This article is from Dollars & Sense: Real World Economics, available at http://www.dollarsandsense.org
This article is from the July/August 2020 issue.
Subscribe Now
at a 30% discount.
Essential—and Expendable—Mexican Labor
On both sides of the border, Mexican workers are now essential—to U.S. corporations.
Lear Corporation—one of the world’s largest auto parts manufacturers—rose to position 148 on Fortune magazine’s famous list of the 500 largest firms in 2018. It operates with roughly 148,000 workers spread across 261 locations. Its largest presence is in Mexico, where approximately 40,000 low-paid workers make seats and labor-intensive electronic wiring systems to be used, primarily, by the U.S. auto giants in auto-assembly plants on both sides of the border. The largest share of these workers slog away in three huge Lear plants located in the notoriously dangerous border town of Ciudad Juárez in Mexico.
On April 10, 2020 a worker named Rigoberto Tafoya Maqueda died from Covid-19, which had swept in from the north. He had been diagnosed in Lear’s clinic with a mild allergy and was forced to continue working without a face mask, gloves, or hand sanitizer. A short time later, he went to the government’s Social Security hospital, on foot, where he died. Four days later, according to Lear, 13 more workers at the plant had died—but the workers’ labor union claimed that the actual number of work-related deaths from the pandemic was 30. Lear claimed it was not responsible in the least, while offering hollow condolences to surviving family members.
As of late May, no investigation of the workplace had been conducted and no legal charges of negligence had been raised against Lear or any of the other 320 maquiladoras—also known as maquilas, or more recently, by outraged workers, as “makilladoras”—that employ approximately 230,000 in Juárez where workers have been sickened. By early May, 104 of these workers had perished, by early June the estimated number of worker deaths was above 200. In all of Mexico, this city, with the largest concentration of low-wage assembly plants, had the highest incidence of pandemic deaths—a mortality rate 2.5 times the national average.
Tijuana is the city with the second largest number of maquilas in Mexico. There, one in four “formal” sector workers (workers with registered jobs and certain rights to health care) furnish low-wage labor producing components for automobiles and many other industries. Tijuana is located in the state of Baja California in Mexico, where the highest number of pandemic deaths—519—had been recorded as of May 15. Of those deceased, 432 were maquila workers. By June 4, Tijuana had the highest number of Covid-19 deaths, 671, of any city in Mexico.
U.S. Business, U.S. State Department Demand: The Maquilas Must Open
Ciudad Juárez and Tijuana are tangible symbols of the imposed power structures under which transnational corporations operate throughout the global South, most particularly in Mexico. In these two border cities, 1,000 miles apart, we find nearly one-fifth of the maquila workforce—500,000 out of a total of 2.6 million workers. Here, in response to corporations’ treatment of workers during the pandemic, the scene has included bitter strikes, social outrage, and numerous well-attended protests all aimed at imposing plant closures and paid leave. The plant owners have refused to assume any responsibility whatsoever for their negligence, insisting that the work must go on. Instead, they have pressured local and federal governmental agencies to ensure that, in spite of an unsanitary environment, no new safety and health regulations of the workplace will be imposed. After reopening in late May, the plants have taken some measures to reduce health risks among the workers, including the use of masks and plastic dividers at workstations (see photo of seat assembly) and in company lunchrooms.
At the same time, plants have increased the pace of production exponentially. Even with the measures taken, there have continued to be outbreaks of Covid-19 at the assembly plants. Indeed, the long-powerful U.S. National Association of Manufacturers (NAM) has used every opportunity to ensure that no sustained period of plant closures be implimented—including sending an unprecedented letter to Mexico’s president on April 22, signed by 327 corporate titans who enjoy the lucrative benefits of sweating Mexican workers. Signatories included the heads of 3M Corporation ($32 billion in sales in 2019), Arcelor/Mittal USA ($15 billion in sales 2019) and Caterpillar ($54 billion in sales 2019). Using a lot of imagination, and no small amount of chutzpah, these captains of industry demanded that President Andrés Manual Lopéz Obrador (or AMLO, as he is known)—who had declared at the start of his presidency that the neoliberal era that had defined Mexico’s economy since 1986 was over—declare that Mexican autoworkers were engaged in an “essential activity.” The letter demanded that the president assure that “all interruptions in the North American manufacturing supply chain would be minimized in these critical moments.” AMLO responded immediately by stating that Mexico and the United States would come to an agreement and that “there were exceptional questions” to resolve with the United States.
