ON AUGUST 12, President Bush, Mexican President Salinas and Canadian Prime Minister Mulroney announced the conclusion of negotiations over the North American Free Trade Agreement (NAFTA) to encompass Canada, Mexico and the United States. In early October, presidential candidate Bill Clinton expressed reserved support for NAFTA, yet stipulated that he will only endorse an agreement that guarantees protection of U.S. jobs. In the United States, much of the debate over the agreement has focused on NAFTA's threat to U.S. workers. Economists and labor leaders argue that the current version of NAFTA will inevitably result in an enormous loss of U.S. jobs as corporations relocate to Mexico to take advantage of lower wages and lax enforcement of standards. Both the AFL-CIO and the Washington, D.C.-based Economic Policy Institute estimate that approximately 500,000 U.S. workers will lose their jobs to lower-paid Mexican workers if the agreement goes through.
Less frequently discussed north of the U.S./Mexican border are the grave implications of this agreement for Mexican workers. Over the past 20 years, multinational corporations have relocated to Mexico to take advantage of the country's maquiladora system, which provides non-Mexican corporations incentives to export into the United States. Wages, as well as environmental and labor standards, are notoriously low in the maquilas. In light of the proposed agreement which will expand the maquila system throughout the country, Dan La Botz's disturbing book on labor rights in Mexico becomes all the more urgent.
Mask of Democracy: Labor Suppression in Mexico Today examines the history of the labor movement in Mexico, focusing on the country's legal system which sanctions and promotes labor repression and on the effects of privatization and export- driven development on Mexican workers and unions.
La Botz outlines the working and living conditions faced by Mexicans today. Wages are half of what they were 10 years ago; the unemployment rate hovers at 25 to 30 percent, not accounting for the underemployed; safety and health conditions, already low, are deteriorating. Working conditions are tougher for Mexican women who work both in the formal economy and in the informal sector as street vendors, domestic workers or homeworkers and earn even lower wages than their male counterparts. Few have access to daycare, severe sexual harassment in the workplace is rampant and women's role in the labor movement is severely restricted. Mask of Democracy also notes that millions of Mexican children work illegally, often in hazardous jobs.
La Botz argues that employers, the corrupt leadership of "official unions" and the repressive Mexican government use brutal methods to squash attempts by workers to protest these conditions or advocate for change. "Employers and union officials have ... threatened, beaten, kidnapped or even murdered labor activists. Those responsible for the violence are seldom brought to justice. The government repeatedly and continually uses massive police and military force to keep workers and unions under the control of [Salinas's ruling Institutional Revolutionary Party] the PRI," he writes.
The book makes the case that the Mexican legal system is designed to deny workers' rights. La Botz writes, "The Mexican institutions which deal with labor are organized to ensure control by the official party and its unions, in an embrace that strangles all initiative or freedom. Mexican labor law and the institutions which administer it systematically deny workers their fundamental rights to free association, to labor union organization, to internal union democracy, and to carry out their own programs."
Most union members have been forced to join unions affiliated with the PRI, many as a condition of employment. Both the Boards of Conciliation and Arbitration and the Secretary of Labor regularly refuse to grant labor union charters to independent unions, with the exception of "white," or company-controlled, unions, which are routinely chartered. State labor authorities routinely deny workers the right to strike by declaring their strikes illegal or non-existent on the basis of technicalities. Rank-and-file union members have little or no control over union policies or leadership - dissident workers can be expelled from the union by an exclusion clause which also allows employers to fire them.
La Botz examines several private sector strikes and concludes that the Salinas administration's push toward privatization and free trade pose significant threats to Mexican labor. "[Workers] demanding their rights be respected in the private sector," he writes, "are an even greater detriment to Mexico's �modernization' program based on a cheap-wage force and production for export than are public sector workers, and are therefore at greater risk." Workers at the Modelo Brewery, the Tornel Rubber Company and Ford Motor Company were all deprived of basic labor rights including the right to bargain collectively and to strike. Workers at all three companies met with physical and legal abrogations of their rights when they attempted to organize.
Perhaps most significant in light of the move toward NAFTA is La Botz's examination of the maquiladora system as Mexico's chosen model of development. Wages have plunged in the maquilas, from an average U.S. $1.38 per hour in 1982 to an estimated $.51 per hour in 1991. Exposure to toxics and environmental contamination along the U.S./Mexico border where the maquilas are located pose grave threats to workers' health. Workers in the maquilas receive little help from their unions, the majority of which are affiliated with the PRI.
Mask of Democracy is a thorough and well-researched examination of the origin and current state of labor repression in Mexico, based on compelling interviews with Mexican workers and activists. It is particularly vital reading at a time when free trade is being strongly advocated by industrialized nations. The book is written with a deep understanding of what the corporate push for global economic integration will mean for labor standards and the lives of workers throughout the world. La Botz writes, "Mexican workers and their labor movement have already felt the impact of freeing trade for an entire decade. As they have been required to shape themselves into a cheap labor force with no rights, in order to make themselves more appealing to potential investors, they have lost their human dignity inch by inch."n
- Holley Knaus
Banking on the Brink: The Troubled Future of American Finance
By Roger J. Vaughan and Edward W. Hill
Washington, D.C.:
The Washington Post Company, 1992
366 pages
ONE THOUSAND U.S. BANKS are dying and perhaps 1,000 more are on the edge of insolvency. According to Banking on the Brink, a major new study by Roger J. Vaughan and Edward W. Hill, banks, which report all loans at their original value, are obscuring investment deterioration - particularly in "nonperforming" and commercial real estate loans. Banking on the Brink presents data which discount troubled loans at each of the over 12,000 banks and 1,500 bank-holding companies in the United States to estimate what the loans are actually worth.
When this accounting veil is lifted, Vaughan and Hill find that it would have cost the District of Columbia more than $50 billion to bail out sick banks at the start of 1992. Today, the cost has climbed up to perhaps $75 billion, and could exceed $100 billion if the problem remains unresolved.
Vaughan and Hill dispel important myths about U.S. banking health, providing the following conclusions:
Regardless of industry claims, Banking on the Brink finds that a taxpayer bailout of sick banks, at the cost of higher taxes, lower investment in infrastructure and cuts in federal services, is "virtually certain." Bank customers will suffer lower interest rates on accounts and higher charges on services, borrowers will be subject to credit rationing and everyone will experience slower economic growth and fewer jobs in the United States. It is not an optimistic picture, but as the authors remark, in this case, "The truth may not set us free, but it's a start."
- Julie Gozan