Mexican Labor’s New Deal and the Promise of North American Worker Solidarity
Portside Date:
Author: Jeffery Hermanson
Date of source:
New Labor Forum

Since the passage of the North American Free Trade Agreement (NAFTA) in 1994, the integration of the U.S., Canadian, and Mexican economies has advanced dramatically, creating what economists have called “a regional manufacturing platform,” characterized by cross-border supply chains composed of inter-related manufacturing facilities across the North American continent.1 This integration is the strategy of the U.S., Canadian, and Mexican capitalist class and their political representatives to facilitate growth and profitability, and it has so far negatively impacted the situation and future prospects of U.S. and Canadian workers without benefiting Mexican workers in the slightest. U.S. and Canadian manufacturing sector job losses total in the millions, and in all three countries, real wages have remained stagnant. In some important industries where integration has advanced the most, particularly the U.S. auto industry, 300,000 jobs have been lost and real wages in the United States have declined 20 percent over the past three decades.2

In addition, since NAFTA came into force, U.S. employers have frequently used the threat of plant closure and movement of production operations to Mexico to coerce unions to grant concessions in domestic U.S. factories.3 Furthermore, as recent strikes by U.S. and Canadian unions in the manufacturing sector have demonstrated (e.g. Nabisco/Mondalez4 and Kellogg’s5 in food processing and John Deere6 in agricultural implements), more and more manufactured goods for the U.S. and Canadian markets are now produced in Mexico, beyond the reach of U.S. and Canadian unions as long as organizing and bargaining stops at the border.

However, recent political and institutional changes in the United States, Canada, and Mexico, especially the changes in Mexican labor law encouraged by the process of renegotiating NAFTA and enacting the new U.S.-Mexico-Canada Agreement (USMCA), have opened the way for transformation of the Mexican labor relations regime. Opportunities now exist for workers and unions in all three countries to jointly oppose efforts of employers to use the integration of the three economies to weaken the Mexican, Canadian, and U.S. labor movements. Such an alliance also presents the opportunity to reverse the depression of wages and poor working conditions of workers across the U.S., Canadian, and Mexican borders.

The AFL-CIO and its international organization, the Solidarity Center,7 have been instrumental in bringing about these changes. For more than twenty years, the Solidarity Center has worked with Canadian and Mexican labor activists in trinational organizations and campaigns to promote labor law reform in Mexico, advocating the use of secret ballots in union representation votes and the elimination of the tripartite Conciliation and Arbitration Boards (CABs) that were the instrument of control by government, employers, and protection unions. AFL-CIO leaders and allied organizations like the Economic Policy Institute (EPI) exposed the failures of the NAFTA side agreement on labor rights as well as the undemocratic and corrupt Mexican labor relations regime and its downward impact on wages. With progressive representatives in the U.S. Congress, the federation pushed for changes in U.S. trade policy that were ultimately realized in the renegotiation of NAFTA and the creation of the USMCA.

Mexico’s Labor Relations Regime

Mexico’s labor relations regime has been characterized by “protection contracts,” sweetheart agreements negotiated by “protection unions” often without the knowledge of the workers, and in many cases signed before the first worker is hired. Experts, including Mexico’s Secretary of Labor Luisa Maria Alcalde, estimate that protection contracts comprise as many as 85 percent of the hundreds of thousands of current collective bargaining agreements.8 For the most part, these contracts function as instruments of control of the labor force, simply repeating the minimum terms and conditions established by Mexican labor law. The system of protection contracts and protection unions, the largest of which is the Confederation of Mexican Workers (Confederación de Trabajadores de México, or CTM), has been well-documented and analyzed elsewhere.9 I will only say here that it is a degeneration and corruption of the corporatist union relationship with the former Institutional Revolutionary Party (PRI) one-party state regime that ruled Mexico for seven decades,10 from its founding in 1929 until its historic defeat in 2000.

Mexico’s labor relations regime has been characterized by “protection contracts,” sweetheart agreements negotiated by “protection unions” often without the knowledge of the workers, and in many cases signed before the first worker is hired.

