Low pay = Jobs?
A global lie


A low paid job is better than no job. At least that's what those supporting corporate Globalisation argue. Big companies like Nike and Gap pay workers badly, expect them to work long hours in appalling conditions, buy off or exclude their trade-unions but at least at the end of the day, these workers take home a pay packet. It might be small, but it's better than nothing, and anyway, it's just a start.

That was the logic that led many Mexicans to seek work in the Maquiladoras. These are foreign factories, operating along the US-Mexican border. In them wages are low, there are few unions and they are exempt from most government controls. Conditions may not be great, but it was hoped that the factories would provide much needed employment. They were seen as a temporary stepping stone which would eventually lead to the development of more secure, better paid work in Mexican industries. At least, this was the story spun by the Mexican government.

As Mexican Labour News (Vol 7, No 1) explains, "between 1965 when the first maquiladora laws were passed and about 1982, Mexican government officials and business leaders argued that the maquiladora could help solve Mexico's employment problem. The border plants, it was suggested, would provide jobs for workers without altering the national program of a mixed economy and a policy of import substitution industrialization. Workers would find jobs in the maquildoras - then conceived as perhaps only a temporary phenomenon - until absorbed by other Mexican industries." In the late 1990s the Maquiladoras were the fasted growing sector of the Mexican economy.

Then last year, the US economy went into recession. Maquiladoras began to close and a couple of hundred thousand maquiladora workers have been laid off. Some of the companies, such as Thompson and Philips who were operating in Mexico for twenty years closed their operations and are moving to other parts of the world, most likely Asia. They laid off 15,000 workers. Twenty years of low pay and few rights has ended in unemployment in a country with no benefits or social support for those who have lost their jobs.

In Mexico workers could expect to earn $5 dollars a day, in Asia they will get $1. Investors once based in Thailand, where wages are now $1 an hour, are moving to Cambodia to take advantage of pay at 25c an hour or less. There are no winners, wages are below the poverty level.

Mexican Labor News concluded that "the lack of worker's rights and living wages undermines workers not only in the developed world, but also in the developing world ..the problem is not the low-wage Mexican or Chinese worker, or from the point of view of other countries, the low-wage U.S. worker, but rather the high profits of the corporations and the low morals of the politicians."

The power of the corporations is being challenged however. For example, in Thailand the Ladybird Garment Company has been producing children's clothes for export to the west since 1987. The company paid workers less than the legal minimum wage so in 1996 they formed a union. The company tried to break the union by refusing to allow union members work overtime. In Thailand basic pay isn't enough to survive and workers rely on overtime.

They offered union members bonuses if they left the union, they called to their homes. They began hiring temporary workers so that in the event of a strike they would have a supply of scabs available to them. For two years the unions negotiated. Then the employers ordered a lock out of those they considered to be the ringleaders.

Meanwhile international groups began to respond to an appeal for support. The Amsterdam-based Clean Clothes Campaign, the International Textile Garment and Leather Workers Federation, and the American-based Campaign for Labour Rights demanded that Ladybird's customers tell the employer to negotiate in good faith. Italian unions applied pressure on PreNatal and its parent company, Artsana, both Italian owned.

Asian Labour Update explains what happened finally "With mounting pressure from his customers and with government officials finally telling him he had to compromise, Mr. Veerasak and worker representatives were able to sign a contract on 2 July. The contract failed to make wage raises become based on seniority, but workers did get to a pay rise and won compensation for pregnant women, making them one of the few workforces in the country to have such an agreement.

The contract also gave the union paid time off for union activities, had provisions for incentive pay, provisions for adequate company transport and required the company to clean up the cafeteria. The agreement also allowed the 77 locked out workers to return to work immediately without repercussions or retaliation from management."

This is just one example of how workers themselves, organised in unions, can fight and win improvements in their working conditions. Unchallenged the big corporations will be happy to pay poverty wages until they find a cheaper and weaker workforce to exploit somewhere else. The only way their power can be stopped is if workers in all countries organise and fight for better wages and conditions for themselves and support the struggles against corporations where ever they occur.

Aileen O'Carroll


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This edition is No69 published in March 2002

Workers Solidarty 69 cover