Mexican workers dubious new trade deal will boost their wages

Unions’ cozy history with bosses won’t change overnight.

Bloomberg

On paper, Mexican workers should be big winners from the new North American trade agreement. They’re not holding their breath.

Stronger unions and higher pay south of the U.S. border are a key part of the revamped trade deal, which the U.S. House of Representatives was to vote on Thursday. The measures are supposed to bring knock-on benefits for the U.S. and Canada, too — by eating into a wage gap that’s lured factories and jobs away.

The worry is that any new rules in Mexico will largely remain on paper. Mexican workers themselves, who watched their pay fall even further behind during a quarter-century of the North American Free Trade Agreement, say there’s reason to doubt if its successor will be much different.

“I don’t think there will be any change,” said Ludwing, a security guard at a General Motors plant in the industrial center of Toluca who asked to be identified only by his first name. “I’ve seen my friends fired as plants close down.”

GM Mexico spokeswoman Teresa Cid said the company will honor the changes to Mexico’s labor rules.

The USMCA, as the trade deal is known, requires that 40% to 45% of auto content be made by those earning at least $16 an hour — a move aimed at reducing Mexico’s low-wage advantage in the region. It also guarantees the right of Mexicans to choose their labor unions and contracts.

The problem is that Mexico’s unions have a history of cozying up to bosses, rather than fighting for the workers. Unions are vigorously fighting the new rules on several fronts, including filing hundreds of lawsuits, which is fanning fears that the pace of reforms could stagnate.

Vazquez, a shelf stacker at a Walmart in Mexico City for 16 years and who asked to be identified by his last name, said he’s skeptical the deal will benefit him.

“I don’t think we’ll see any pay raise,” said Vazquez, who earns $300 a month. “It’s been so long and nothing has changed.”

Mexican President Andres Manuel Lopez Obrador has promised to increase funding for labor reforms and he’s boosting the minimum wage. In May, the government enshrined the rights of workers to decide on union leaders and contracts by secret ballot.

While the changes would appear to be a basic function of unions the world over, they rarely occur in Mexico.

At the first such vote over a labor contract negotiated at a factory owned by cement giant Cemex, some workers didn’t know what they were being asked; others said their union made false claims that they would lose their benefits if they rejected the contract.

CESAR RODRIGUEZ / BLOOMBERG Workers lay bricks outside the General Motors assembly plant in Toluca de Lerdo, Mexico. Mexican workers are not counting on USMCA to boost their lot in life.