Oct 20, 2006
More than 12 million people have left Mexico, and the vast majority are now living in the U.S. They made enormous sacrifices to leave. They ripped themselves away from their homes, families, neighborhoods. Since most do not have legal papers to enter the U.S., they are crossing the border surreptitiously, which can cost them several thousand dollars for a guide, a “coyote.” And they are also taking a risk. Official estimates are that more than 400 people die every year trying to cross the border, with the real numbers certainly much higher. If they take this risk, it is not because a wonderful situation awaits them. When they arrive in the U.S., the sacrifices do not end. Most face very difficult conditions, often working the lowest paying jobs and living in deplorable slums. And neither do the risks end, since all those who are undocumented are forced to live in the shadows.
No, they are doing all this because less and less can they find a way to survive in Mexico.
Yet, Mexico is not a poor country. Its 700 billion dollar economy is the 12th largest in the world, as measured in Gross Domestic Product (GDP). It is also the largest economy in Latin America, having passed Brazil, which has about 70 million more people than Mexico. Mexico has the highest per capita GDP in Latin America.
Mexico is rich in natural resources. It is the fifth largest oil producer in the world, and it is one of the biggest producers of natural gas in the Western Hemisphere. Mexico is rich in a variety of minerals, and is the largest producer of silver in the world. And Mexico also has a very productive agricultural sector.
Besides that, Mexico is a major manufacturer. Its heavy industries include auto, steel, rubber, machinery, petrochemicals and plastics. Its light manufacturing produces plenty of consumer goods, electronics and clothing.
But while the Mexican economy produces great wealth, the working masses responsible for it do not benefit. Even the Mexican government’s own statistics show that Mexico has some of the worst economic inequality in the world.
On the one hand, Mexico has the fourth largest number of billionaires, after the U.S., Germany and Japan. According to Forbes magazine, the third richest man in the world, after Bill Gates and Warren Buffet, is Mexico’s Carlos Slim Helu, whose business empire includes Telmex, the telephone monopoly.
On the other hand, 50 million people, or close to half of Mexico’s 106 million people, live below the official poverty line. And the government classifies one person out of every four as living in extreme poverty, unable to afford adequate food. In other words, about 24 million people in Mexico are going hungry.
Behind the impoverishment is not a lack of wealth, but the social structure.
That social structure comes out of Mexico’s underdevelopment and domination by imperialism, particularly U.S. imperialism. Over the last quarter-century, that domination has increased substantially.
The measures taken by the Mexican government after the Mexican Revolution of 1910-1920 and then the great strikes of the 1930s had fostered a small bit of independence from imperialism. Many of the key sectors of the Mexican economy, the oil industry, railroads and mines, were ripped from the hands of U.S. and British companies and put under state control. The Mexican government also imposed some trade and investment barriers to protect Mexican industry and agriculture.
Of course, these measures only limited U.S. domination for a period of time. The more the Mexican economy developed, the more it became integrated into the world market dominated by imperialism. Over time, there was more investment and trade from the U.S., which gradually drained more and more wealth from Mexico. So while there was a certain development of the Mexican economy throughout the 1940s, ’50s and ’60s, Mexico did not escape from its underdevelopment.
Then in the 1970s and ’80s, U.S. domination increased markedly.
This began with the big international economic crisis of 1972-73. The U.S. went into one deep recession, and then a few years later, an even deeper one. At first it seemed that Mexico might escape the worst consequences of these crises. In 1972, enormous oil deposits had been discovered off the coast of Mexico. And in 1973, due to the so-called energy crisis, the price of crude oil quadrupled, and then in 1979 doubled again.
To pay for the development of those fields, the Mexican government turned to the big international banks, especially the big U.S. banks, for credit. The banks were more than happy to oblige. In fact, with their coffers bulging with surplus capital, the international banks had already been foisting huge loans on many underdeveloped countries. Much of the loan money to Mexico went to pay the big U.S. oil service and construction companies contracted by the Mexican government to do the work. The Mexican government took out other big loans to pay for the infrastructure to encourage the development of export industries. The assumption was that with the oil boom, Mexico would have no trouble paying back the banks.
