On a mud street in a border city, Daniel Zamora lives with a brother and sister and her 3-year-old daughter in a two-room shack with one bed and no plumbing. Barefoot, he sits on a couch in the front room on a Saturday afternoon. Up north, it is already fall. But here on the Mexican side of the Rio Grande, the world advances more slowly. A summer sun turns the tin roof of Zamora’s cinder-block home into a griddle.
The door is open to a hard-packed dirt yard and a pool of stagnant wash water. A fan on a picnic cooler blows air around the room. On the kitchen table across from the couch and next to a gas stove is a half-full jug of milk. The milk is warm; the family’s refrigerator broke down two months ago. Outside, a rooster crows.
Zamora’s niece, Berenice, drags a little plastic chair across the concrete floor so she can sit in front of her uncle. Her mother, Delia, 23, is at work at the municipal water-purification plant. Zamora’s brother Israel, a 19-year-old student, is at the other end of the couch.
A wispy 21-year-old with a mustache and neatly brushed hair, Zamora got home after midnight. Since he was 16, he has worked the second shift at Zenith Electronic Corp.’s factory complex here in Reynosa. He puts in 45 hours a week, spooling copper wire around pieces of plastic that go into television sets built for sale in the United States. After deductions, which include installment payments on an off-brand portable TV, his paycheck comes to 102.70 pesos, or $32.97, a week.
Zamora gets up and walks into the back room, returning a moment later with a jewelry box. It holds a lapel pin celebrating his employment anniversary. “Zenith. Five years,” the pin reads in English. He has never taken it out of its plastic wrapper.
Here along Mexico’s northern frontier-in the homes and workplaces of countless factory hands like Daniel Zamora-the fortunes of nations are shifting. Angling to cut costs, hundreds of American manufacturers have shut down plants at home and transferred the work just across the border in Mexico, where, for the wages of one American busboy, a company can hire three or four assembly-line workers. Not surprisingly, given this huge wage gap, these employers and their shareholders generally are profiting from relocating.
A chunk of the U.S. workforce, which depends on these transplants for sales, is benefiting too. At the same time, however, the outflow of manufacturing jobs has stranded entire communities and helped drag down the real income of average Americans. The money these corporations are saving would have been in their paychecks.
The effects of the border’s industrialization on Mexico are also hard to neatly categorize. The maquiladoras, as these assembly plants are known, provide a steady income to an uneducated population driven from the countryside by unemployment and hunger and a lack of qualifications to do much else. The maquiladora jobs, however, are numbingly repetitive. Moreover, their meager paychecks confine these families to urban slums that often are only slightly less primitive and more polluted than the rural hometowns they fled.
If history repeats itself, the children of these first-generation factory hands will lead more comfortable lives. Progress, however, is relative. For many of these children, progress would be a bathtub or a second pair of shoes. Progress would be a standard of living that most Americans attained-and then surpassed-long ago.
The border is reshaping politics too. Mexico’s maquiladoras (from the Spanish verb maquilar, which means “to put together or assemble”) have become a bogyman in the debate over the North American Free Trade Agreement (NAFTA). Foes of the trade pact fear that a formal economic union would only quicken the flight of U.S. blue-collar jobs, further endangering the American Dream. Responding to this fear, which runs deepest in the Midwest, Congress may yet defeat the agreement.
As the proliferation of American-owned maquiladoras makes plain, however, the border already is permeable and no longer provides job security for American workers, especially the unskilled. In fact, in this day and age, when technology and capital can be whisked around the globe with a keystroke, national boundaries are increasingly irrelevant. The economic forces eliminating jobs in one area and creating them in another are simply too powerful to be blocked by killing the trade agreement.
Still, the U.S.-Mexico border serves to separate rich from poor. Within commuting distance of the air-conditioned subdivisions and shopping malls of the American Sun Belt, the prevailing wage is less than $2 an hour and homes are constructed with scraps of wood scavenged from packing crates.
The maquiladora slums of Reynosa and Mexico’s other border cities lack even the basics of the developed world. The Mexican government shares responsibility for these shantytowns, for while it encouraged the migration of U.S. factories to the border and sanctions many of the settlements, even turning over land for residential development and laying out streets, it never adequately prepared for the population that streamed to these jobs. Even if the government had built an infrastructure, however, these families would still be impoverished and doing without things that Americans take for granted.
