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Labor pains

30 September 2012

On its way out the door, the Calderón Administration has pushed through a labor “reform” package with undue haste that frankly I haven’t had time to digest, nor — I suspect — has anyone else.

Introduced under new PAN sponsored laws that allowed the president to “fast track” legislation, the Calderón Administration introduced a bill on September first, giving the Chamber of Deputies only 30 days to consider a package that — on the face of it — conflicts with several international treaties, radically changes the nature of the relationship between labor and management and probably force major constitutional changes.  When the bill emerged from committee, 270-odd clauses were “reserved” — one party or another wanted to discuss modifications — but only two days to discuss the modifications.  The sitting speaker supposedly became ill on Thursday and was rushed from the chamber in a wheel-chair, forcing an adjournment, and cutting further into the time allotted for modifications.  The bill passed (from the balcony of the Chamber, after opponents, in a last minute bid to halt the proceedings, occupied the podium) 351 to 130 with 10 abstentions.

The most talked about change is that wages will be calculated by the hour.  Right now, as every “concern troll” mentions, the minimum wage is about 5 US dollars a day.  That sounds low… and it is.  But, that minimum wage applies no matter how many hours the job takes (as long as it is less than eight) and includes a substantial benefits package including health insurance.  If the job lasts all day, most employers also have to feed their employee.  At least, in theory, that wage is enough to support a family of four (not well, but enough to cover the basics). In reality, at least two members of any family will be bringing in at least some income, and they will have some small measure of financial security, as well as the time and energy to devote to familial life.   However, calculated by the hour, the minimum wage is closer to 60 cents an hour.  Employee benefits will be calculated based on the percentage of a “full day”… that is, a four hour worker will only receive half the benefits package points when it comes to things like social security and retirement.   While this will, as the defenders of the new system claim, create “more employment” it also creates less security.  The advantage to employers to create more half time jobs, saving the overhead paid out for benefits like those meals, are obvious.

And, for low-paid workers like house-cleaners, who seldom have to work a full eight hours, their only recourse is either to work several jobs, or to fall even deeper into poverty.  In theory, maybe a minimum wage worker could earn more by working a couple of different jobs… but just consider the time between jobs.  Bus fare where I live is 6 pesos (about fifty U.S. cents… or 40 minutes labor under the new minimum wage).  A workers with two minimum wage jobs, even if they were almost back to back, is going to not only lose an hour or so of his or her personal time in transportation, but those 12 pesos, or more than an hour’s wage.  There is no way a minimum wage worker comes out ahead.

Foreign commentators (and those pushing this bill) have spoken of making “it easier for employers to hire and fire workers, streamline the settlement of time-consuming labor lawsuits and formally regulate outsourcing”.  Workers who have been fired (which, under the new regulations could be something as a simple text message saying “adios, pendejo”… in other words, turning Mexico into Texas with it’s “fire at will” provisions in employment contracts), or laid off, weren’t usually the source of those “time consuming labor lawsuits”.    Of course, you hear stories (usually from employers) about not being able to fire a light-fingered cleaner, or a lazy and terminally stupid employee, but nearly every instance I’ve known about personally was a matter of the employer unwilling or unable to to pay out the severance package (based on a number of factors, including length of service) — or where the employer didn’t really have a logical reason to let their employee go and was just making up a story they thought sounded believable.  Regulated outsourcing, while an option for some kinds of work (I was a “freelance” tech writer for years, and while the rent-a-geek trade paid well, there was no guarantee from one day to the next I’d still have a job) is usually not considered an option for any sort of long-term employment.

And, perhaps most alarming of all — at least to historians — is the assault on the letter and spirit of the Constitution, specifically of the “sacred” Article 123.

There are streets and colonias and communities  in Mexico named “Articulo 123”  for a reason.  That section of the Constitution of 1917  is of more than just a theoretical interest to lawyers and policy wonks: rather, it  changed the world.  The 1917 Constitution was the first to spell out the rights of workers, and although continually tweaked over the years, was a milestone in the history of human rights… establishing a baseline for working conditions, and for spelling out the basics of labor-management relationships.  Mexico was, back in the 1920s and 30s, sometimes called “Bolshevik Mexico” — usually by corporate management types — not so much because the new Soviet Union used the Mexican constitution as a template for their own (soon discarded) Constitution of 1924-25 — as because Mexico had altered the balance of power between labor and management.

What made Articulo 123 so “radical” was that it acknowledged the rights of workers to combine and act in their own self-interest (and gave management the same rights.  While this was hardly a dictatorship of the proletariat, even calling Mexico — as many did — a “worker’s state” is something of a misnomer.  The article does give labor more extensive rights than most places, and does upend the usual balance of power between workers and management, but in spelling out the specific rights of labor, it gave to both labor and management the right to combine in pursuit of their own interests.  In other words, while the Constitution blessed unions, it also blessed Chambers of Commerce and trade associations.   And, much to everyone’s surprise, it also legitimized the first clerical strike in history… when the Catholic Church, hoping to force changes in the parts of the Constitution defining the religious rights, was within their rights to simply stop providing services to their “customers”.

That labor rights were enshrined in the Constitution, and that Mexico was a “workers’ state”, is largely a reflection of the important role organize labor played in the Revolution itself.  While proto-unions (unions did not exist under the Diáz dictatorship, although there were underground anarchist and syndicalist organizations), and skilled workers — especially railroaders — were of importance in organizing resistance to Diáz, and the anarchist Flores Magon brothers helped swing worker support to Francisco Madero, it was Alvaro Obregón who recognized that organized labor was key to creating a modern state.  While the Red Brigades — the workers’ militias Obregón relied on to put down challenges to his “consolidated” government — more importantly, his government fostered unionization as a means of creating a counterweight to anti-revolutionary groups, like the Catholic Church and foreign corporate interests.

Luís Napoleón Morones

One of the more important unions, SME (Sindicato Mexicano de Electricistas), founded by Luís Napoleón Morones in 1915, became the backbone of CROM (Confederación Regional Obrera Mexicana) which, under Morones, was for all practical purposes an arm of the state under Calles.  Appointed Secretario de Economía in 1924, Morones’ flamboyance (he liked to wear diamond rings… about 10 at a time) earned him a reputation as particularly “corrupt”.  Given that the Cuernavaca neighborhood where several of Calles’ cabinet ministers and cronies had homes was known locally as “the Street of 40 thieves” it’s hard to say that Morones was any more, or less, “corrupt” than any other high-ranking Mexican official at the time, but — especially among the corporate-minded and the conservatives who rejected the Revolution — “union corruption” has always been somehow seen as worse than some other kinds.

With Cárdenas (who incidentally forced Morones into exile… in Atlantic City, New Jersey) openly encouraging unions to take a proactive role in challenging the status quo, and giving his administration cover to take seemingly radical actions like nationalizing the oil industry (technically done to enforce a court order resolving an oil workers’ strike), the conservatives saw independent unions — and the workers in general — as more and more an impediment to their own vision of a modern state.

With the PRI, founded after World War II, seeking at least on paper to preserve the Revolution, but at the same time, meet the demands of foreign investors and the emerging new industrial leaders, the answer seemed to be to bring the unions under state control.  While the best of the PRI sought (in all sincerity, I think) to create stakeholders in the party/state out of the workers, simply co-opting the union leadership, making the unions simply appendages of the party.  This was the era of the “cowboy unions” (sindicatos charro) — so named for the sartorial style of several early leaders.

Unionists who went along with the party were generously rewarded, and the party and the administration did everything possible (including, quite likely, assassinating union dissidents) to guarantee the tame leaders stayed in place, and the union’s goals matched those of the administration… even when such administrative goals were not in the worker’s best interests.  The railway workers, PEMEX employees, miners  and the SME (Morones’ old union) were the major holdouts.

Handling recalcitrant labor organizers. Railroader Demetrio Vallejo taken before a judge in 1959.

The 1958 railway strike, which threatened to turn into a general strike, was put down by the army, and was used to both to force the railroad workers into the “family” and to destroy the Communist Party (David Alvaro Siquiros, the Stalinist artist, was among those who spent several years in prison for his part in organizing anti-government actions).  Students, of course, could not be unionized easily, and the student strike of 1968 which was rapidly spreading to the workers, also led to a violent backlash, followed by a complete revision of basic labor law in 1970.

One needs to remember that at the time, mining, oil production and the railroads were all under state control.  While under the 1970 labor bill, unions continued to focus on “lunch bucket issues” — salaries and benefits, the Party continued to focus on union control, although a dissident faction within PEMEX (which is where Andres Manuel López Obrador made his political debut) and in other unions (notably the Teachers’ Union) would emerge, and ally itself with the dissidents who backed Cuauhtemoc Cárdenas in the stolen 1988 Presidential election.