As a result of this system, the wages of Mexican workers have been artificially suppressed, effective union representation has been denied, and unions have been transformed from instruments of worker representation into instruments of social control favoring the interests of employers and investors. When workers attempted to form independent unions to break the monopoly of the protection unions, elections were conducted by voice vote in the presence of the employers and protection union enforcers. Wildcat strikes were dispersed by riot police. Corrupt union leaders stayed in power for decades without holding assemblies or calling for elections. The CABs, institutions that were supposed to resolve disputes, were controlled by representatives of the employers, protection unions, and their PRI allies.

The system of corporatist control established by the PRI over decades was used by neoliberal administrations starting in the 1980s to keep wages low to encourage foreign investment and to establish Mexico’s role in the North American economy as a cheap manufacturing platform for exports to the U.S. and Canadian markets.

To secure Democratic Party support for passage of the USMCA in the U.S. Congress, Mexico ratified the International Labor Organization’s Convention 98, the “Right to Organize and Collective Bargaining Convention.” On May 1, 2019, a labor law reform that radically transformed the legal structure of the former labor relations regime went into effect. The reform requires the use of secret ballots in union representation elections, in the election of union leadership, for strike votes and contract ratification votes, and requires all existing contracts to be “legitimated” by a secret-ballot vote before May 1, 2023. The reform also eliminates the tripartite labor boards that were instruments of government, employer, and protection union control, replacing them with labor tribunals under the judiciary and a non-partisan Federal Center for Conciliation and Labor Registration.

The labor chapter of the USMCA obligates Mexico to enforce these reforms. Perhaps most importantly, the labor chapter provides for a Labor Rapid Response Mechanism, requiring Mexico to investigate complaints of rights violations filed by workers and unions. This provision has been accepted by the U.S. Trade Representative.11 These profound legal and political changes have undermined the monopoly of corrupt protection unions and opened the way for a transformation of Mexico’s labor relations regime. We can see the beginning of this transformation in the events of the past few years.

Breakthrough Victories by Mexico’s Independent Labor Movement

The government of Andres Manuel López Obrador and his Morena party, which took office in December 2018, made a political commitment to improve workers’ compensation. Shortly after López Obrador took office, Mexico’s daily minimum wage was increased 16.2 percent. A border region minimum wage was established and increased by 100 percent in consideration of the higher cost of living faced by workers in the maquiladoras (export factories) on the northern border. In the border city of Matamoros, in the state of Tamaulipas, maquiladora workers were covered by a collective bargaining agreement that required the annual minimum wage percentage increase—which for the past 36 years had been below the rate of inflation—to be applied across the board to all employees. However, the employers and their CTM protection union decided not to implement this clause in the contract, arguing that it was “unreasonable.” Workers in 48 factories—approximately 45,000 workers in all—began a wildcat strike, marching to the CTM office and demanding the union negotiate a substantial increase. Employers appealed to the federal government to intervene to force the strikers back to work; but Deputy Secretary of Labor Alfredo Dominguez Marrufo responded that the government would not intervene and that employers should “sit down and negotiate.” Led by Susana Prieto, a labor lawyer from Ciudad Juarez in the state of Chihuahua, the workers put forward a demand of “20/32”—a 20 percent wage increase and a bonus of 32,000 pesos (US$1,600). After two weeks, all but one of the companies accepted the demand.12 Shortly thereafter, Susana Prieto was arrested by the Tamaulipas state authorities and jailed for over a month, until pressure from the AFL-CIO and the U.S. government—and presumably also from the Mexican federal government—facilitated her release. As a condition of her release, state authorities exiled her from Tamaulipas.13 She was subsequently elected as a federal congressperson from Chihuahua on the Morena party ticket, and she successfully registered a new, independent union, the National Independent Union of Workers of Industry and Services (SNITIS), which began organizing the maquiladora factories.

. . .[P]rofound legal and political changes [enacted in 2019] have undermined the monopoly of corrupt protection unions and opened the way for a transformation of Mexico’s labor relations regime.