Has there ever been an occasion when a president of a sovereign nation has been told that its populace—beset by a vicious pandemic—would have to march into poisoned plants in order to maintain the profit margins of foreign-owned corporations?
If that was not enough, Christopher Landau, the U.S. ambassador to Mexico, gave himself a pat on the back in late April by declaring via Twitter, “I’m doing all I can to save supply chains between Mexico, the United States, and Canada.” Immediately joining the fray, the employers’ and manufacturers’ “peak business organizations”—long the real rulers of Mexico—began to lobby and orchestrate political pressure to guarantee that maquila output would not be interrupted. The large owners associations included the Consejo Coordinador Empresarial (CCE), which is comprised of the largest Mexican firms, and the arch-conservative Mexican Employers Association (COPARMEX), which was formed in 1929 by the anti-union oligarchy based in industrial Monterrey, echoed the arguments presented by the NAM. Also joining in was the Association of the Mexican Auto Industry (which was founded in 1951 by Chrysler, Ford, General Motors, Nissan, and Volkswagen, and lists no Mexican-owned companies as members).
A National Security Issue?
At this point, an unexpected actor entered the scene: The Undersecretary of Defense of the United States, Ellen Lord, declared to reporters in late April, “I think one of the key things we have found out are some international dependencies…” adding that “Mexico right now is somewhat problematic for us.” In her remarks, Lord said nothing about Mexican workers becoming deathly ill, or worse, that toil in the maquilas, now located throughout the country (not just on the U.S.-Mexican border). She also added the “National Security” argument to her framing of the pandemic’s impact on U.S.-Mexico supply chains: “these companies are especially important for our U.S. airframe production.” And, indeed, over the past 20 years the United States has outsourced a modest amount of aerospace production: in Mexico this consists of labor-intensive components that are used by the U.S. civilian aviation firms, along with some Pentagon military contractors, and are typically manufactured in maquilas. One example of this minor sideline of maquila manufacturing—and the conditions that workers face at these factories—is a Honeywell plant in Juaréz where, on April 22, workers engaged in a three-day wildcat strike after learning that Covid-19 had spread into the plant, killing at least one worker.
One protesting worker summarized the situation:
They do not want to give us [sick] days, we are worried because of the pandemic, management does not listen to us, they only tell us [to keep working] and they will give us a bonus of $18-$31.50 [dollars per week] but they will not respond to our demands, we have been on strike three days but the truth is that they are paying no attention to us.
Inaugurating the USMCA
The U.S. pressure game got quick results: on May 12 the Mexican government declared the aerospace maquilas (which, as of 2020, had only 57,000 direct employees) and the very large auto parts and auto assembly industry—which employs nearly 960,000 workers and is a mainstay of the “export-at-all-costs” neoliberal model—were categorized as “essential” industries. With this decree the alarm bells ceased in the United States. Further, the Mexican government set June 1, 2020 as the date to return to full operation in the auto industry, which ensured that the beginning of the NAFTA-II Agreement (officially the United States-Mexico-Canada Agreement, or the USMCA) was still on track for July 1, 2020. President Donald Trump will undoubtedly use the official launch of the USMCA to maximum effect as he hones his electoral strategy. AMLO supports this new agreement to “help stop the fall of the economy” and promote new foreign investments.