The flood of loan money paying for the importation of consumer and capital goods, especially from the U.S., kept the Mexican economy afloat. But by the early 1980s, oil accounted for 75% of all Mexican exports, making the Mexican economy heavily dependent on the export of one commodity, just like so many other underdeveloped countries.
The Mexican economy soon faced a double squeeze. In 1979, the banks in the industrialized countries began to raise their interest rates up to a peak of 20%. This, in turn, raised Mexico’s interest payments. Then, in 1981, with the continuing plunge in the world economy, oil prices dropped, reducing Mexico’s income and its ability to make these usurious payments.
In August 1982, the Mexican government defaulted on its debt to the international financial system. This default triggered a currency crisis, which triggered a financial crisis, and then a deep depression. Crisis or not, the Mexican bourgeoisie did very well. Between 1982 and 1988, the profits of the top 72 companies in Mexico grew handsomely.
Meanwhile, the loans were renegotiated – under U.S. terms. The entire Mexican economy was geared to paying back those loans. Of course, someone had to pay for this, and it was the Mexican working population. To make some interest payments, the Mexican government multiplied harsh austerity measures to squeeze money out of the population. It raised prices for government goods and services. It cut back subsidies on basic foods like tortillas and bread, thus boosting their prices. And while prices for everything jumped through the roof, the government implemented wage controls, beginning with a freeze of the minimum wage.
The impact on the population was devastating. In just two years, the standard of living of the workers and peasants had been slashed in half.
The growing U.S. imperialist domination of the Mexican economy had produced the desperate conditions that pushed the first huge wave of millions of Mexicans to flee the country.
The enormous sacrifices being imposed on the Mexican population were not sufficient for the Mexican government to make even the interest payments on its debt to the big international banks. The U.S. used this shortfall to demand that the government open the economy up to greater U.S. investment, ownership and trade. Nationalized industries, such as the telephone company, banks, radio and television stations were sold off for next to nothing to U.S., Mexican and other big multinationals. The new privatized companies then followed up with massive downsizings, throwing millions of workers out onto the street.
The Mexican government then handed over enormous subsidies to U.S. companies looking to invest in manufacturing, especially in the maquiladoras on the border with the U.S., by paying for the land, putting in infrastructure, and granting enormous tax breaks, under the guise that this would supposedly create new jobs for Mexicans. New maquiladoras sprouted like mushrooms all along the border.
The Mexican government also “restructured” agriculture, supposedly to encourage investment and production. Agricultural production was increasingly geared to export by big multinational companies, such as Campbell Soup, General Mills, Ralston Purina, PepsiCo, CPC International, Kraft Foods, Coca-Cola and Pilgrim’s Pride. The “ejidos,” or peasant communal lands that had formerly been protected under the Mexican Constitution, were allowed to be sold, even to foreign companies.
This accelerated the impoverishment of the peasantry, and pushed millions of them off of the land. So, they joined either the millions of laid off workers in the overcrowded cities, or the river of humanity flowing out of the country.
This economic restructuring culminated with the passage of NAFTA in 1994, which more than anything confirmed and formalized the measures that had been either taken already, or were in the pipeline anyway.
NAFTA, of course, was sold as the way to finally provide good paying jobs in Mexico, and thus reduce the need for people to emigrate. Supposedly by joining Mexico’s economy tighter to that of the U.S., the largest in the world, Mexico’s economy would be pulled up, and Mexico would go from being a Third World country to the First World. Mexico would become part of that small club of the economic elite.
The reality of course was quite different. U.S. capital did come to dominate the Mexican economy as never before. Industrial and agricultural production for export, especially for the U.S. market, to a great extent replaced the old domestic production base. And enormous profits were made, first of all, by the big multinational companies and second of all by a small group of Mexican capitalists.
But this did not spell more rapid economic growth. On the contrary, GDP growth remained relatively weak.
Neither did it bring greater economic stability. On the contrary, the Mexican economy continued to be wracked by crisis. In late 1994, speculators caused a financial panic by pulling tens of billions of dollars from the Mexican financial system. This ignited a new financial crisis, which then ushered in a depression that was even more devastating than the one in 1982.