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Though most households now have electricity, entire neighborhoods still rely on kerosene lamps and candles for light and automobile batteries for power, too poor to come up with the collective down payment that the state-owned utility demands before it will string power lines. Few families have even a used car. And none, it seems, is able to afford a telephone.
Improbably, groceries are no cheaper here than in the United States. As a result, many families seldom buy fresh fruit and vegetables. To stretch food budgets further, many households raise chickens. Some also keep livestock and, for transportation, mules and horses. The animals often roam freely, rummaging through garbage for food.
Houses are also small and overcrowded. Unable to rent much space with a single paycheck, many maquiladora workers combine paychecks to obtain housing. They and their dependents then pack into a couple of ramshackle rooms, often sharing beds with their children or siblings.
None of the privations, though, is more dire than this: Most households have neither potable water nor sewers. Without plumbing, families use outhouses and bathe outside in stalls, dousing themselves with buckets of unfiltered water drawn from outdoor faucets or shallow wells. Despite publicized health risks, they also drink from these sources.
Households dispose of waste water by tossing it onto unpaved streets, where it forms a stew of rank mud. Municipal disposal methods are often just as crude. Whether by default or design, these border cities haven’t upgraded their waste treatment plants to keep up with the influx of people. Overwhelmed, they typically get rid of sewage by dumping it raw into border rivers, where it flows into the intake ducts of city waterworks and irrigation systems downstream.
“The border area,” concludes an American Medical Association special report, “is a virtual cesspool and breeding ground for infectious disease.”
U.S. Rep. Marcie Kaptur (D-Ohio), a zealous opponent of the free-trade agreement who has toured Mexico’s border on two fact-finding trips, calls conditions appalling. “Certain people are being advantaged while others are having their whole livelihood pulled from under them,” she says. “The whole structure advantages multinational corporations and absentee shareholding, and it does not promote development from the bottom up. I don’t see the great benefit to development of the continent.”
For many families, however, the hardscrabble life in these settlements is an improvement over the life they left behind in Mexico’s rural interior. In their hometowns, they recall, the only jobs were seasonal farm and construction work, and often there was no work at all. Here, at least, they have the security of a weekly paycheck.
“It is better here,” says Zamora, whose family moved 400 miles to the border from Guanajuato in central Mexico in 1985, after his mother died. In Guanajuato, he says, he shined shoes to help provide for his younger brothers. “There is more opportunity here for a job.”
Here and there amid the squalor, moreover, are glimpses of material progress: children or younger siblings of maquiladora workers enrolled in college; families buying new homes or enlarging old ones; a satellite dish; a young woman wearing braces; babies in disposable diapers; streets dug open as, at last, sewer lines are laid; rising wages; parking lots.
As imperceptibly as a change of season, Mexico is slowly modernizing, south the border.
Yet despite years of hard work and self-denial, many things remain out of reach. In her rented home, Silvia Hernandez Dias and her husband have a gas stove and a refrigerator, which they got as a wedding present. They also have a television. Though Hernandez has worked for Zenith for 10 years, their TV set was made by a competitor. “It is very difficult to own a Zenith,” the 28-year-old woman says. “They want cash.”
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Mexico’s border industry, which employs more than 500,000 people, is dominated by Fortune 500 corporations. In Reynosa alone-a sister city of McAllen, Tex., and just one of a dozen maquiladora clusters-are subsidiaries of AT&T Corp., R.R. Donnelley & Sons Co., General Electric Co., General Motors Corp., Interco Inc., Johnson Controls Inc., Premark International Inc., TRW Inc., Whirlpool Corp. and Zenith Electronics Corp.
Zenith, headquartered on a 70-acre tract in suburban Glenview, opened its first factory in Mexico in 1971, six years after the maquiladora industry was created. Under this bilateral setup, companies are permitted to bring U.S. components duty-free across the border to Mexican factories, where the parts are assembled into finished goods. These products then are sent back to the United States, and manufacturers are assessed duties only on the value added by the assembly process.
Zenith has expanded considerably in its 22-year history in Mexico. From a single plant in Matamoros, at the mouth of the Rio Grande, 50 miles east of Reynosa, the company has grown to facilities in five Mexican cities and 18,000 employees. Every Zenith TV set sold in North America is now assembled in the company’s Mexican maquiladoras.
