In realms of NAFTA and political reform, future is great unknown for Mexico Low-wage workers skeptical of pact

president sees it as election security

November 21, 1993|By Ginger Thompson | Ginger Thompson,Mexico City Bureau

MEXICO CITY -- Wages were so low at the clothing factory where 34-year-old Maria Leticia worked that she quit, and last week she started her own business: selling tamales and tacos from a rusted shopping cart on a street corner.

If she sells 12 tamales per day -- at a cost of 70 cents each -- she will make more than her weekly factory salary.

"Imagine that," she says. "I have four children to raise. I couldn't stay at the factory."

Her customers understand her plight well. They work at a garment factory one block away from the corner where Maria Leticia sells her tamales -- cornmeal and spicy chicken wrapped in moist banana leaves.

"We get paid almost nothing," said one woman who would only identify herself as Rosa. "They pay us starvation wages."

"There is no one to help us," said another worker, named Cristina. "The union leader is paid by the company to keep us quiet."

Saving the status quo?

Even though the U.S. Congress has ratified the North American Free Trade Agreement, these women are still reluctant to believe Mexican President Carlos Salinas de Gortari's promises that it will create more jobs and raise wages in Mexico. They and others around the country say that NAFTA will not better their working conditions, will not raise their standard of living and will not usher in true democracy.

Instead, some say, NAFTA will be the license Mr. Salinas needs to keep things just the way they are now and have been for decades -- politically as well as economically.

"American companies are coming to Mexico because wages are low," says Rosa. "They will not come if the government forces them to pay higher wages, and so we, the workers, will have to suffer so that the companies will keep coming."

"The proponents of NAFTA in the United States expressed concern for continuity," says Adolfo Aguilar Zinser, a political commentator who writes columns in two major Mexican daily newspapers. "They want to keep in place the economic reforms and the system that benefits the pro-American elite. NAFTA is an endorsement of the current system. It is not about change."

In a speech after the U.S. House of Representatives voted to approve NAFTA, President Salinas reiterated his promises for a brighter future, but he cautioned against expecting immediate improvements.

"I repeat that we should not expect immediate effects from the treaty," he said, with a face that looked more sullen than excited. "It was negotiated in a way so that its application will be gradual, over 15 years, giving the sectors that need it appropriate time to modernize their competitive capabilities and move forward."

Small businesses hurting

The majority of Mexico's 85 million people cannot wait long. Since 1987, when Mexico began opening its economy to foreign investment and competition, hundreds of small businesspeople have gone bankrupt. Unemployment has soared.

Statistics offered by the Mexican government show that unemployment is higher now than at any other time in Mr. Salinas' presidency. Some 23 percent of Mexico's 85 million people are unemployed or underemployed, meaning they work less than 35 hours per week.

"Small businesses provide a lot of jobs to this country," says Salvador Garcia Linan, head of the Mexican Small Business Institute. "But the government has left them to fend for themselves. Some may survive, but most will die."

Ruben Barrios Graff, an auto parts maker, said that in 1987, U.S. auto parts consumed $3 billion of the Mexican market. Last year, U.S. auto parts took $6.5 billion of the market -- some 85 percent of the total sold in Mexico last year.

His own company's sales have dropped 40 percent over the last three years because U.S. manufacturers can produce brakes at a cheaper price. U.S. companies use more machinery than workers, while Mexican firms have no money to modernize. U.S. businesses pay lower utility bills, and they have greater access to financing. Mexican interest rates are above 30 percent for small business loans, compared with rates of between 9 percent and 12 percent in the U.S.

Some find good jobs

Mr. Barrios has laid off 50 workers in the past year.

"This is only going to cause more people to migrate to the United States," he says, sitting in an office adjacent to an empty warehouse. "That means even more danger to U.S. jobs."

Juan Antonio Portugal would disagree. For him, free trade between the United States and Mexico has meant a good job, access to high-quality goods and a festive work environment.

He sets up product displays in the Wal-mart super store that opened just over a month ago on the south side of town. The sprawling center -- with towering shelves filled with everything from frozen foods to motor oil to comforters to Christmas decorations -- is always bustling with customers.

"The pay is very good," Mr. Portugal says, beaming. "I make [$300] a month. Almost [$330] with overtime."

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