Drug wars in Juarez…and the cause—NAFTA, really.
by Stormy and Dan
Drug wars in Juarez…and the cause—NAFTA, really.
Mexico drug cartel in the Guardian:
Mexico’s main crossing point to the US has always had a seedy border vibe, but two decades ago it was envisaged as a showcase for a new economy built on free trade, manufacturing and cheap labour.
Factories drew migrants from all over Mexico but low wages kept families poor and often forced both parents to work, leaving children unsupervised. Secondary schools barely functioned, leading to a 50% drop-out rate. Today cartels and gangs find easy recruits amid the 50,000 ni nis, teenagers who neither study nor work. (bolding is mine)
The poverty in Juarez, the slave wages were brought about by NAFTA. Juarez is not only a violent drug town, it is also NAFTA heaven… As this article Die off: explains the hellhole for those who work there; a money maker for all the companies that outsourced:
There are a total of 350 foreign-owned factories in Juarez, the highest concentration in all of Mexico, and they employ 150,000 workers. The twin plant system-in Spanish, rnaquiladoras-was created by the United States and Mexico in 1965 so that Americans could exploit cheap Mexican labor and yet not pay high Mexican tariffs.
When I practically drill the actual wages into someone’s head when discussing the issue, he or she will counter by saying that the cost of living is much cheaper in Mexico. This is not true. Along the border, Mexican prices on average run at 90 percent of U.S. prices. Basically, the only cheap thing in Mexico is flesh, human bodies you can fornicate with or work to death. What is happening in Mexico betrays our notion of progress, and for that reason we insist that each ugly little statistic is an exception or temporary or untrue. For example, in the past two years wages (2) in the maquiladoras have risen 50 percent. Fine and good. But inflation in that period is well over 100 percent.
Juarez is an exhibit of the fabled New World Order in which capital moves easily and labor is trapped by borders. There are a total of 350 foreign-owned factories in Juarez, the highest concentration in all of Mexico, and they employ 150,000 workers. The twin plant system-in Spanish, rnaquiladoras-was created by the United States and Mexico in 1965 so that Americans could exploit cheap Mexican labor and yet not pay high Mexican tariffs. Although the products that come from the factories are counted as exports (and thus figured into GDP), economists figure that only 2 percent of material inputs used in maquila production come from Mexican suppliers. All the parts are shipped to Mexico from the United States and other countries, then the Mexicans assemble them and ship them back. Two or three thousand American managers commute back and forth from El Paso every day
Workers who lose their jobs receive essentially no benefits beyond severance pay. Mexico has no safety net. Independent, worker-controlled unions barely exist, and anyone trying to organize one is fired, or murdered. (3) It is almost impossible to get ahead working in the maquilas. Real wages have been falling since the 1970s. And since wages are just a hair above starvation level, maquilas contribute practically nothing toward forging a consumer society. Of course, as maquiladora owners and managers point out, if wages are raised, the factories will move to other countries with a cheaper labor force.
And so industry is thriving. Half a million cargo-laden trucks move from Juarez to El Paso each year. Boxcars rumble over the railroad bridge. New industrial parks are opening up. Labor is virtually limitless, as tens of thousands of poverty-stricken people pour into the city each year.
There are few environmental controls and little enforcement of those that do exist. El Paso/Juarez is one of the most polluted spots in North America. And yet it is a success story. In Juarez the economic growth in 1994 it was 6 percent, and last year it registered 12 percent.
According to Lucinda Vargas, the Federal Reserve economist who tracks Mexico’s economy, Juarez is a “mature” economy. This is as good as it gets. With the passage of NAFTA, narcotraficantes began buying maquiladoras in Juarez. They didn’t want to miss out on the advantages of free trade.
In 1991, Nicholas Scheele, the head of the Ford Motor Company in Mexico, said in admiration of the government’s control, “But is there any other country in the world where the working class . . . took a hit in their purchasing power of in excess of 50 percent over an eight-year period and you didn’t have a social revolution?” Maybe you get something you don’t have to define as a revolution. There are over 200 gangs in Juarez.
