Upon my visit to Mexico, I was most moved by the stark contrast between the state-of the-art maquiladoras and the impoverished colonias where the workers of these factories lived. U.S.-based companies operating maquiladora factories in Mexico include many of the Fortune 500, such as, Alcoa, Masterlock, Delphi, RR Donnelley, General Motors, Ford, General Electric, Johnson Controls and Johnson & Johnson. Here In the United States, maquiladoras would most likely be referred to as sweatshops. There are over a million maquiladora workers in Mexico, many of who are young women from 14 to 20 years old. They work six days a week in grueling 9-hour shifts with few breaks in working conditions that are often hazardous, and where industrial accidents and toxic exposures are common. In exchange, these workers are compensated with a measly $0.80 to $1.50 an hour. If you were to compare productivity levels, unit labor costs and wages, it would be conclusive to find that Mexican workers are among the most productive and yet worst paid people on the planet.

Furthermore, maquiladoras contribute little, if anything, to Mexico's development. Under the Mexican government’s Maquiladora Program, the maquiladoras are exempted from paying taxes to their host country. Components for maquiladora products are primarily imported elsewhere due to the duty free provisions of the Maquiladora Program. This does nothing to stimulate the local economy. This lack of support for the local area around maquiladoras makes it possible for a worker who spends the day in a state-of-the-art production line to return home to a makeshift shack with dirt floors and no utilities.
Increasingly, maquiladora workers are finding it hard to meet a family's basic needs. The wages paid to maquiladora workers for a full workweek do not enable them to meet basic human needs of their family for nutrition, housing, clothing, fuel, and non-consumables. It would seem necessary for a family to have multiple wage earners in order to just meet their basic needs. This may explain the reason why women and young people make up a significant part of the maquiladora workforce. Aside from struggling to provide basic needs, Mexican workers cannot afford to consume the items they produce.

One commonly stated rationale U.S.-based companies claim is that workers are paid less in Mexico because their standard of living is lower and products and services are cheaper. Based upon the market basket survey exercise we did on the trip, I find this is not the case. For instance, a gallon of milk in Nogales costs N$30.90. Using the daily minimum wage of N$45 for a nine-hour workday, the "time cost" for a gallon of milk would be little over six hours. In other words, a Mexican worker would have to work six hours to earn enough to by a gallon of milk. If I were to convert this figure to a U.S. worker who earns a minimum wage of $5.15/hour, the equivalent U.S. cost would be about $32! Other examples of equivalent U.S. costs include diapers- $54, 1 kg detergent - $12.90, 1 kg cheese- $30.40, and 1 kg tomatoes - $12. One look at this data, and it is hard to deny that the cost of living for the maquiladora worker is indeed high.

Another cry from the U.S. companies is that they are paying above the Mexican minimum wage. This may be true, but I argue that they are nowhere near paying a sustainable living wage. A sustainable living wage is a wage that meets the basic needs of a family, enables the family to participate in cultural activities, and allows them to set aside small savings for the future. From what I saw on my visit to a typical family household in Mexico, they are barely making a living.

Ironically, these injustices to the Mexican worker are in direct violation of the Mexican workers' human rights and the Mexican Constitution that guarantees a living wage. It states in Article 123 of the Mexican Constitution that general minimum wages must be sufficient to meet the normal material, cultural and social needs to provide for the family and to provide for the obligatory education of the children. Instead, it seems that the bottom line of company profits are favored over the dignity and human rights of the workers that keep those companies alive. I wonder how close the Mexican worker is at his or her breaking point. I would think that any further drop in living standards would have severe social and political consequences.

So what is the solution to this problem? One obvious reply is to persuade U.S.-based corporations that benefit from free trade to recognize their moral obligation and pay their workers a sustainable living wage. But I think that American companies operate under the I’ll-do something-only-if-the-other-guy-does-it routine. American business is based entirely on competition. They fear that they will fall behind the competition if they add to their overhead even for the benefit of their own workers. So I propose that the new Mexican leadership roll up their sleeves and enforce their constitution and protect their people. The way I see it, the Mexican people have nothing more to lose by doing this.

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