Finally, in 2000-2001, the U.S. economic recession, which was led by a drop in U.S. production, pulled the Mexican economy down with it. With 90% of all Mexican exports going to the U.S., the Mexican economy had become synchronized with the U.S. economy. And its greatly increased dependence on the U.S. market meant that the downturn in Mexico was both steeper and lasted longer than that in the United States.
No, NAFTA and greater economic integration with and domination by the U.S. did not bring more and better jobs. It brought only domination by the U.S., and reinforced the impoverishment.
Living conditions for the mass of the laboring and poor classes have gone from bad to worse. The layoffs from plant closings and government budget cuts run into the millions, and unemployment and underemployment mount incessantly, swelling the informal sector. At the same time, peasants are continually being driven off the land, by hunger and poverty, with peasants packing up and leaving at the rate of 400 to 600 people per day, year in and year out.
A big part of the workforce has been left with no regular work, no steady job. In order to survive they have been reduced to doing odd jobs, peddling, begging or crime. This has produced an enormous informal sector, or underground economy. According to the 1970 census, 747,000 Mexicans or five percent of the workforce, were in the informal economy. By 1990 this had increased to eight million people, 30% of the work force, again according to the Mexican census. The latest figures show the informal sector up to 40% of the workforce.
As a result, fewer than 14 million Mexicans, out of a population of 106 million, are counted as having regular employment, which entitles them to health care benefits and a pension. Furthermore, companies are taking advantage of the crises and the lack of decent jobs by imposing practically starvation wages.
Wages have been going down incessantly. According to the International Labor Organization, between 1991 and 2004 the real wages of manufacturing workers had lost almost half their buying power. As for the minimum wage, it currently stands at $4.25 per day. Its buying power is only 25% of what it was 30 years ago.
Of course, this is not to say that the big multinationals created no jobs. On the contrary, they created plenty, starting with an entire export-oriented industrial base, along the border with the U.S. – the maquiladoras. Maquiladoras are foreign-owned plants, the biggest of which are owned by big U.S. multinationals. They import components duty-free, assemble them into goods, and then export them. Together, they employ more than a million workers. The U.S. company with the largest presence there is Delphi, which owns 54 plants employing 68,000 people.
Of course, the big issue is the kind of jobs these companies create. Mainly, they hire young women from the interior, many in their first jobs, and pay them on average the equivalent of $45 a week, which comes to about twice the minimum wage. However, if the pay is a little higher, it does not make up for the very high cost of housing, utilities and food in the border cities. On top of that, the slums where the workers live, are very polluted, unsanitary and often dangerous. In the city of Juarez, for example, hundreds of women have been raped and murdered, a grisly crime wave that has gone on for years and continues to this day. And on top of that, working conditions in the plants are both unsafe and unhealthy.
Despite the desperate need for a job, most of the workers in the maquiladoras quit within a year. Even the companies themselves admit that the turnover rate in the maquiladoras runs at over 100% per year.
To sum up: what the U.S. and the other big companies called the “modernizing” and “restructuring” of the Mexican economy consists of imposing working and living conditions that date back centuries.
The very same U.S. corporate and governmental officials who decry the migration, are the very ones who imposed U.S. domination on Mexico, and imposed the conditions that push people to flee the country. And it should be added that, once the Mexicans get to the U.S., these same officials declare the immigrants to be “illegal” – and then use that status as an excuse to deprive them of most of their legal and social rights, in order to exploit them with low-wage jobs.
Of course, Mexicans have been migrating to the U.S. in search of work for a very long time. But in the past, most did not settle in the U.S. permanently or seek citizenship. Instead, they simply worked long enough in the U.S. to solve a money problem and then returned to Mexico. Many did this several times in their work lives.
As we have seen before, starting in the early 1980s, the numbers leaving Mexico exploded. Not only that, but a much bigger proportion of them left for good.
The numbers tell the story. Up until the 1980s, a total of about two million Mexicans had emigrated to the United States. Twenty-five years later, that number had jumped to 12 million. The fact that the proportion of the undocumented immigrants increased steadily from 10% in the early 1980s, up to over 90% of all Mexican immigrants from the late 1990s through 2004, indicates the sheer desperateness of the situation.
Certainly, part of the reason that a much bigger proportion of Mexican immigrants are staying in the U.S. can be explained by U.S. policy. By greatly increasing the police presence along the border, it made border crossing much more difficult and expensive. To a great degree, this cuts off the circulation of labor along the border.
