Mexico's border industries boom, while rest of nation remains in economic slump
Tijuana, Mexico — As scores of young women pour into an electronics assembly plant here for an early morning shift, a dark van pulls up to the curb. Most of the blue-aproned laborers quicken their step past the vehicle. But a few others hesitate, talk with the driver, then hop in before the van speeds away.
In Mexico, where nearly half of the work force lacks jobs that pay even the $3.10 daily minimum wage, the man in the van is a rare breed. He is a labor pirate, luring scarce workers with promises of slightly higher wages and extra benefits.
His very presence - striking amid the major layoffs and plant closings that have swept Mexico in the past five years - is testimony to the border's booming maquiladora industry.
Maquila is the Spanish term for what millers in colonial Mexico charged for processing grain. Today, it refers to firms that assemble components imported duty-free from abroad and then reexport the products, paying duties only on the value added in Mexico.
``We are the only city in Mexico with a demand for workers,'' Octavio Corona Flores, president of the Tijuana Chamber of Commerce.
But less ebullient observers say the border boom has few ties to the broader Mexican economy and that it has failed to alleviate Mexico's unemployment problem. After last Thursday's fatal smuggling attempt in Texas, in which 18 male immigrants suffocated in a locked boxed car, that is all too clear.
Most experts estimate that between 40 and 50 percent of Mexico's labor force earns less than the minimum wage. At the same time, the economy, which shrunk 3.7 percent last year, must create more than a million jobs a year just to keep pace with new entrants to the labor market.
In the border assembly plants, however, more than 70 percent of the workers are young females.
``Almost no jobs are created for males or anyone over 30 years of age, where the true unemployment problems of Mexico exist,'' says one United States critic.
Even as Tijuana bursts at its seams with nearly 1.5 million inhabitants and an estimated 50,000 internal migrants a year, employers are still scouting for workers. Full-page want ads in newspapers, 30-second radio spots, help-wanted signs outside of factories, and the lurking presence of labor pirates - all these attest to Tijuana's rock bottom 1 percent unemployment rate - and the flourshing maquila industry.
Though the border's privileged tariff status was established back in 1965, foreign companies have flocked mainly to the border in the past five years, as the sinking peso has made Mexican labor among the cheapest in the world.
Last year, as industrial production fell 5 percent nationwide, maquila production - 90 percent of it hugging the US border - leaped 18 percent, according to Bernardo Gonz'alez Arechiga, economic director of the College of the Northern Border in Tijuana. For the second year in a row, Mr. Gonz'alez says, the industry's foreign-exchange earnings ($1.6 billion) topped tourism and trailed only the country's huge oil industry.
With the rapid influx of foreign capital, border towns like Tijuana - once known as honky-tonk havens for quick divorces and illicit entertainment - have mushroomed into international industrial centers. Factories for everything from clothes to computer keyboards now crowd outlying areas where cattle and cotton once ruled.
But despite the praise for the maquila program, many experts feel that the industry is dangerously dependent on the the US.
``If the US economy starts having serious economic problems, maquilas could disappear,'' warns Guy Erb, a business consultant for US companies doing business in Mexico.
Even more distressing to some is the flip side of the dependancy coin, the almost complete isolation of the maquila industry from the broader Mexican economy. Although it has galvanized the local construction industry in border areas, less than 3 percent of the components used by the industry are supplied by Mexican companies.
``Nobody thinks maquilas are going to solve all of Mexico's economic problems,'' says Norris Clement, a professor at San Diego State University's Institute for Regional Studies.
But Professor Clement hopes Mexico follows the example of Taiwan, which has gone beyond selling cheap labor to supplying component parts. ``If Mexico could link the maquila industry to the general economy, they would be onto something. But right now the links are infinitesimal.''
``The maquila industry is a good answer to the short-term situation created by the foreign debt,'' Gonz'ales says, noting a significant foreign exchange earnings. ``But it doesn't address the needs of a country trying to develop.''
With continuing pressure to pay the interest on its staggering $110 billion debt, however, Mexico faces few options.
``We're not in a postion to negotiate the kind of development we have,'' Gonz'alez says.
``We have to take the alternatives that are open to us - and right now the maquilas are it.''