The list of transnational firms that are already in production—or will shortly resume— where Covid-19 has spread is a long one, and includes such companies as: Lear Corporation, Honeywell, Syncreon Borderland, Foxconn, Plantronics, Leoni, Rockwell, Mahle, Electrocomponentes de México, Electrolux, Hubbell, Commscope, Toro Company, Ethicon, Cordis, Syncreon, Flex, Keytronic, Optron, TPI, and APTIV. In April, shutdowns affected approximately 60% of all maquiladora workers in Juarez—a situation that was probably representative for the entire industry—suggesting that as many as 3,000 of the 5,162 maquiladora firms operating in April temporarily closed. The companies that are reopening are doing so without regard for the deaths of hundreds of their plant workers (some registered, some not). These firms have been the most enthusiastic advocates of restarting production as they have sought to drown out the resistance of their workers. On May 10, the maquila association (Index) reported 55% of the maquilas in operation. On May 19, as a great number of plants reopened, maquila workers in Jauréz and Matamoros marched to demand the closure of many plants, including those operated by Foxconn in Santa Teresa (where there were six Covid-19-related deaths, according to the workers), Electrocomponentes de México (10 deaths), Lear (30 deaths), Electrolux (seven deaths), Toro (two deaths), and Regal (13 deaths). The workers asserted that none of these operations—which make a range of products, from snow removal equipment to home appliances —were essential and that none of them had met the sanitation requirements as mandated two months earlier. In Juaréz, 66 maquilas that make neither auto parts nor aviation parts (i.e., those never categorized as “essential”) have remained in operation throughout the health crisis.
All across the borderland, from Tijuana (with an estimated 1,000 maquilas) through Mexicali in Baja California to Nogales, Sonora (with 70% of maquilas in operation on May 18), and on to Juaréz, Chihuahua, and then to Ciudad Acuña, Cohauila (where 23,000 workers returned to their plants on May 20) and to the other end of the border in Matamoros, Tamaulipas (where the hospitals were full of dying workers) these states, and 269 municipal governments, had capitulated to the pressure from the United States to reopen. Meanwhile, the Mexican federal government refused to impose its own hygienic measures.
NAFTA: Myth of Development, Reality of Deindustrialization
The destructive impact of the pandemic on Mexico reveals further the direct consequences of 26 years of neoliberalism under NAFTA, which exacerbated inequality and largely destroyed the nation’s public health system, while imposing a new regime of food precarity as once nationally-produced grains sold at controlled prices are now imported. This shift away from producing staple foods in Mexico has resulted in the displacement of millions of peasant cultivators—many of whom eventually migrated to the United States to work in the dirtiest, hardest, most unstable, and unrewarded jobs available.
What’s more, despite the increased prosperity that NAFTA promised, throughout the NAFTA era average workers’ wages—measured in terms of their purchasing power of basic goods—have generally declined. Over the past nearly three decades, exports have surged (especially in auto and auto parts manufacturing), and Mexico has been forced to de-industrialize as the domestic market has drowned in a sea of cheap imports. As a result, the industrial share of the GDP fell from 36.2% in 1993 (the last year before NAFTA took effect) to only 29.6% in 2017 as manufacturing ceased to be the driving force of the economy. In the period from 2003–2016, national content (with value originating in Mexico) across Mexico’s broad manufacturing export sector averaged only 41%. Using cheap labor to process imported inputs (59% of the value of manufacturing exports does not originate in Mexico) into goods that are largely exported to the United States now defines Mexico’s ever-plodding economy. A large portion of the millions of manufacturing sector jobs that were lost in the United States after 1993 were transferred to Mexico where an enormous army of impoverished wage workers crowded into the maquiladora firms—which, as mentioned, now directly employ 2.6 million throughout Mexico.