But what has also made returning to Mexico out of the question is the impoverishment and misery in Mexico itself.
They are leaving from the Mexican heartland of Guanajuato, Zacatecas, Jalisco and Michoacan, which have been sending people to the U.S. for over a century. But now people are also coming from the poorest regions in the south of the country, Pueblo, Guerrero, Vera Cruz, Oaxaca and even Chiapas.
In some of the areas where emigration is highest, the impact has been palpable. In the entire state of Zacatecas, more than half the population is now living in the U.S. In some regions, emptied of people, little is left but ghost towns. There are also vast tracts of farmland that are abandoned, or that are not able to be worked because there is no workforce.
The fact is that the part of the Mexican population that is leaving the country comes from the very core of the Mexican labor force. A recent study by the Pew Hispanic Center found that those leaving Mexico were not the unemployed. They had jobs in construction, manufacturing, and the retail sectors, with a smaller proportion coming from the old traditional agricultural workforce. And they are increasingly younger, more skilled, and on average have a higher level of education than most Mexicans, although their educational level is not as high on average as that of workers in the United States.
In a relatively short time, about 10% of the Mexican population of 106 million had picked up and moved to the U.S. According to one study, Mexico would have had a population of 128 million, counting their offspring, if the immigrants had stayed in Mexico.
This loss is amplified because those leaving make up the most productive part of the Mexican workforce, the part that is younger, more skilled and more educated. Those who represent a big part of Mexico’s future are leaving the country. This constitutes a huge loss for the Mexican economy and society.
Despite what it was costing Mexican society, the Mexican government did nothing to stop or even slow down the emigration. Of course, the only answer would have been to provide decent paying jobs, which it didn’t have the means to do – even if it wanted to, which it didn’t. Of course, the U.S. bourgeoisie has made clear that it has been counting on the supply of plentiful and vulnerable labor from Mexico as an important source of profit for many U.S. economic sectors. If the Mexican government had made any serious attempt at opposing the migration, encouraging and appealing to the people to remain to help build up Mexico, the U.S. would have taken this as a sign of defiance and found a way to retaliate.
Instead, the Mexican government simply tried to keep ties with the millions of those who left. It instituted dual nationality – technically, a “no loss of Mexican nationality” rule for those who acquired U.S. citizenship. It also passed a constitutional amendment that gave Mexicans abroad the right to vote in national elections. The 2006 election was the first time people had a chance to take advantage of it, and few did, since one had to return to one’s old community in order to vote.
Vicente Fox, who took office as president in December 2000, hailed those who migrated to the U.S. as “heroes.” He then proceeded to pose as the defender of undocumented Mexican immigrants in the U.S. by playing at being U.S. President Bush’s front man to rally support for “NAFTA-Plus,” a new immigration “reform,” which was little more than a glorified guest worker program. This first effort at “immigration reform” was torpedoed by the Bush administration’s witch hunt against immigrants following the 9/11 terrorist attacks. But when the Bush administration once again put what amounted to a new guest worker program on the front burner in 2005 and 2006, Fox once again played the shill for Bush.
Fox had other reasons to play along with the Bush administration: the Mexican bourgeoisie and government looked to profit, both directly and indirectly, from the Mexicans living outside the country.
First of all, there was the question of the billions of dollars that Mexicans living abroad were sending back to Mexico, sums that increased, as the number of Mexicans living abroad increased. By the year 2002, for example, these remittances equaled close to $16 billion. This constituted more money than came in through either tourism or industrial exports, and it began to even rival the size of oil exports. (Of course, in no way did these remittances make up either for what Mexico lost, bled of a big part of its working class, nor for what the U.S. bourgeoisie drained from the Mexican economy every year.)
For the Mexican bourgeoisie, these remittances served as an indirect subsidy. It allowed the bourgeoisie to cut workers’ wages more, with the expectation that for many families, the blow would be softened by money sent from the United States.
The government also found ways to tap Mexicans living abroad for money. It created the 3-to-1 Community Program, a matching fund from the municipal, state and federal governments that would triple whatever donations emigrants would make for a project in Mexico. Those giving the money even got to choose whatever project they wanted, whether it would be an infrastructure project, like potable water, educational scholarships, or the restoration of churches Some of the 3-to-1 projects went into improving villages that are losing residents – or practically empty.
