The hidden costs of a 'maquiladora'

Last week ground was broken on the outskirts of Ciudad Juarez in what is set to be Mexico's largest 'maquiladora'. The Taiwanese manufacturing giant Foxconn started construction in Jeronimo, Chihuaha on a facility that will eventually span 500 acres with more than 1.2 million square feet of structures and employ 30,000 people. Foxconn is one of the largest manufacturers of computer components and electronics worldwide.

“This is one of many mutually beneficial projects that I and my economic development people have worked with Chihuahua officials to carry out...," Gov. Bill Richardson said in a press release. "This is the kind of economic development that is going to bring the New Mexico-Mexico border to the forefront of international trade and development.”

Foxconn was most recently in the news in 2006 when it was accused of sweatshop conditions in one of its factories in China. The Mail, a British newspaper, reported that the factory employed over 200,000 workers who lived in crowded dormitories, were not allowed visitors and worked 15 hour days for $50 per month. The company denied the allegations.

Like many areas in China, the border region in and around Ciudad Juarez is a haven for large scale manufacturing where their business activities receive low taxes and tariffs and regulation is often lax. Over 300 Maquiladoras reside in and around Juarez with the overwhelming majority of those belonging to U.S.-based manufacturers including Ford, Motorola, Honeywell, Alcoa, General Motors, Dupont, and Contico.

Juarez has grown from a town of 120,000 in the 1950's to over one million today. With the passage of NAFTA in 1995 nearly 2,000 maquiladoras have been built in Mexico in addition to the 1,700 that were already there. Many of these are concentrated in the border region.

The lax regulation in these "free trade zones" often contribute to substandard working conditions. According to The American Friends Service Committee:

While the maquiladoras mean new jobs for desperate people, they have also brought substandard (and, sometimes, inhuman) working and living conditions. Although Mexico has one of the strongest labor codes in the world, inside the maquiladoras enforcement of labor laws is lax. Workers new to industrial labor may be unaware of their rights and are thus easily abused. Illegal payroll deductions, harsh and arbitrary discipline, sexual harassment, obligatory double shifts, nighttime industrial work for persons under eighteen years of age, and preventing workers from going to clinics when ill or injured on the job are examples of frequent abuses, all of them illegal in Mexico.

While maquiladoras are often touted as beneficial for business development in the region, the policies that enable such efforts often decimate traditional regional economy. Policies like NAFTA which have allowed large scale manufacturers to compete with small farms in Mexico have resulted in many regional farm closures and drawn that labor pool to the border regions. The American Friends Service Committee explains:

...Most maquiladora workers are migrants from Mexico’s rural interior, where declining government support for small-scale agriculture has provoked widespread unemployment, the loss of communal land holdings, and drastic impoverishment. (Such policies, which have been aggressively promoted by the international financial community throughout the 1980s and 1990s, have been actively embraced by the Mexican government since 1988.)

While the impacts of such factories are quite tangible, their promised benefits for the region are often left vague. Take, for example, Gov. Richardson's press release. It said:

“The Ciudad Juarez-El Paso-Southern New Mexico industrial zone is one of the largest and most dynamic border industrial zones in the world,” Economic Development Secretary Fred Mondragon said. “This project will create enormous new opportunities for New Mexico to strengthen our border economy.”

What's often not mentioned when discussing the economics of "free trade zones" is the common sense of the average factory worker. While they toil in brutal working conditions for wages that are illegal even in their country, they could easily flip burgers at McDonald's in El Paso or Las Cruces and double or triple their pay with fewer hours worked. Many do come to that realization and this is contributing to the surge in Mexican immigration here in New Mexico.

Another major consideration when discussing maquiladoras in the border region is the environmental impact. A 2004 Sierra Club report stated that maquiladoras pollution in the area was of grave concern. According to the report:

Toxins created by the maquiladora factories are leaking into the land and water at alarming rates. According to Mexican government figures, the cost of NAFTA-related environmental damage in 1999 alone was an estimated $47 billion. It is likely that the annual pollution damages over the past decade exceeded $36 billion per year. This damage is greater than the economic gains from the growth of trade.

Women currently make up the vast majority of the labor force inside these maquiladoras. Since 1993, hundreds of women and girls have been murdered while traveling to or from these factories.

While it's natural for public officials to tout large economic enterprise that they've been instrumental in implementing, the public would be well served with a discussion of the overall impact of such ventures as well as the policies that allow them to thrive.

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