In April 2021, the CTM union of PRI federal deputy and former senator, Tereso Medina, one of the most powerful union officials in Mexico, controlling hundreds of contracts in the auto and other industries, attempted to legitimate a contract covering 6,500 workers at the General Motors (GM) assembly plant in Silao, Guanajuato. This is a state-of-the-art assembly plant producing Chevrolet Silverado pickups that sell for $40,000 in the United States, but wages were among the lowest in Mexico’s auto industry at less than $25 per day. When ballot boxes from the first day of voting, stored in the CTM union office overnight, were found to have been broken into and ballots destroyed, the legitimation vote was suspended by the Mexican Department of Labor and Social Welfare (STPS). An unofficial count showed the CTM contract was being rejected by a 55 to 45 percent margin. A complaint was filed by the U.S. Trade Representative under the Rapid Response Mechanism of the USMCA labor chapter. The Mexican government investigated the case, found that a denial of rights had occurred, and ordered a new election. In the interim before the new vote, GM’s tariff privileges were suspended, and GM’s account with the U.S. government was charged 25 percent of the value of each pickup exported to the United States—approximately $10,000 per vehicle, which would come due should the denial of rights not be corrected.

A second legitimation vote was held on August 18, 2021, and again the contract was rejected by a margin of 55 to 45 percent. This vote invalidated the contract and the CTM’s right to represent the workers. It was a historic defeat for the CTM protection union and Tereso Medina, and a historic victory for the workers. The organizing efforts were led by the Labor Research and Advisory Center (CILAS), a Mexican labor rights organization, and by Generando Movimiento (Generating Movement), formed by several workers who had been fired for opposing the CTM contract. They maintained contact through chat groups with a network of active workers who organized their comrades inside the plant. Soon after the rejection of the contract, the workers announced that they had formed and registered a new independent union, the National Independent Union of Workers of the Automotive Industry, SINTTIA. When the Federal Center for Conciliation and Labor Registration officially invalidated the CTM contract, SINTTIA quickly signed up over 30 percent of the GM workers and petitioned the Federal Center for the Certificate of Representation required to begin negotiations for a new contract.

Since the victory of [the new independent union] SINTTIA at GM Silao, there have been a string of important independent union victories in the auto parts and export manufacturing sector.

As soon as SINTTIA filed for representation rights, three other unions—two affiliated with the CTM and one unknown union from Mexico City—intervened, and each filed a petition with signatures of 30 percent of the workforce, although the intervenors had never been seen at the plant. A secret ballot election was held on February 3, 2022, with observers from the Labor Department, the National Electoral Institute, the ILO, and several independent observers from the United States, supported by the Solidarity Center. SINTTIA won in a landslide with 78 percent of the vote. After two months of difficult negotiations, an agreement was reached on a 13.5 percent overall increase, including 8.5 percent in salary and the rest in bonuses and benefit increases. This was the best wage increase in the history of the GM plant and the best in the Mexican auto industry up to that point. The contract was ratified by 85 percent of the workers.

The victory of the independent union SINTTIA inspired wildcat strikes at another GM plant in the neighboring state of San Luis Potosi and at a Mazda plant in nearby Salamanca, both with CTM incumbent unions. Although the strikes were quickly settled, they indicated a latent discontent among workers in the auto industry, and fertile ground for future independent union organizing efforts.

In short, the political situation is good; and while it may not last, it is an opportunity that should not be missed.

Since the victory of SINTTIA at GM Silao, there have been a string of important independent union victories in the auto parts and export manufacturing sector. In the border states of Tamaulipas and Coahuila, independent unions defeated the CTM in landslide votes at auto parts companies Tridonex, VU Manufacturing, Panasonic Automotive, and Teksid, and in Morelos an independent union defeated the CTC, a notorious protection union, at the auto glass plant Saint Gobain, also by a landslide. At 3M Purification in San Luis Potosi, a consumer products manufacturer, an independent union successfully petitioned for the right to represent the workers after their CTM contract was voted down.