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Zenith relocated to Mexico for one basic reason: survival. Up against low-cost Third World manufacturers and Japanese and European competitors that could subsidize their U.S. operations with profits from sheltered home markets, the company had to slash expenses or face bankruptcy, says Zenith Chairman Jerry Pearlman.
The move is paying off. Even though Zenith must pay more for shipping and utilities, Pearlman calculates that the company is saving $200 million a year in production costs by assembling its products primarily in Mexico instead of the United States.
Moreover, by going just across the border to Mexico for cheap manual labor, Zenith has been able to retain a rump operation of parts suppliers in the United States. Zenith still produces picture tubes in suburban Melrose Park and circuit boards on Chicago’s West Side. The company also molds plastic cabinets for televisions in Springfield, Mo., and maintains a research and development staff in Glenview. The company plans to keep these plants open.
If Zenith had chosen to build televisions in Southeast Asia instead of Mexico, Pearlman says, higher transportation costs would have rendered each of these remaining U.S. facilities uneconomical, and others on the other side of the Pacific would now be doing their work.
“If we were not in Mexico, we would probably be out of business today or we would have made a very major move into Asia,” Pearlman says. “We could not have survived one year in the mid-1980s without the $200 million-a-year cost savings.
But Zenith’s exodus has left thousands of Americans behind. In the late 1970s Zenith employed 4,200 unionized employees building televisions in Springfield. Today the Missouri facility has fewer than 500 employees, including management and other non-union personnel. The company’s total U.S. payroll has dwindled to 6,000, while in Reynosa alone, its workforce now totals 9,500.
“It used to be you’d start at a place and you’d retire from that place, but that kind of got shot all to heck,” says Mike Yeubanks, president of the International Brotherhood of Electrical Workers’ local in Springfield. Many of those laid off have enrolled in job retraining programs, and Yeubanks says that some will regain the lifestyle they once had. But he knows that others never will. “There’s only so many jobs out there that pay decent money,” he says.
Zenith is now Reynosa’s largest private-sector employer. Its five facilities here are modern, equipped with a growing number of computerized machines. On the assembly lines, employees sit on stools under bright fluorescent lights as, piece by piece, they construct television sets. The factory floors are clean, spacious, relatively quiet and air-conditioned.
At each work station where employees use lead to solder circuitry, ducts suck up the fumes, drawing them out of the factory in compliance with Mexican health and safety requirements that, in this case, are stricter than those in the United States.
The company offers the standard benefits package negotiated between the maquiladora industry and its labor union. These benefits include three weeks of paid vacation and seven paid holidays a year. Under the pattern labor pact, Zenith also provides subsidized meals in its cafeterias and gives workers tax-free coupons that buy groceries. By law, workers can qualify for a pension equal to about a year’s salary after 15 years on the job. The government guarantees health care, financed by taxes on employers and unions.
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Zenith also promotes from within. In Matamoros, for example, the company has only eight American employees out of a staff of 1,900.
The company’s workforce is predominantly female and young; the average age of Zenith’s factory workers is 20. Turnover is a constant problem. In Reynosa, for example, the number of employees quitting after less than a year equals the total payroll roster for that year. Generally, though, any of the Zenith maquiladoras would be at home in any U.S. industrial park, except for one thing: wages.
By U.S. standards, the company’s wages are crushingly low. According to Pearlman and other Zenith executives, Mexican factory workers are paid less than $2 an hour including benefits. The executives won’t be more specific. But based on employee pay stubs, it appears that a typical midlevel veteran working the standard 45-hour week in Reynosa gets about $1.20 an hour in wages, before taxes and other deductions.
“These jobs pay rice and beans,” complains Domingo Gonzalez, an analyst with the Texas Center for Policy Studies, who lives on the border in Brownsville, Tex.
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As cold-hearted as it may sound, Zenith workers may be earning what they’re worth. Many never attended high school and have no marketable talents. In a tight or closed labor market, these people could effectively bargain for higher wages. But as America’s working class has learned, the world is awash with billions of essentially uneducated, unskilled people all competing for jobs. In Mexico alone, 1 million more people enter the labor force every year. Along the border, people take what they can get.