This government program was marketed through the Mexican Hometown Associations (HTAs) in the U.S., which bring together U.S. residents from particular Mexican villages and states. The 600 HTAs from 26 Mexican states have created the Council of Federations of North America, which reported that HTAs in 2004 completed 1,100 projects in Mexico. To do this, the HTA’s usually ran fund-raisers.
This too was a subsidy by the emigrants to the government. For it relieved the government of paying for things itself. Besides this, much of this money was simply siphoned off into the profits and wealth of the contractors hired by the government to carry out the projects.
Fox also looked for means to regularize some of the activities of immigrants in the U.S., especially by reviving Mexico’s vast, 131-year-old ID program, called the matricula consular, also known as the matricula. The matricula, issued by the network of 47 Mexican consulates in the U.S., had been a way for the Mexican government to keep track of its emigrant population– and collect taxes.
But in the years following 9/11, use of this ID card grew tremendously. First, with the overhanging threats posed to immigrants by U.S. government policy after 9/11, the cards were a form of official ID that undocumented immigrants could use to identify themselves.
The cards were also used to plug undocumented immigrants into the financial system, that is, to legally pay taxes in the U.S., as well as to open up bank accounts and credit cards, including with such giants as Citibank, Bank of America, US Bankcorp and Wells Fargo. In 2003, Wells Fargo estimated that it had used the matricula to open over 70,000 new accounts since it began accepting the card in November 2001.
For the Mexican government, most importantly, these bank accounts made remittances back to Mexico cheaper and easier for emigrants. It was also a source of profit for the big U.S. financial institutions, and it increased tax revenues for both governments.
Thus, even as the Mexican society suffered from the dislocation of the vast exodus from Mexico, the Mexican bourgeoisie, not to speak of the U.S. financial structure, found a way to profit. And even though so many of the Mexican workers in the U.S. were in an illegal position regarding their lack of rights, on the job and political, the Mexican and U.S. governments certainly found ways to “legalize” them when it came to depositing their money in the banks and getting taxes from them.
The Mexican government also encourages the migration of such a big part of the population out of the country because it serves as a safety valve.
Obviously, the actions of the U.S. and Mexican ruling classes have created a very explosive situation. Mexican society has already been rocked by social struggles in both the countryside and the cities in response to the extensive attacks. In the 1990s, for example, in the countryside, the Chiapas movement led by the Zapatistas garnered most of the attention. But there has been almost a continual series of peasant movements, including land occupations and the occupations of government offices in the impoverished states of Oaxaca, Tabasco and Guerrero. Simply to get food, starving peasants, including women and children, organized train heists, blocking tracks with boulders, overpowering train crews, and carrying away corn or other staples – scenes reminiscent of the period preceding the 1910 Revolution.
These kinds of movements continue today. In state of Oaxaca, 70,000 teachers went on strike on May 22. They occupied the entire center of the city of Oaxaca, and quickly gained widespread support throughout the region. In June, the state government sent thousands of special police to expel the teachers and their supporters from their encampments. There were several pitched battles, during which the strikers and their supporters succeeded in wresting control of the city center from the police. Six months after the strike began, it was still continuing.
Earlier in the year, tens of thousands of miners and steel workers engaged in a series of strikes. In an effort to break one of the strikes, on April 20, 850 police and Mexican troops stormed the giant steel complex in Lazaro Cardenas in the state of Michoacan that was being occupied by striking steelworkers. Police shot and killed two workers, gravely injured five, and left 40 more with less serious wounds, mostly by gun shots. Workers and townspeople retook the plant, but were then besieged by troops of both the army and navy, who took it back. But the workers continued the strike and, at the end of August, were able to win certain concessions, including getting paid for all the days they were on strike.
The Mexican government and bourgeoisie present the situation as though people only have two choices: either accept the worsening situation, or leave for the United States. But the struggles that are being carried out in Mexico show that many of the workers and poor are making a third choice, to fight for a better life against the rulers who are impoverishing them. By taking that path, they can encourage others to do the same thing, not just in Mexico, but in the U.S. as well.