An Opportunity for a Tri-National Struggle against Corporate Greed and Domination

The struggles at these auto industry and export manufacturing plants were facilitated by reforms in the Mexican labor law and by the Rapid Response Mechanism of the USMCA. The Rapid Response Mechanism has been supported by U.S. Trade Representative Katherine Tai as well as the U.S. Department of Labor and its Bureau of International Labor Affairs, headed, respectively, by Secretary of Labor Marty Walsh and Deputy Undersecretary Thea Lee. U.S. labor attachés in Mexico have participated in evidence-gathering. Mexican Secretary of Labor, Luisa Maria Alcalde, has been responsive to complaints and has successfully negotiated and implemented effective remedial plans in cases cited earlier (although not without criticism from both CTM and independent unions). In short, the political situation is good, and while it may not last, it is an opportunity that should not be missed.

The Solidarity Center has provided support, including capacity-building workshops for independent union leaders, worker leaders, and organizers. It has provided legal assistance on Rapid Response Mechanism complaints and trained international observers to monitor contract legitimation votes. With a recently approved $10 million grant from the U.S. Department of Labor, the Center’s activities in support of the independent labor movement are likely to increase. Global union federations have shown interest and have—or plan to have—staff in Mexico. Auto workers unions from the United States, Canada, Brazil, Italy, and Germany have sent delegations to Mexico in recent months. Other U.S. and Canadian unions, including the Steelworkers (which has an alliance with the Mexican Mineworkers Union), Communications Workers of America (CWA), United Food and Commercial Workers (UFCW) and UNITE-HERE have expressed interest in cross-border organizing. In some cases, unions have sent delegations of researchers and organizing directors. But much more can and should be done by U.S. and Canadian unions and our allies to take advantage of the opportunity for building a powerful continental labor movement.

A Strategy for the North American Labor Movement

I believe the U.S. and Canadian labor movements and their allies can and should make a serious commitment to build a continental alliance of U.S. and Canadian unions and the many Mexican workers seeking to organize independent and democratic unions. The purpose of such an alliance would be to strategically build power to take on the corporations that are closing plants in the U.S. and Canada, using the threat of plant closures to depress wages and conditions, and using Mexico as a strategic low-wage preserve to increase their profits and their ability to withstand potential strikes in the United States and Canada.

With a recently approved US$10 million grant from the U.S. Department of Labor, the [U.S. Solidarity] Center’s activities in support of the independent labor movement [in Mexico] are likely to increase.

As a consultant to the Mexico Solidarity Center and its organizing director in 2021 and 2022, I oversaw the development of a set of strategic priorities. They entail the following:

First, there is a need to better understand the North American political economy, including the strategy of the U.S., Canadian, and Mexican ruling classes, the chief features of the growing economic integration, and a mapping of the economic relationships between and among U.S., Canadian, and Mexican production, extraction, and distribution networks. A mapping of employment in Mexico, including subcontracted employment, would be valuable. This work could be carried out jointly by U.S., Canadian, and Mexican scholars, for example, by the EPI in the U.S., the Canada Labor Institute for Social and Economic Fairness in Canada, and the Institute for Labor Studies (Instituto de Estudios del Trabajo, or IET) in Mexico. Other possible contributors to this work are the university labor centers in Mexico established by the Solidarity Center, and university labor centers in the United States, including those at UCLA and UC Berkeley.

Second, the U.S. and Canadian labor movements should support the existing independent and democratic unions of Mexico14 in their struggles and celebrate the successes of these unions against multinational corporations. An understanding of Mexican workers’ struggles is essential to educate U.S. and Canadian union members to their common interest in supporting these struggles. Since June 2021, the Mexico Solidarity Center has convened independent and democratic unions and organizations to meet regularly—quarterly if possible—to discuss common issues (the labor law reform, the use of the USMCA Rapid Response Mechanism, the contract legitimation process) and to plan mutual support actions, such as the formation of a Union Organizing Institute in Mexico. U.S. and Canadian union representatives are invited to these meetings, which can be a venue for forging a common outlook and encouraging independent and democratic unions in Mexico to form a national coalition in alliance with their U.S. and Canadian counterparts. Hopefully, this coalition will have the vision and infrastructure to be the foundation of a growing national industrial labor movement.

. . .[T]o achieve the scope and scale necessary to transform the labor relations regime, Mexican workers will have to organize national independent and democratic industrial unions in the principal sectors of the Mexican economy. . .

