem is that prices are already going up—the price of the basic food staple, the tortilla, went up from 5 pesos at the end of 2006 to 12 pesos in some parts of Mexico today. That alone places Mexico in the growing camp of nations threatened by the global food crisis, where even full-time workers find it difficult to assure a basic diet.

In a June 9 speech at the International Labor Organization in Geneva, Lozano expounded on the perils of granting living wages to the working poor: “The legitimate aspiration of higher wages for workers should come about through increases in productivity and not artificial measures such as generalized price controls or emergency wage hikes.” As Sec. of Labor, you’d think that Mr. Lozano might have seen just one of the dozens of studies that show that Mexican manufacturing has experienced a marked increase in productivity accompanied by a fall in real wages.

But the use of the word “artificial” belies his conviction that anything outside the dictums of the neoliberal market is “unnatural.” So whatever reality serves up that contradicts these dictums continues to be treated as an inconvenient anomaly or ignored completely.

Funny that raising substandard workers’ salaries is presented as the villain in the crusade to control prices for the good of all, whereas other causes—such as monopoly market control—receive no mention whatsoever. Funny, but not in a laughable way. Mexican workers are being urged to resist their lower instincts of wanting to eat regularly and provide a future for their families, and to have faith in the same macroeconomic policies that have failed them for years. That’s a tough order in a society where the cost of basic items rose 47% between December of 2006 and May of 2008 while wages went up a little over 4%.

LAURA CARLSEN is director of the Americas Policy Program www.americaspolicy.org in Mexico City. She can be reached at: lcarlsen(@)ciponline.org

Your Ad Here
 

 

 

 

 

More articles by:

Laura Carlsen is the director of the Americas Program in Mexico City and advisor to Just Associates (JASS) .

November 12, 2018
Kerron Ó Luain
Poppy Fascism and the English Education System
Conn Hallinan
Nuclear Treaties: Unwrapping Armageddon
Robert Hunziker
Tropical Trump Declares War on Amazonia
John W. Whitehead
Badge of Shame: the Government’s War on Military Veterans
Will Griffin
Military “Service” Serves the Ruling Class
John Eskow
Harold Pinter’s America: Hard Truths and Easy Targets
Rob Okun
Activists Looking Beyond Midterm Elections
Binoy Kampmark
Mid-Term Divisions: The Trump Take
Dean Baker
Short-Term Health Insurance Plans Destroy Insurance Pools
George Wuerthner
Saving the Buffalohorn/Porcupine: the Lamar Valley of the Gallatin Range
Patrick Howlett-Martin
A Note on the Paris Peace Forum
Joseph G. Ramsey
Does America Have a “Gun Problem”…Or a White Supremacy Capitalist Empire Problem?
Weekend Edition
November 09, 2018
Friday - Sunday
Louis Proyect
Why Democrats Are So Okay With Losing
Andrew Levine
What Now?
Jeffrey St. Clair
Roaming Charges: Chuck and Nancy’s House of Cards
Brian Cloughley
The Malevolent Hypocrisy of Selective Sanctions
Marc Levy
Welcome, Class of ‘70
David Archuleta Jr.
Facebook Allows Governments to Decide What to Censor
Evaggelos Vallianatos
The Zika Scare: a Political and Commercial Maneuver of the Chemical Poisons Industry
Nick Pemberton
When It Comes To Stone Throwing, Democrats Live In A Glass House
Ron Jacobs
Impeach!
Lawrence Davidson
A Tale of Two Massacres
José Tirado
A World Off Balance
Jonah Raskin
Something Has Gone Very Wrong: An Interview With Ecuadoran Author Gabriela Alemán
J.P. Linstroth
Myths on Race and Invasion of the ‘Caravan Horde’
Dean Baker
Good News, the Stock Market is Plunging: Thoughts on Wealth
David Rosen
It’s Time to Decriminalize Sex Work
Dan Glazebrook
US Calls for a Yemen Ceasefire is a Cynical Piece of Political Theatre
Jérôme Duval
Forced Marriage Between Argentina and the IMF Turns into a Fiasco
Jill Richardson
Getting Past Gingrich
Dave Lindorff
Not a Blue Wave, But Perhaps a Foreshock
Martha Rosenberg
Dangerous, Expensive Drugs Aggressively Pushed? You Have These Medical Conflicts of Interest to Thank
Will Solomon
Not Much of a Wave
Nicolas J S Davies
Why Yemeni War Deaths are Five Times Higher Than You’ve Been Led to Believe
Jim Goodman
We call BS! Now, Will You Please Get Over This Partisanship?
Josh Hoxie
How Aristocracies are Born
Faisal Khan
The Weaponization of Social Media
James Munson
The Left Has Better Things to Do Than Watch Liberals Scratch Their Heads
Kenneth Culton
The Political Is Personal
Graham Peebles
Fracking in the UK
Alycee Lane
The Colonial Logic of Geoengineering’s “Last Resort”
Kevin Basl
How Veterans Changed the Military and Rebuilt the Middle Class
Thomas Knapp
Election 2018: The More Things Don’t Change, the More They Stay the Same
Gary Leupp
Europe and Secondary Iran Sanctions: Where Do We Go Now?
Saurav Sarkar
An Honest Look at Poverty in the Heartland
FacebookTwitterGoogle+RedditEmail