Monday, November 29

The workers give a blow to the CTM | Opinion

A worker at the Silao plant with a copy of the collective agreement.
A worker at the Silao plant with a copy of the collective agreement.STAFF / Reuters

Corrupt unionism is one of the most destructive legacies of the post-revolutionary period in Mexico. Today, for the first time in almost a century and thanks to the passage of historic labor regulations in 2019, it is cracking. The new regulations require unions to validate their union representation through free and secret vote. Validation is the breaking point.

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This was evident at the General Motors plants. About 6,000 workers from Silao, Guanajuato, had an election that resulted in a rejection of the collective contract they had with the Confederación de Trabajadores de México (CTM). The CTM, one of the largest trade union organizations in the country, is known for its many corruption scandals. With this, the door was opened to the signing of a new collective contract with another union.

The fact is historical. For decades the CTM had managed to keep wages low through corrupt alliances with politicians and businessmen. The CTM’s leading predecessor, Joaquín Gamboa Pascoe, left his wife an inheritance of $ 15.5 million and was identified as a staunch client of tax havens thanks to the Panama Papers. The current leader was celebrated in business magazines and as a PRI deputy, he promoted the legalization of outsourcing, a figure that profoundly affected working conditions in Mexico.

This is how little by little the salary of Mexican workers fell systematically. According to the International Labor Organization, while in 2002 China was known to be the world’s maquiladora, with ultra-low wages of $ 299 per month, by 2016 Mexico was already paying less than China. Much less, to be exact, half. Even so, there are those who justify this aberrational situation.

Some argue that underpaying is necessary to keep jobs in Mexico, something for which there is simply no evidence. In Mexico, investors keep 65% of the economic value generated by the companies. This is too high. In the rest of the OECD countries, investors on average are only left with 31% and in Spain with only 30%. In other words, investing in Mexico pays investors twice as much as investing in the rest of the world. This is not normal.

Others justify this abuse in the distribution of profits of companies arguing that investing in Mexico is riskier. Without offering normal extra returns, they say, Mexico would not be attractive to investment. This is not true either. There are multiple countries where investing is riskier, such as Bolivia and Turkey, and even so, they distribute between 14 and six percentage points less profit to their investors.

This has made the margins of companies operating in Mexico unusually high for decades. In fact, economists Jan De Loecker from Princeton University and Jan Eeckhout from University College London have analyzed data from 134 countries and 67,000 companies, showing that over two decades large Mexican companies have earned an average of 57% above your production costs. This is much more than the world average where margins are only 33%.

The main reason why Mexico gives so little to its workers is corrupt unionism and therefore the vote at the General Motors plant is not only a breath of hope for the Mexican worker, but a possible new chapter in economic history from Mexico. One where business profits don’t depend on bad payments.

The Silao event, however, also comes with chiaroscuro. Not only for the actions of the CTM, which was accused by the Federation of Independent Trade Unions of the Automotive, Auto Parts, Aerospace and Tire Industries (FESIIAAAN) of attempting to manipulate the process through false news, but for the causes and consequences of the event. Three stand out.

First, Silao is the result of international pressure rather than a conviction of the Mexican political class to change the labor system at its roots. As part of the free trade agreement between Mexico, the United States and Canada (T-MEC), companies are subject to complaints for violation of human rights. These complaints are settled quickly and with heavy sanctions within the T-MEC. The United States pushed for the Silao vote to happen as part of this mechanism. Unions from Canada and the United States also supported. It is not clear that, without that pressure, the vote would have happened.

Second, there is the possibility that General Motors’ new union is a leopard. Many of the rosters that will compete to replace the CTM have CTM members on them. In fact, since 1995, General Motors has had several unions, but all of them have been affiliated with the CTM. Changing everything to change nothing is risk.

Finally, there is a matter of priorities. Of all the manufacturing industries, the auto parts industry is the one that generates the most jobs and is not the one that pays the most. Other industries like blacksmithing, computers and boats are in much worse working conditions. The dilemma is that corrupt unionism in other industries may be even more entrenched, but less visible because of its little relationship to the T-MEC.

It is because of all the above that achieving a renewed Mexican unionism requires more than voting. It requires the accompaniment of the worker, unaccustomed to mobilizing, so that he knows his rights, the public financing of independent unions and the criminal prosecution of corrupt leaders. Or in the words of the young trade unionist Sergio Guerrero, general secretary of the National Union of Workers by Application: “You have to be alert, the laws are useless without organized workers.”

Mexico must not only have the right laws, but a willingness to help workers take advantage of them. Without the support of the Mexican State, the worst possible scenario could arise: the creation of new unions, which are actually old, or which are the same as the previous ones.

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