Third, it is important that U.S. and Canadian unions use their experience to promote an industrial organizing outlook and to counter an enterprise union mentality that limits the vision of many Mexican independent unions to the shop floor within the walls of their own employer. Given their experience with the corrupt and powerful corporatist unions of the CTM and others, it is understandable that many Mexican workers and worker-leaders are deeply skeptical of the possibility of maintaining independence and democratic governance in multi-plant unions and multi-union federations and confederations. But, to achieve the scope and scale necessary to transform the labor relations regime—not only the institutions of government and the laws but also the institutions of the working class—Mexican workers will have to organize national independent and democratic industrial unions in the principal sectors of the Mexican economy, for example, auto, aerospace, export manufacturing, mining, food processing, hospitality, and logistics and transport. These are precisely the sectors of greatest importance, not only to Mexican workers, but also to U.S. and Canadian workers whose employment opportunities and working conditions in these sectors are threatened by the economic integration and wage-depression strategies of the corporate ruling class.

Fourth, this is the moment for the unions of the U.S. and Canadian labor movement to build a working alliance with Mexican workers and their independent and democratic union organizations to fight the corporate greed that characterizes modern capitalism. The conditions are right. Public support for unions in the United States is at an all-time high—71 percent in a recent poll.15 Workers at Amazon, Starbucks, and other national corporations are standing up and joining or forming unions, and in Mexico workers are voting down protection contracts and forming independent unions in key industries. They are doing this with support from Mexican political leaders and the public. The situation in Mexico can only be compared to the United States during the New Deal era, with passage of the National Labor Relations Act in 1935 and the development of the Committee for Industrial Organization (CIO). In these years, there was a massive upsurge of worker organizing, creating the great national industrial unions in basic industries, such as auto and steel. This organizing wave doubled the size of the U.S. labor movement in five years, from three million union members in 1935 to six million in 1940. In contemporary Mexico, this could be the time to replicate the successes of the CIO mass organizing drives and build power for the U.S., Canadian, and Mexican working class. To accomplish this, U.S. and Canadian unions could provide support in the areas of research, organizing, collective bargaining, and political action, and develop, together with Mexican unions and workers, a strategy for a continental labor movement capable of taking on the corporations that—more and more—are operating throughout North America.

In contemporary Mexico, this could be the time to replicate the successes of the CIO mass organizing drives and build power for the U.S., Canadian, and Mexican working class.

U.S. unions should not leave this work only to the AFL-CIO and the Solidarity Center, or—in Canada—to the Canadian Labor Congress. Nor should we rely on the global union federations to carry out this work. As much as these national centers and some international organizations have done to support independent unions in Mexico and other countries, they simply do not have the direct organizing and collective bargaining experience or structural position within key industries to build the kind of movement that is necessary to fight multinational corporations. Industry-specific organizing and bargaining is the domain of individual unions. Who knows the auto industry better than the UAW or the aerospace industry better than the International Association of Machinists? Who better than Workers United can advise Mexican trade unionists organizing apparel subcontractors in Mexico, producing for U.S. brands like Levi’s and Gap? Who has more interest in organizing Amazon and DHL than the Teamsters, Retail, Wholesale and Department Store Union (RWDSU) and the Amazon Labor Union (ALU)?

We have had enough of corporations like General Motors, Nabisco, John Deere, and United Technologies coming to the bargaining table to say they are shutting U.S. and Canadian plants and moving to Mexico. It is time to fight the multinational corporations wherever they operate, so when U.S. and Canadian workers strike, they cannot fill the shelves with products made in Mexico. There is no doubt that an active and practical alliance between U.S. and Canadian unions and Mexican workers seeking to build independent and democratic unions can be a source of tremendous power to improve wages, working conditions, and job security in all three countries.

There has never been a better time to take on this fight, but the opportunity will not last forever. Just as the New Deal came to an end and U.S. unions were attacked by the Taft-Hartley Act, the current pro-labor governments in the U.S. and Mexico are not guaranteed to last beyond the next election. Good laws need good administration and strong enforcement. Without that, they can become a dead letter. Decisions must be made now to build a North American labor movement, capable of organizing and bargaining in the key industries across the continent and fighting back against corporate greed and domination.

Footnotes available here

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