In May 2019, workers won the right to form labor unions in Mexico. According to the Organization for Economic Co-operation and Development (OECD), seven out of 10 Mexicans live in poverty or vulnerability. Meanwhile, the country’s minimum wage is $5.40 a day. Below are 10 facts about labor unions in Mexico and the promise of their implementation to alleviate Mexican poverty.

10 Facts About Labor Unions in Mexico

Before the start of labor reform, thousands of Mexican workers went on strike for better pay, safer working conditions and union representation. The strikes shut down dozens of factories, resulting in 48 assembly plants agreeing to the workers’ demands. By granting workers the right to form labor unions, they can now engage in collective bargaining. This means that workers in Mexico, organized in a union, can negotiate their own pay, benefits and workplace conditions. Furthermore, they can provide a safeguard against workplace harassment and unlawful business practices. Many Mexican workers are already members of a union. Due to the fact that these unions completely exclude workers from their processes, however, others have dubbed them ghost unions. Employers establish these unions and they largely exist only on paper. Upon hiring, companies make workers join their union, which prevents workers from forming their own union and negotiating terms themselves. In fact, companies in Mexico force nine out of 10 union contracts without the consent, and sometimes knowledge, of their workers. Mexican President López Obrador implemented the new labor laws. He did this along with both branches of the Mexican congress in order to raise living standards, reduce crime and discourage migration to the United States. The left-wing president promises to carry out a “radical transformation” in Mexico, focusing on the needs of the poor and rooting out corruption. Wages in Mexico have fallen far behind the rate of inflation. The average hourly wage for a factory worker in Mexico, traditionally a unionized job, is approximately $2. Collective bargaining gives workers the right to negotiate wages, ensuring that workers have the efficacy to reduce the gap between inflation and pay. Depending on the collective bargaining contract, many unions provide protections against workplace harassment and unjust employee termination. Human Rights Watch (HRW) identifies forced pregnancy tests and mistreatment of migrant workers as areas of particular concern in Mexico. Employee complaints led to no change in business practices, but union contracts give workers the opportunity to push the issue in order to protect the most vulnerable among them. HRW and Mexican workers cite unsafe workplace conditions. These indicate employees need more robust labor protections. President Obrador campaigned on a promise to improve workers’ conditions through union representation. The need for better conditions is clear; HRW described some workplaces in Mexico as “life-threatening.” According to the OECD, 71 percent of the value created by corporations in Mexico goes to shareholders. On the other hand, workers receive only 28 percent. Employees in the United States, on the other hand, have a 69 percent share, and shareholders receive 21 percent of the value created. The disproportionate share exists as evidence of a lack of workers’ representation and labor unions in Mexico can help reverse the trend. The North American Free Trade Agreement included provisions in order to protect workers’ rights. According to HRW, people often ignored those provisions, especially in Mexico. The recent labor reform comes on the heels of a renegotiated trade deal, the United States-Mexico-Canada Agreement. The USMCA seeks to, among other things, reduce the gap between workers’ protections in all three signatories. While labor unions will not completely alleviate Mexican poverty, the country can expect to make some gains. As the share of the value created by corporations becomes more evenly distributed among workers, the Mexican economy will benefit as a whole. Put simply, a larger share of the money will remain in Mexico due to union representation.

Stronger worker protections in Mexico promise to strengthen its middle-class and help the poor. By reducing the degree of poverty, Mexico can also expect to enjoy greater stability. Labor unions in Mexico present an opportunity for economic expansion, foreign investment and an entirely new market for consumer goods.

– Kyle Linder

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