Laboring to understand the role of unions in Mexico
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| Immigration reform in the U.S. could have devastating effects on the economy in Mexico, so Bob Greer is looking at how unions help or hinder their progress. |
Fort Worth, TX
6/6/2008
Though plagued by poverty, low-wage jobs and underemployment that drive many of its citizens across its borders, Mexico actually possesses a number of economic strengths, management Professor Charles R. (Bob) Greer says. For instance, it has the world’s 12th largest gross domestic product, a population topping 108 million and is rich in oil and minerals.“You have the resources in Mexico and a large economy with a relatively large population. But then you have people streaming into the U.S. because they’re looking for work,” said Greer, the lead author on “The State of the Unions in Mexico,” an overview of Mexico’s industrial relations system, published in the winter edition of the Journal of Labor Research with management Associate Professor Gregory K. Stephens and Charles Stevens.
“As the U.S. debates the issue and comes up with a policy for handling illegal immigration, it could remove an escape valve for the Mexican economy. Then what happens? How much instability in Mexico would result from drying up alternatives for people who can’t find work in their own country?”
Strange Bedfellows
Greer’s overview of the industrial relations system in Mexico examines union density in both membership and actual representation of workers, major confederations as well as individual unions, effects of global labor markets and union trends over time. It details how unions are regulated by legislation in Mexico, including the impact on wages and working conditions.
“A big part of how labor relations are conducted in any country is based on the legislative environment in which unions operate,” he said. “In Mexico the relationship between the government and labor unions has been a very interesting one. The PRI [Partido Revolucionario Institucional] had been in power for 70 years as sort of a one-party system in Mexico — very stable but very undemocratic and thoroughly corrupt. So the PRI, the big governing party, and the CTM [Confederación de Trabajadores de México], the federation for labor unions, essentially had a symbiotic relationship, and both were corrupt.”
As economic pressures intensified in the last 15 years, the government began to distance itself from the CTM and its affiliated unions. “They were pursuing the low-wage policies as a means to generate jobs in Mexico — competing in the global economy on the basis of low wages,” Greer explained. “That’s inconsistent with unionization. That’s a natural source of stress for their relationship. Then the PRI was voted out and they actually had democratic elections in Mexico and Vicente Fox was elected president. So they no longer had a natural linkage between the PRI and the CTM.
“Politics and the political environment in which labor relations are conducted in Mexico are unique. It’s obviously an issue, or at least a dimension, of labor relations in any country, but in Mexico, given the history and the corrupt state of their major labor federation and their national party, it was noteworthy.”
Unions in Mexico?
One of the developments of a more democratic Mexico is the increasing viability of unions that truly represent workers’ interest. But getting reliable figures for union membership proved challenging to Greer, Stephens and Stevens.
In CTM-affiliated unions, employees may be “represented” by a union, but there is no real representation. In these “ghost unions,” the union signs a contract with the employer, which prevents another union from coming in and representing employees — so the employer is protected, yet employees get nothing in return.
“It’s a sham,” Greer said. The quality of representation often has much to do with location as well. The farther south you go in Mexico, the more supportive the environment for labor relations. Nearer the U.S. border there are many maquiladoras, operations run by multinational companies, in which employees perform jobs requiring only minimal skills, such as assembly work. Before NAFTA, the maquiladoras were the means by which work on U.S. materials could be performed in Mexico and then brought back into the U.S.
“Some maquiladoras have unions, but it’s mainly ghost unions. They are very lightly unionized and pay low wages. Workers are young and unskilled and typically aren’t in those maquiladoras very long,” Greer said.
Stability Has Its Price
Many of the challenges in Mexico result from its political system and uneven distribution of wealth.
“They’ve really been unsuccessful, as most countries have, in trying to redistribute the wealth,” Greer said. “There are fabulously wealthy people, and so you have this tremendous concentration of wealth with an economy that continues to struggle. Labor unions in the most basic sense are conflict resolution mechanisms dealing with the allocation between labor and capital. Labor unions then provide a means for dealing with the conflict between these competing interests.”
In Mexico — indeed, in the entire industrialized world — unionization is decreasing, as is lost time due to strikes. But the need for unions remains, Greer said.
“In the absence of an effective labor relations system, then the conflict could be resolved in the streets. So it’s important that Mexico does have an effective labor relations system.”
A viable system will be even more important if the U.S. establishes effective illegal immigration reform. For years, Greer said, Mexican officials have not had to address the problems in the economy “because they could limp by with this access to U.S. jobs.”
The question remains: As economic pressures shift, can the Mexican political system create the kind of reforms needed to provide more employment in Mexico?
“While the PRI was in power for 70 years, everything was suppressed in Mexico,” Greer said. “Governments weren’t democratic. Unions weren’t democratic. You had a tremendous price paid for 70 years of [government] stability. The economy has been stagnant in recent years in Mexico. And we’ve been overwhelmed by people coming to the United States illegally. It will be interesting to see if a viable labor movement with some growth and reform will address some of these underlying problems.”
He added, “Here’s the big problem right now: Labor unions are not magical. They can’t simply raise wages to the benefit of everyone — they raise wages for some at the expense of people not represented by unions.”
Unions do provide safe working conditions and ensure there are fair processes involved in discipline, but the very protection that unions have ensured in many parts of the world is the same reason they are declining — many of the employee safeguards have been written into law.
In countries like the United States, legislation now performs some of the roles unions once played. This is true to some extent in Mexico, though enforcing the legislation is another issue. And only time will tell if Mexican unions can help raise wages as the country competes globally. For example, Greer noted, a maquiladora operating in Mexico could close its factories and be operating in a country like Indonesia — paying workers even less — in a matter of weeks.
“It’s almost a race to the bottom, unless you have a unique work force with skills that other countries don’t have.The people I know in Mexico, they don’t see the maquiladoras — which are employing hundreds of thousands of Mexican employees — as a good solution. They want high-paying jobs, they want workers to have strong skills, but it’s been sort of this temporary solution for a while. In these small towns in Mexico, jobs have evaporated, so young people gravitated north to the maquiladoras and the United States.”
Methods and Madness
For the study, Greer and his co-authors drew from their own research as well as a range of resources that included both scholarly work and trade figures. A major challenge was in gathering reliable statistics on the Mexican economy.
“In the U.S., you have wonderful data sources on labor unions, on the economy, on employment,” he said. “There are just few data sources in Mexico.”
As Greer delved into the relationships between the government and unions, surprising findings demonstrated the uniqueness of Mexico. Consider Mexico’s state-run and unionized oil company, Pemex. Wages are high and workers likely require solid connections to get a job, but the company is extremely inefficient.
“Here you have a source of high-paying jobs built around the oil companies — like in Houston. In Mexico, it’s the same situation except it just doesn’t work,” Greer said. “And that would probably be their shining star in terms of a unionized work force. But the organization is managed so poorly and they are so inefficient that they’re not doing a good job for their country.”
Will Unions Deliver?
In Mexico’s paradoxical fashion, just as some unions are corrupt, others in the heart of Mexico are serving their members well.
“There are several world-class companies in Mexico,” Greer said. “So here’s what you find: several unions that do a good job of representing employee interests, a few large world-class companies with very bright people running them, lots of small and medium-sized companies, and a fair amount of natural resources. But the whole economic and political system of the country doesn’t translate into a robust economy with high-paying jobs.”
So will independent labor movements actually protect employees’ rights and provide a mechanism for Mexico to have a peaceful transition through these difficult times? What role will they take as a conflict resolution mechanism?”
Time will tell. “There’s a lot riding on it,” Greer said.
More at http://sbuweb.tcu.edu/greer/