Ok…now who is responsible for conditions in Juarez?
Business week notes:
Mexico’s Ciudad Juárez is one of the most violent places on earth. Drug gangs fight endless battles with each other and police in the streets and alleys of Juárez’ poorest neighborhoods. In the past 28 months this city of 1.5 million, across the Rio Grande from El Paso, has recorded 5,200 murders.
Even though Juárez is the center of Mexico’s war on drug dealers, it’s holding its own as the center of maquiladoras, the special zones Mexico developed 30 years ago to attract investment. “It’s a dual reality,” explains Bob Cook, president of the El Paso Regional Economic Development Corp., a group that encourages multinationals to invest on both sides of the border.
In return for building factories in the maquiladoras, multinationals get favorable tax treatment, pay low wages (sometimes as low as $4.21 a day)….(Dan here…and location, freedom from paying for schools and such, in gated industrial parks)
Blue chips like Johnson & Johnson (JNJ), Delphi Automotive, and Scientific Atlanta show no signs of leaving. El Diario, the local daily, is filled with help-wanted ads from Lear (LEA), Delphi, Siemens (SIE), and other companies.
Gee, isn’t this kind of a replay of the British with opium and China? Not exactly, but a major capital rich nation using drugs to make money directly or indirectly?
If you assume that humans at least try to find conditions more favorable to them than the available alternatives, I guess the workers of Juarez believe the alternatives would be worse for them. If the maquiladores were small enterprises I would accept that maybe they found a few folks to easily exploit. But they are quite big. It is still exploitation of a kind, but the right question is what is wrong in the rest of Mexico that the chance to work in this environment still appeals to a lot of people. Would reforming/ending NAFTA “reform” Mexico enough to improve these folks currently harsh existence? This sounds terrible, but I missed the part with what could make it better.
I read an article quoting the mayor of TJ saying that Mexico does have a $4.00 min wage law. But the companies threaten to move plants, or shift production, to China or elsewhere if they have to pay that. So the law is not enforced.
So the issue may even be bigger than NAFTA. It may be our free trade policy that allows China in another door.
But back in the early 90s I had a few year gig with a company that had one of our factories in Juarez. The general manager, product manager and a few engineers were on the US side. A couple of the engineers were Mexican nationals that had completed college in a Mexican University and worked in the US on visas. We had a Mexican national living in Juarez as a plant manager. We paid $2.50/hr for lower end labor, more for skilled machinists, along with a small “piece work” production bonus. We were amazed how fast that could make them work. As far as education goes, the average level there was 5th grade. We had “school” on the off hours to teach them how to READ spanish and a little math so they could read blueprints, manufacturing and QC instructions.
But if we had to build the product in the US, we would not have been competitive in the market.
Also, poor unemployed people from all over Mexico move there for jobs, so we are creating hellholes right on our border. Additionally, the cost of living in Mexico is 60% of the US, when you get farther away from border towns, resort towns like Cabo, and maybe parts of Mexico City.
I really have to disagree with you. Yes, there is bad poverty in northern Mexico. But is it due to NAFTA? I seriously doubt it. There was severe poverty in Mexico and on the border before NAFTA. Just because there is poverty now does not demonstrate that NAFTA is the cause. Can you demonstrate that the Mexicans working at low wages in the border plants are worse off than if the border plants did not exist? I doubt it. Without NAFTA they probably would be working at even lower wages in Mexican agriculture. The problems of Mexican poverty has much deeper roots and you presented no evidence that NAFTA made the poverty worse or that it would be better without NAFTA.
On the other hand, your point that Chinese competition keeps Mexican border plant production lower and prevents more real wage gains for Mexican workers is correct. But that is not the fault of NAFTA.
The only solid evidence that NAFTA had made Mexico worse off that I know of is that US corn exports to Mexico are cheaper under NAFTA and that has harmed Mexican agricultural output. But on the other hand Mexican consumers have benefited from the lower cost of corn. Can you demonstrate that the lower price of corn in Mexico has done more harm than good?
