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NAFTA Renegotiation Could Mean Increase for Mexican Wages

Mexican WagesThe U.S., Canada and Mexico began renegotiating the North American Free Trade Agreement (NAFTA) on August 16. An updated agreement could result in higher wages for struggling Mexican workers.

One of the main topics of renegotiation is expected to be workers’ rights. Then presidential candidate Donald Trump stated that he desired a new NAFTA for Americans in the Rust Belt – one way to do so is to close the gap between American and Mexican wages.

Signed into law in 1994 by President Bill Clinton, NAFTA lowered trading barriers between North American neighbors and opened the gates to free trade. Many businesses migrated to Mexico as a result.

Soon after, North American consumers experienced increases in their standards of living. Prices of consumer goods depressed due to businesses cutting labor costs via lower Mexican wages.

Lower prices do not paint a complete picture, though, as many blue-collar workers in the U.S. were left without jobs. At the same time, keeping Mexican wages low was in the interest of many manufacturers.

Now, over 20 years later, NAFTA will be renegotiated and the U.S. will have manufacturing on its mind. One way to entice businesses to stay in the U.S. is to impose new labor restrictions in Mexico.

The average wage in Mexico is not even a fifth that of that in the U.S. New labor restrictions could mean higher wages for the average Mexican laborer, who currently lives on $4.50 a day – sometimes less, depending on the area.

There is also the fear that the talks will lead nowhere because what the U.S. wants might not align with the interests of Mexico. Ildefonso Guajardo, a Mexican representative who will be present at the talks, has suggested that, if they are treated unfairly by the U.S., they will return the treatment.

Labor economists have said that the labor reforms that Mexico had previously agreed on during the Trans-Pacific Partnership (TPP) should be the starting point for the U.S. This is the same partnership from which President Trump just pulled the United States.

Officials believe that NAFTA discussions should be finished by the end of the year if all goes smoothly. Labor reforms would certainly mean good news for Mexican laborers but not-so-good news for consumers who will feel the burden of higher prices.

– Thomas James Anania

Photo: Google

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Garment Workers’ Hunger Strike Success

hunger-strike-success-bangladesh
Bangladesh has become synonymous with low paid garment workers. Bangladesh boasts more than a $20 billion garment industry that employs four million workers in 4,500 factories. Most of the workers are women—who make up 80 percent of the garment workforce.

Garments produced in Bangladesh export to western clothing stores like Wal-mart and H & M.

Serious accidents within the factories, as well as strikes and protests, have brought the plight of garment workers to a more international level. Specifically the collapse of the Rana Plaza building in April 2013—in which 1,120 garment workers were killed—which caused national and international outrage.

This incident led the Bangladeshi government to increase the minimum wage by 77 percent, up to 5,300 taka ($68) a month. Workers are also now allowed to form unions without factory owner consent.

Even with this pay raise, Bangladeshi garment workers are some of the lowest paid in the world and many are calling for better regulation in terms of workers safety and physical health.

Change is slow though, as this past January, news reports showed that almost 40 percent of garment factories were not paying the promised wage increase of $68 a month.

Strikes, accidents and failure to increase monthly pay are apparently the norm when it comes to garment workers in Bangladesh.

However a small victory was won this weekend when an 11-day hunger strike successfully received the back pay and holiday bonus workers were demanding. The strikers represented 1500 workers from five different factories in the Dhaka’s Badda district that all belong to the Tuba Group.

The strike was not completely uneventful as last Thursday workers were forced out of the factory where they were staging the strike. Police used tear gas and batons to remove the 400 strikers.

But this past Sunday the workers finally received their back pay. The strike began on July 28 and luckily only had to last 11 days.

This is only a small victory within the larger fight of fair wages for garment workers. The garment industry is central to the Bangladeshi economy and the global supply chain forces large companies to demand competitive wages.

Bangladesh competes by offering extremely low wages that companies can pay their workers. So although the success of this strike is a step in the right direction, Bangladesh has a long way to go if it wants to begin treating its workers with fairness and dignity.

– Eleni Marino

Sources: Wall Street Journal, Reuters, CBS News, The Express Tribune, Australia News Network, The Guardian
Photo: The Guardian