As was the case in 1992–1993, when the business and political elites of Mexico opened the road to NAFTA—portraying the agreement as a much-needed lever to promote development—these same forces are now eagerly awaiting the USMCA. This delusionary enthusiasm found its way into an essay written by AMLO and published by the office of the president on May 16, 2020:
To be the neighbor of the most powerful economy in the world under the current circumstances of global recession will help us to drive forward our productive activities and create new jobs. It is a fact that the agreement will attract more foreign investment to our industrial export sector.
But the rage of the maquila workers has further unmasked this myth of economic development, despite the fact that, after some attention received in April, the media has largely ceased coverage of labor strife on the border. On the first of May, International Workers Day, the streets of Ciudad Juárez woke up to graffiti proclaiming “STOP MAKILLAS.” In this manner a diverse collective of workers began a campaign to raise awareness about perilous workplace conditions—announcing that “el virus es la makilla” (the virus is the makilla) and that “la makilla te aniquila” (the maKILLa will annihilate you)—and to demand new protections centered on Salud, Trabajo y Dignidad (Health, Work, and Dignity). Through these protests, they were able to communicate to the nation the completely arbitrary and unaccountable manner in which the transnational firms were operating along the border and throughout the country. The current policy is for these firms to force workers into the plants (lest they literally starve) on the pretext that they are involved in “essential” activities. Firms expect workers to continue doing their jobs without sanitary protections given that distancing in these factories is impossible. Indignant workers have drawn attention to those who have been summarily fired, without justification as required by the labor law, when they resisted being forced into the deadly plants. These workers were then denied their indemnification for losing their jobs. (The labor law requires that employers pay workers fired without cause three months of salary plus 20 days of pay for every year of service, and a number of other smaller payments.)
“STOP MAKILLAS!” was also the cry heard on May 12, when the Mexican government declared that maquila workers in the aerospace and the auto industries were “essential” (essential to the United States) and had to be forced to work, regardless of the utter absence of health and safety protections for workers. The workers responded by demanding they be put on leave at full pay (as well as that all necessary sanitary measures be taken).
But workers’ concerns and their demands are clearly unimportant to the U.S. government and hundreds of U.S. companies operating in Mexico. U.S. Ambassador Landau was blunt in his advocacy of reopening in his widely circulated statement:
We have to protect [people’s] health without destroying the economy. It’s not impossible. … I’m here to look for win-win solutions. On both sides of the border, investment = employment = prosperity.
And so, only four weeks after shutting their doors, the maquilas were open without any clear information as to which, if any, measures had been taken to protect the returning workers. Most workers were forced back onto the shop floor (although some large export firms delayed until June 1). The agencies of the Mexican government (at all levels) and the company-controlled unions had fallen over backwards to ensure that the profits would soon again be flowing, primarily to the United States. In the border state of Chihuahua, for example, 93% of the 122 “essential” workplaces inspected were approved for operation by June 1. However, two weeks later, additional plant inspections resulted in the closure of 44 out of 208 maquiladoras for lack of compliance with sanitation requirements.
Drafted to Serve: Mexican Workers under the Defense Production Act
In March, the nationwide cries for more medical equipment evoked calls from Washington, D.C. to essentially conscript medical supply firms under the Defense Production Act. This Act was implemented in 1950 to force and enable the private sector to prioritize production and delivery of strategic supplies in a time of national emergency. The president then demurred, while stating that such a policy would amount to “nationalizing our businesses,” then suggested that applying the act would be similar to steps taken in Venezuela under President Hugo Chávez (1999–2013).
According to President Trump, running out of crucial medical supplies during an unprecedented pandemic was not a sufficient reason to invoke the production authority of the state—failing market forces all along the medical supply chain could not be tampered with lest the United States slip into Venezuelan-style economic paralysis.