Your entire piece is a classic case of correlation is causation, but we all know better than that.
I expect better than this from Angry Bear. I expect Angry Bear to be more than just the left-wing equivalent of Cafe Hayek.
Contending that NAFTA is the proximate cause of the violence in Juarez is a non-starter with me. The reasoning given is equivalent to saying the proliferation of cell phones is the cause, since mobile communication is necessary to carry out the deeds we’re witnessing there. Tangentially it contributes, but cannot be considered one of the causes.
Much higher on the list of causes is drug prohibition in the U.S. which creates an unregulated black market, coupled with Juarez being a large border city with a long history drug smuggling.
“For example, in the past two years wages (2) in the maquiladoras have risen 50 percent. Fine and good. But inflation in that period is well over 100 percent.”
Cockamamie bullshit. Total and complete lie. Horseshit.
Between 3.5 and 6% a year.
Stormy, Dan, do yourselves a favour. At least think through the basic assumptions of the things you’re posting. 100% inflation in Mexico? Recently? That just doesn’t pass the smell test and you’re (apologies but it’s true) fools for quoting someone who thinks it could even possibly be true.
You’re both better than this. Be so.
Why do you not get equally upset that the American minimum wage really did drop almost in half over 39 years (see my post; just above yours) and that the median wage may just have tragically have VIRTUALLY (hidden, potentially, whatever) dropped 40%: rising only 20% as average income doubled?
Seems a lot more to get really worked up about that half to most of the workforce in the most productive nation in history having lost their economic lives. Of course, supposed progressives over here don’t get much worked up over it either — so whatever it is, a lot of it is going around. 🙂
“Why do you not get equally upset that the American minimum wage really did drop almost in half over 39 years”
Because I know the statistics for the US minimum wage? Almost nobody other than the occasional teenager and those earning tips actually get it?
“ and that the median wage may just have tragically have VIRTUALLY (hidden, potentially, whatever) dropped 40%: rising only 20% as average income doubled? “
This is impossible. The median wage cannot both have fallen and risen at the same time.
BTW, the actual cause of the drug wars in Juarez is, umm, drugs. Specifically, the US refusal to legalise and tax them.
So the Brits (or at least one Brit [being so sophisticated]), have found that taxes eliminate contraband smuggling. Maybe we should also legalize the smuggling of exotic species too and sex slaves then of course a tax could put an end to all of that too. But then if we were to legalize heroin and cocaine– the cost of those, on top of our tobacco and alcohol costs, considering the sin taxes of course, will not leave most us with any extra money for exotic pets and slaves so maybe the tax on exotics is unnecessary.
“BTW”, the post is dealing with the rise in violence and poverty in Juarez within the context that exists. That makes your comment beside the point and smug. Consider what might be learned from your “actual cause”, and from that regarding the changes since NAFTA, and the post, even with its errant claim on NAFTA being the ’cause’, becomes at least somewhat informative by comparison in regards to the rise in violence. Your comment on the other hand is just a waste of everyone’s time.
“BTW”, this remark: “Because I know the statistics for the US minimum wage? Almost nobody other than the occasional teenager and those earning tips actually get it” is, well, let us just say that I know the statistics on stupidity and given the plight of the working poor in the US this statement is stupid. Take your “statistics” and use them to exploit your own downtrodden… our exploiters do not need your help. Our young adults have had nearly all opportunities other than joining the military or going to college taken away over these past few decades. Does your statistical omnipotence include the rise in military recruitment rates as the real minimum wage has fallen. Do you know that the longest period for Congress not to raise the minimum wage was from 1998 to 2006. Does it seem odd to you that this period was perceived to be one of prosperity yet the minimum wage was held down more than twice as long as usual at time when reserves were needed to fight a pointless war? Do your statistics include all of those coming out of high-school who are not included in the statistics because there are no jobs for them? