Post Revolutionary Mexico Essay

This article was downloaded by: [NEIU Ronald Williams Library] On: 14 July 2015, At: 15:05 Publisher: Routledge Informa Ltd Registered in England and Wales Registered Number: 1072954 Registered office: 5 Howick Place, London, SW1P 1WG Labor History Publication details, including instructions for authors and subscription information: http://www.tandfonline.com/loi/clah20 Labor Relations in Mexico: Historical Legacies and Some Recent Trends Norman Caulfield Published online: 23 Jan 2007. To cite this article: Norman Caulfield (2004) Labor Relations in Mexico: Historical Legacies and Some Recent Trends, Labor History, 45:4, 445-467, DOI: 10.1080/0023656042000256234 To link to this article: http://dx.doi.org/10.1080/0023656042000256234 PLEASE SCROLL DOWN FOR ARTICLE Taylor & Francis makes every effort to ensure the accuracy of all the information (the “Content”) contained in the publications on our platform. 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Terms & Conditions of access and use can be found at http://www.tandfonline.com/page/termsand-conditions Labor History Vol. 45, No. 4, November 2004, pp. 445±467 Labor Relations in Mexico: Historical Legacies and Some Recent Trends Downloaded by [NEIU Ronald Williams Library] at 15:06 14 July 2015 Norman Caul®eld As economic liberalization sweeps North America and the globe, increasing pressure is placed on workers and their organizations to accept more ¯exibility in terms and conditions of employment. A major consequence of this trend has been a notable shift in the balance of power between labor and capital. In this new environment, where capital appears to have gained the upper hand, unions have retreated into a defensive mode, which principally has been characterized by concessionary bargaining and a notable decline in strike activity.1 Many scholars identify this general trend as a consequence of globalization, a term used to describe a process of increased and intensi®ed business expansion on a global scale. Rooted in the accelerated economic integration of national and regional economies, globalization implies and entails the freer ¯ow of capital and commodities, business deregulation, and greater labor mobility. Perhaps its most important contemporary feature, however, is that what were once geographically uni®ed production processes, can now be located in different parts of the world.2 The increasing economic integration of North America has accentuated the importance of this particular element of globalization, especially in Mexico, as the nation places low-wage manufacturing comparative advantage at the core of economic development policy. While a strong link exists between this factor and the beginning of the North American Free Trade Agreement (NAFTA) in 1994, the roots of this economic strategy for Mexico can be traced to the 1962 Automotive Integration Decree, the Border Industrialization Program (BIP) begun in 1965, and the nation’s 1986 entrance into the General Agreement on Tariffs and Trade (GATT). All of these events constituted components of a long-term trend toward economic liberalization. At the same time, Mexico’s manufacturing sector grew exponentially, which served to reinforce the nation’s historical reliance on low-wage labor and make it the centerpiece of national economic development policy. Norman Caul®eld is Professor of History on leave from Fort Hays State University in Hays, Kansas. He is currently af®liated with the Secretariat of the Commission for Labor Cooperation in Washington, DC, where he conducts research on employment relations in North America. Correspondence to: Commission for Labor Cooperation, 1211 Connecticut Ave NW Suite 200, Washington, D.C. 20036-2716, USA. Tel.: 202 464 1107; Email: ncaul®eld@naalc.org ISSN 0023±656X (print)/ISSN 1469±9702 (online) ã 2004 Taylor & Francis Ltd DOI: 10.1080/0023656042000256234 Downloaded by [NEIU Ronald Williams Library] at 15:06 14 July 2015 446 N. Caul®eld One result of these developments has been the mounting of strong pressure to change the nation’s labor relations system. Loosely de®ned, labor relations involve the relationships that arise in the course of work between employers and employees, their representative organizations, government and other institutions in society at large.3 Accordingly, labor relations are country speci®c, exhibiting a myriad of complex features that are referred to as a system. In Mexico, the labor relations system emerged within what scholars have identi®ed as a corporatist framework that involved a strong relationship between government, the unions, and employers. In this arrangement unions subordinated their interests and surrendered their autonomy to state development policy, which principally translated into holding down wages, enforcing discipline in the workplace, and delivering votes for the dominant state-connected political party. In exchange, union leaders enriched themselves through government subsidies and business activities that were outgrowths of their association with employers and relationships with state of®cials.4 Particularly in the context of today’s economic environment, it is also important to note that, in the process of constructing and consolidating Mexico’s labor relations system, government of®cials and union leaders received political and ®nancial support at crucial junctures from trade unions and labor federations in the US.5 This labor relations system, which underpinned national economic development for more than 70 years, is today in a state of transformation. At the root of this process is the shift of economic development away from an emphasis on the national to the international market. One result of this trend is that the competitive pressures associated with production for the international market are now much greater, as developing countries across the globe seek to design labor relations systems and offer wages that will attract foreign direct investment and generate employment. No longer negotiating exclusively within the Mexican national market, union bargaining power has weakened, and for the nation’s workers this has translated into persistent downward pressure on wages.6 Meanwhile, Mexican unions have experienced sharp decline in union membership. One recent study indicated that total union membership as a percentage of the economically active population is signi®cantly down from a 1963 high-water mark of over 40 percent of the nonagricultural labor force. In 2000, slightly less than 10 percent claimed union membership compared to almost 14 percent in 1992.7 Union membership experienced its most signi®cant drop in the late 1980s when economic liberalization accelerated. Mergers, acquisitions, privatization, and the outright liquidation of many state-run enterprises with large numbers of unionized members decimated the ranks of organized labor.8 A recent consequence of this protracted decline in union membership is that the established labor movement faces increasing challenges to its domination from independent unions seeking to reverse the slide of organized labor’s power. In some cases, independent unions have developed ties with cross-border allies, which has placed more pressure on the labor relations system as the conditions under which Mexican workers toil receive increasing international scrutiny.9 Within the context of this changing labor environment, employers, government Downloaded by [NEIU Ronald Williams Library] at 15:06 14 July 2015 Labor History 447 leaders and institutions such as the World Bank are calling on Mexico to provide more labor ¯exibility, which is now driving proposed changes to Mexican labor law. Currently before the Mexican Congress, the broader framework of the proposed changes are designed to alter the nation’s labor relations in order to compete with other developing countries, as they also pursue low-wage comparative advantage and labor ¯exibility while attempting to build institutional frameworks for their implementation. At the same time, however, while Mexico has signed off on free-trade agreements to generate employment by offering labor ¯exibility and low wages, it also has entered into legal obligations to ensure compliance with some core international labor standards and enforcement of its own labor laws. For Mexico, like many other nations caught up in the advances of globalization, the creation of any new institutional framework of labor relations begins with the utilization of the customs and practices of existing and long-standing traditions.10 Accordingly, gaining insight into the current transformation of Mexican labor relations requires more than just an examination of recent developments. Tracing the emergence and evolution of labor relations is essential for understanding the dynamic driving the current momentum for more labor ¯exibility. Industrialization, Revolution and Labor Relations Historian James D. Cockroft asserts that the intensive exploitation of labor is perhaps Mexico’s historically most important socioeconomic feature. He adds that the nation’s long-standing reliance on inexpensive labor has contributed greatly to its economic malaise, which historically has been characterized by a heavy burden of external debt, low levels of productivity, and low wages.11 Even when Mexico pursued rapid industrialization and modernization under the rule of Por®rio DõÂaz (1876±1911), Cockroft and other historians write that the process failed to change this historical pattern, and that Mexican modernization in many respects reinforced the nation’s traditional reliance on low wages and labor intensive regimes.12 During the DõÂaz era, foreign-owned enterprises operated in Mexico because workers’ wages were signi®cantly lower than in countries like the US and because they believed that it offered them an environment void of labor militancy, which at the time had been on the rise in the US and other advanced industrial countries. Even in the Mexican North, where wages were relatively higher than in the rest of the country and where many US-owned enterprises had set up shop, workers’ pay was still signi®cantly lower than it was across the border.13 Despite regional variations and unevenness in Mexico’s economic development, at the core of the nation’s development strategy were low wages to draw foreign investment to all parts of the country, especially in industries like manufacturing and mining.14 As this process unfolded, many foreign ®rms established wage systems that discriminated against Mexican nationals. Mexican workers often received lower pay than their American counterparts, who frequently received higher wages for performing the same work. These conditions generated a strident nationalism 448 N. Caul®eld Downloaded by [NEIU Ronald Williams Library] at 15:06 14 July 2015 among Mexican workers and ultimately contributed to the outbreak of widespread labor unrest.15 This was especially true among miners, many of whom had lived and worked in the United States, where they were exposed to radical unionism.16 Because the 1857 Mexican Constitution legally restrained labor organization in the workplace from bargaining with employers, working-class mobilization began in the political arena.17 Accordingly, labor unrest during the Revolution went beyond labor relations in the workplace. When strikes erupted, especially against foreign-owned enterprises, they were highly charged political events. When the DõÂaz government reacted violently to suppress the unrest, opposition to the regime increased, and these events ultimately contributed to the regime’s downfall in 1911.18 The Legal Regime and Labor Relations, 1917±1936 Organized labor’s important role and in¯uence in the 1910 Revolution is re¯ected in Article 123 of the 1917 Mexican Constitution, which grants workers the legal right to organize unions, bargain collectively, and strike. Additionally, through Article 123, workers also secured the eight-hour day, the six-day week, minimum wages, overtime pay, severance pay, pro®t sharing, occupational safety and health, and subsidies for housing and recreation. Although hailed as the most advanced labor code in the world at the time, scholars have suggested that the purpose of drawing up Article 123 was to stabilize labor relations that had been greatly unsettled by the revolution. By providing workers with signi®cant gains, the elite-led government had hoped to end bitter labor± management disputes and establish industrial peace in order that the reconstruction of a nation ravaged by years of revolutionary ®ghting could proceed.19 But implementing these constitutional provisions was another matter entirely, especially since Mexico required a substantial amount of foreign capital to rebuild the country. This contradiction sparked further labor unrest, and it continued into the decade of the 1920s, when radical unions fought government-backed labor organizations. These labor wars prompted changes to Article 123 in 1929, and in 1931 helped to usher in the Federal Labor Law (FLL).20 In effect, the FLL emerged partially as a result of the evolving government support for the brand of unionism advocated by the ConfederacioÂn Regional Obrera Mexicana (CROM), which beginning with its founding in 1918, struggled and competed against radical organizations for worker allegiance. In so doing, the CROM received important backing from the US-based American Federation of Labor (AFL). Through the creation of the Pan-American Federation of Labor (PAFL), the AFL attempted to steer the labor movement in Mexico and the rest of Latin America away from radicalism and toward the business union model, which centered on worker acceptance of the capitalist framework and a struggle limited to gain higher wages and improve working conditions. For the AFL, stabilizing the revolution meant successfully building a Mexican labor relations system that would improve living standards for Mexicans and thereby provide a market for manufactured goods produced by American workers.21 But radical labor groups like the ConfederacioÂn General de Trabajadores (CGT) and the Mexican branch of the Industrial Workers of Downloaded by [NEIU Ronald Williams Library] at 15:06 14 July 2015 Labor History 449 the World (IWW) successfully agitated among workers in mining, petroleum, manufacturing, and urban transport. These organizations attracted worker support primarily because the Mexican state failed to enforce most of the provisions of Article 123, especially as they applied to foreign employers. This gave credibility to radicals who rejected state domination and instead promoted organizational autonomy through agitation around higher wages and better working conditions and ultimately workers’ self-management.22 In the textile industry concentrated in Mexico City and Puebla, CROM and CGT battles were particularly intense.23 Like their American counterparts, many of the French and Spanish owners of Mexico’s mills structured their employment practices that assumed a sharp boundary between managers and workers. This separation was central to industrial engineer Frederick Winslow Taylor’s vision of how production should be organized.24 Because a signi®cant number of the Mexican mill hands entered the factories as displaced artisans accustomed to job autonomy, the textile industry witnessed bitter labor±management struggles over control of the shop ¯oor. During these battles, radical labor groups espoused worker autonomy and selfmanagement through the tactics of direct action and they won support from the mill hands who mistrusted the state-sponsored collective bargaining system advocated by the CROM.25 But since Article 123 stipulated that state governors were responsible for administering the boards that settled labor disputes, the politically connected CROM exercised great in¯uence in the negotiation of all labor±management con¯icts. Although radical groups initiated most strikes, the CROM, with government backing, intervened in these con¯icts and secured many collective agreements.26 Aiding the CROM in this process was the fact that the majority of mill hands were unskilled for whom state-sanctioned unions offered stability and regulation of the workplace by de®ning the terms and conditions of employment through collective agreements. These unskilled hands welcomed CROM implementation of the eight-hour day, the removal of arbitrary promotion systems, and provisions that even allowed workers to choose their own supervisors. These terms and conditions of employment that eventually prevailed throughout the textile industry provided the CROM a strong membership base versus its radical rivals.27 A major event in this development was the 1927 textile industry-wide contract that would eventually provide the underpinnings of the nation’s labor relations system. The 1927 agreement created the exclusion clause, establishing the closed shop, which required workers to belong to the union as a condition to secure employment. Moreover, it gave union of®cials authority to expel members for anti-union activity and, in the process, dismiss them from their jobs. The exclusion clause greatly served the interests of CROM leadership in the battle against their radical rivals.28 As the Great Depression began to affect Mexico, however, major labor unrest erupted once again. Facilitating these new labor wars was that federal and state governments shared labor law enforcement, which effectively allowed many employers to exercise an almost wholesale non-compliance with Article 123. Article 123 permitted employers to claim local conditions which could exempt them from paying Downloaded by [NEIU Ronald Williams Library] at 15:06 14 July 2015 450 N. Caul®eld the minimum wage, improving job conditions for workers, and bargaining with unions. Until the passage of the FLL in 1931, Article 123 also gave jurisdiction over labor legislation to the states, which were to adopt regulating laws within the general outline of the article. In numerous cases this situation aided employers, many of whom wielded powerful political in¯uence with state governors. The situation in some instances provoked widespread rank-and-®le discontent, especially in industries like mining and petroleum, both of which remained outside of CROM control.29 To remedy this jurisdictional con¯ict and inject more stability into the nation’s ¯edgling labor relations system, the FLL created both federal and local Conciliation and Arbitration Boards (CABs) consisting of employer, trade union, and government representatives. The FLL empowered the tripartite CABs with sole authority to regulate union elections and handle all phases of labor dispute resolution. The law also made registration by CABs necessary for trade unions to obtain legal status. Unions hostile to government policy faced delay or the complete withholding of registration. Through the manipulat …