A friend of mine, who was the Human Resources Manager for a large foreign owned company, once shared some insights on contract negotiations in the post 1970 era.  Basically, management would propose some minor adjustments in salary, and the union leaders were “advised” on how to sell the package to their rank and file. And given a “consideration” for their assistance in preserving labor peace for the previous contract period.  And assistance in any upcoming union elections.

Although PRI continued to have both labor support (at least that of its tamed union’s leadership), its economic vision — in the eyes of the left — was became indistinguishable from that of the U.S. oriented PAN after 1988.  Vicente Fox’s victory in 2000 only verified the trend  towards a management-focused labor policy.  With denationalization well under way, the Fox Administration — when

The face of modern labor… or one of the many lifted faces, anyway.

it just didn’t ignore labor — openly courted PRI unionists like Elba Esther Gordilla in pushing issues not directly related to labor, but within line with Fox’s conservative party’s values.  That is, in exchange for Gordilla’s support in radical changes to the educational curriculum, Fox turned a blind eye to the suppression of the dissident teachers’ union seeking to oust Gordilla.

Under Calderón, the benign neglect of labor has ended.  Starting with the heavy-handed suppression of teachers’ union unrest in Oaxaca, under the rubric of “security”, the Calderón Administration’s labor policy has been somewhat analogous to his “drug policy”.   The fight against narcotics traffickers has focused on weakening opponents to the Sinaloan “cartel”, much as Calderón’s attacks on union “corruption” have focused not on charros like Gordilla, but on the few remaining independent unions:  the miners and — most notably — the SME, Morones’ old union.  SME, of course, also stood in the way of privatizing cable access in the Federal District (the union owned the electric company, and had the access rights to underground cable) and under the claim that SME’s leadership was “corrupt”, he used military force (in the middle of the night) to seize the union’s assets and decertify the union.  Mining taking place mostly in relatively isolated places, or at least outside the Federal District, force used against miners and their unions on behalf of management (mostly Canadian) has been less noticed by the outside world.  Again, under the claim that the miners’ unions are “corrupt”, they have been broken up into manageable pieces (as with the smaller “drug cartels”) and made ripe pickings for the government supported unions (as those smaller cartels are by the Sinaloans, or the Zetas).

So, who really benefits and why would anyone in Mexico support this bill? 

The answer to that comes courtesy of U.S. neo-liberal apologist Fareed Zakaria (or rather,  Ravi Agrawal, “senior producer of Gareed Zakaria GPS):

Part of Mexico’s appeal to investors is tied into what I think may be the country’s key weakness: inequality. You see, at the lowest-end, labor remains cheap. The Economist points out that in 2003, Mexican pay was three times China’s rates; now it is only 20 percent higher. So Mexican manufacturing is poised for a boom. And while in the past few years Mexico banked on its proximity to the U.S. (lower transport costs) and trade deals like NAFTA to compete with China, it will now be able to manufacture and price products at an advantage.

The advantage, as Zakaria’s minion gleefully suggests, is that by creating more inequality in Mexico is making the country “competitive” in a race to equal the appalling conditions of workers in a one-party, anti-democratic state… to the benefit of U.S. corporations and investors.

One Comment leave one →
  1. 30 September 2012 11:18 pm

    The last-minute lame duck ambush on workers’ and the lowest levels of income in Mexico had to have been long planned. What’s odd and amazing to me is that it received so many votes.

    It appears corporate ownership overlords have come to own politicians of any party in Mexico, just as they do in the US.

    What are the legacies of the Calderon years? A 6 year blood bath across the nation the likes of which haven’t been seen in most developed nations and…. giving the shaft to the workers of the country at the last minute.

    Is there any chance that the new Congress will repeal or amend this rushed through mess? Or will Mexico be stuck with it, to the glee of the race-to-the-bottom neo-liberals (aka, fresh water economists in Paul Krugman-speak).

    And while I’m ranting, when will nations begin to address the “missing” component in every international trade treaty. The neo-liberal (and tragically mistaken) notion is that Capital and Goods & Services should travel as though there are no borders. But Labor is not permitted the same privilege.

    Why not? Because that would undermine the profits of the supposed “capitalists” (really simply new style colonialists) and allow workers freedom from the economic destruction caused to them through “free trade” treaties. Simply put, neo-liberal trade policies benefit the rich at the expense of the poor. And the poor, after all, must be kept in their place at all costs.

    Appalling. A word I find myself using too often, but applicable again.

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