On the other hand, as the pandemic predictably arrived at the nation’s cramped and fetid slaughterhouses, discomforting the Big Four meatpackers (JBS with $39 billion in sales in 2017; Tyson, with $38 billion in sales; Cargill, the largest privately-owned firm in the United States, with $20 billion in sales; and Smithfield, with $15 billion in sales) and disrupting shoppers, these meatpacking behemoths did nothing. At their plants the meatpackers, could not be bothered to protect workers; and the spike of cases among meatpacking employees led to a slow-down in the slaughtering of animals, which led to shortages of meat. The president quickly swung 180°ree; to apply the Act in late April. This mobilized a “critical infrastructure” especially the Big Four’s infrastructure that very comfortably controls approximately 80% of the beef industry. (The top four in pork slaughterers controlled 64% of the market in 2011, while the top four in poultry producers controlled 56% of the market in 2019). Unlike meeting the demand for medical supplies during a pandemic, slaughtering animals was, apparently, too “critical” to be left to the “free” market.
In 2017 the United States exported 13% of the cattle slaughtered, along with 27% of pigs, and 17% of chickens to other countries. While the Defense Production Act’s powers could control foreign markets (exports and/or imports), U.S. slaughterhouses were left free to sell to the highest bidder.
In effect, U.S. slaughterhouse workers and all others involved in the meatpacking supply chain had been drafted to ensure that the flow of profits for the Big Four continued. Implementing the Act meant that workers could no longer receive unemployment benefits. They were now “free to choose” between zero income and near zero job prospects outside the meatpacking plants or work in one of the three most impacted job sectors (the other two being nursing homes, which mass deaths from Covid-19 have turned into veritable death camps, and prisons and jails, where infections have run rampant).
There’s No Business Like Agribusiness
Right behind the arms contracting corporations and aerospace firms that swarm the Pentagon stands the mollycoddled U.S. agribusiness interests. Just as the Pentagon was long ago “captured” by the arms contractors who weave in and out of top positions in the Department of Defense in order to return to the contracting firms through Washington’s “revolving door,” so, too, do the corporate chieftains of agribusiness rotate through the Department of Agriculture and the many other federal and state agencies that work hard to ensure that profits stay high in the agricultural sector.
In this sector government assistance at the local, state, and federal level, has long been readily forthcoming to control the labor force and manage the surges in demand for seasonal tasks. Meatpacking, of course, can be undertaken without too much regard to the seasons. It is therefore rightly considered a manufacturing process that long ago adopted “continuous” production processes—often on a 24-hour basis. Like the seasonal-crop farm labor force, slaughterhouses long ago found that the best labor force is an immigrant labor force, documented or not. And, predictably enough, nearly 50% of this labor force consists of “Hispanics.” Since nearly two-thirds of all Hispanics (according to the U.S. Census) are Mexican-born, we find that the use of the Defense Production Act to keep the slaughterhouses open is part of the larger process now taking place in both Mexico and the United States to force poor Mexicans to risk pandemic death, or long-term decrepitude, in order to make vehicles and auto parts for the U.S. populace and to ensure that its meat-centric diet is maintained. Embodied Mexican labor—workers who were expelled from Mexico during the long night of neoliberalism (1986–2018)—is the key component of the meatpacking supply chain in the United States. Disembodied Mexican labor is the key labor-intensive input of the U.S. auto/auto parts supply chain, as we have explained above.
Werner Sombart’s “Free Lunch”
Famously, in Why Is There No Socialism in the United States?, Werner Sombart claimed (in 1906) that U.S. workers, unlike their counterparts in Europe, were loyal to “the promised land of capitalism” because it provided them with “reefs of roast beef.” Indeed, before Prohibition (1920–1933) a typical saloon in the United States provided an overflowing sideboard “free lunch” for the “thirsty” patrons—roast beef being a mainstay. Sated, workers could then proceed to “bring home the bacon.”
So, what would happen if “reefs” of roast beef disappeared from the food system, along with that defining metric, bacon? We have seen that exhausted health care workers have been made to wait for protective equipment until the “free market” got good and ready to sell them such equipment at whatever prices the market will bear. But could the general populace be made to wait for meat at prohibitive prices? Oh, no.
