Low Wages, No Labour Rights the Norm in Mexico

By Daniela Pastrana Reprint | | Print | |En español

MEXICO CITY, Nov 6 2012 (IPS) - Miguel* is one of millions of Mexicans scraping by on a meagre income – he earns 60 dollars a week working 11 hours a day in an electronic products store in the northern city of Mexicali.

He walks home – it takes him 20 minutes – to save on bus fare, which would cost him a dollar.

“There are only two things to do here: work and drink beer,” he tells IPS in a room where he has just a bed and a small TV set. “We all have to work overtime, to boost our wages,” adds the 41-year-old, who lives alone.

Some 2,500 km from Mexicali, the correspondent for a national daily in the eastern state of Veracruz is paid just 15 dollars per article. On top of the low wages, he works in the most dangerous country in the Americas for journalists, where a record nine reporters have been killed in the last two years.

Like many of his colleagues around the country, he does not have social security, labour benefits or healthcare coverage. He spends half of what he earns travelling to Mexico City every two weeks to take a course on journalism and human rights.

Things are not much better in the capital. Juan, a designer who has taken masters’ level courses, earns 90 pesos (seven dollars) an hour teaching at a private university. He doesn’t have social security coverage either. He works freelance to increase his income. But as a professional, he pays one-third of what he earns in taxes.

“In this country, the biggest problem is not unemployment, but precarious job conditions,” Alberto Arroyo Picard, a researcher at the Autonomous Metropolitan University and a member of the executive board of the Mexican Network for Action Against Free Trade (RMALC), told IPS.

In this country of 112 million people, 2.5 million are unemployed, according to the latest figures from the National Institute of Statistics and Geography.

The outgoing government of conservative President Felipe Calderón boasts that Mexico has a lower unemployment rate than other countries in Latin America, like Brazil. But it fails to note that working conditions here are often dismal.

For example, while 51 million people are counted as “employed”, 12 million of that total are in the categories of “under-employed” (those who work less than 15 hours a week) or “critical conditions” (less than 35 hours a week or earning less than the minimum wage). And 14.2 million are active in the informal economy.

These figures on the precarious conditions of labour contrast with Mexico’s fairly robust economic performance. According to the World Bank, the economy grew 3.9 percent in 2011, and the projections for this year and next are 3.5 and 4.0 percent, respectively, despite the global crisis.

Only 16 million people have social security and labour benefits – less than one-fourth of the economically active population, according to the most recent data from the Mexican Social Security Institute. And of those, two million are on short-term contracts or are temporary workers.

But conditions are set to get even worse. A bill before Congress would make it easier to hire and fire workers, and would create trial employments periods, allow companies to hire employees on an hourly basis, and legalise subcontracting and outsourcing.

The ambitious overhaul of the country’s labour laws is opposed by left-wing parties.

“What they are doing is legalising infamy,” Salvador Arellano, the secretary-general of the Commercial, Office, Retail, Similar and Allied Workers’ Union (STRACC), told IPS.

Patricia Juan, of the Authentic Labour Front (FAT) independent confederation of unions, said the proposed reforms would not only further reduce the cost of labour and undermine job stability, but would inhibit collective bargaining and make it more difficult for workers to organise to defend their rights.

“That is the last social right we have left in Mexico, besides free education, which is going to end soon,” she said. “Since you’ll be on trial all the time, you’ll accept anything in order to keep your job.

Although outsourcing and subcontracting have existed in Mexico informally for the past two decades, the effects of the global economic crisis that broke out in 2008 have led to their expansion to virtually every industry.

To illustrate, nearly half of all bank employees in Mexico work under outsourcing arrangements.

Of the 42 banks currently operating in the country, in 11, nearly all of the employees work under an outsourcing regime, including BBVA Bancomer, Banco Wal-Mart and Inbursa, which belongs to billionaire Carlos Slim.

And according to the Mexican Association of Human Capital Business (AMECH), which represents employment services companies, outsourcing of services is growing by about 10 percent a year.

But the finance ministry has identified outsourcing companies that evade taxes. The federal audit office of the tax administration service (SAT) reported that outsourcing is responsible for more than 300 million dollars a year in tax evasion.

The proposed labour reform was approved by the Senate in late October but sent back to the lower house of Congress, which has to decide on articles aimed at opening up labour unions to greater scrutiny – a demand set forth by business and independent workers and opposed by the Institutional Revolutionary Party (PRI), which will govern the country after president-elect Enrique Peña takes office in December.

But the rest of the articles have already been approved and will not be modified.

“The Chamber of Deputies could delay passage of the law if it does not consider the union question a priority issue. But the aspects involving civil rights are irreversible,” labour lawyer Manuel Fuentes told IPS.

The next step, he said, is to exhaust all of the legal options to fight the bill. For example, different labour groups will ask the National Human Rights Commission to challenge the law as unconstitutional.

But he is not optimistic.

The problem is that just nine percent of wage-earning workers are unionised in Mexico, and only those who belong to independent unions are willing to wage a battle against the labour reforms.

And in a country where wages have lost 76 percent of their buying power in the last 30 years, and three-quarters of workers have already lost their rights, people are more concerned about holding on to their jobs than fighting for better conditions.

*The names of the interviewed workers have been changed to respect their privacy.