In a society where well-being has largely been defined by the ability to consume, it has long been taken as a given that meat, or any other food item, would be immediately available in any quantity desired, provided that the buyer had sufficient funds. When that turned out to not be the case, the Defense Production Act was immediately deployed to force an overwhelmingly immigrant labor force to make an ugly decision—go to the front and hope to dodge the pandemic’s bullets or face deportation, hunger, or both. Suddenly, from the long valleys of California to the largely Midwest slaughterhouses, Mexican workers who had risked arrest and deportation to get to the United States were carrying letters or cards showing that they were “essential.” The farmworkers were, as usual, forced to face a daily diet of poisonous pesticides and the risk of infection from the deadly pandemic. But slaughterhouse workers must spend their work shift in tight quarters, in a closed structure among hundreds of workers, usually with circulating air that will bring all possible viral pathogens right to them.
The Pandemic Behind the Pandemic: Neoliberalism
Behind the pandemic of 2020, which has left Latinos with nearly a six times higher infection rate than the average Iowan, lies a deeper pandemic which has spread despair across the United States for four decades. This pandemic—known well outside the United States as neoliberalism—transformed the once heavily unionized labor force in the meatpacking industry into low-wage, disposable drudges. Wages that were 15% above the national manufacturing average in the 1970s had, by the 1990s, fallen 20% below the median. Once subject to industry-wide bargaining agreements, plant unions now bargain weakly: in 2019 only 19% of the 292,000 meat processing workers were union members. In the 1980s and 1990s slaughterhouses were mostly shifted to “right-to-work” rural states to break the legacy of the large-city unions. These states allow workers a “free-ride”—they can have the benefits of a union contract without paying dues—and this feature makes it almost impossible to maintain a union shop. Doubling up, employers began recruiting immigrants, particularly from Mexico. Today, the labor force has a turnover rate ranging from 60–100%, and the meatpackers union has been largely silent as the pandemic has spread.
Just prior to the decision to impose a military-style command system in the slaughterhouses, the Big Four dominating the supply chain (and the many small operations), facing massive pandemic outbreaks, demanded that the federal government impose labor rules that would exempt them from any workplace liability for death or illness arising from the pandemic. Corporations are maneuvering to use the Defense Production Act as a “liability shield” in order to stave off an expected wave of lawsuits alleging workplace negligence—such a wave would raise their liability insurance rates. Under the new arrangement, proven “negligence” may not trigger a court award—workers would have to prove “gross negligence, recklessness, or willful misconduct.” Operating under the Defense Production Act, the meatpacking plants have become the spearhead of big U.S. capital—if they can weaken workers’ rights to a demand a safe workplace, such new legal arrangements will be used by all sectors to weaken labor safety standards and drive down their operating costs.
Meanwhile, across the Midwest, the South, and the Rockies, where most plants are located, right-wing governors are working hand-in-glove with the meat barons, county health departments, and the Occupational Safety and Health Administration (OSHA) to hide any and all information with regard to infection rates and deaths from the pandemic. Only days after Trump invoked the Defense Production Act, data releases on the pandemic’s spread at the slaughterhouses all but ceased. Still, county-wide data showed that in Finney County, Kansas, home to a Tyson slaughterhouse, the infection rate on May 25, 2020 was one in every 26 people. This is nearly eight times the very high national average. The same results, as recorded by the New York Times map “Coronavirus in the United States,” could be found over and over again: Cargill’s plant in Ford County, Kansas produced an infection rate of one in every 21 people and Tyson’s giant plant in Dakota City—operating with 4,300 workers—left nearby Woodbury County, Iowa with an infection rate of one in 39.
In Mexico and the United States, millions of “essential” Mexican workers—essential to the profits of U.S. super-corporations—are pressed to toil on: they must ensure that the U.S. populace face an even larger oversupply of motor vehicles and whatever “reefs of roast beef” remain after the lucrative export market has been supplied.
Did you find this article useful? Please consider supporting our work by donating or subscribing.
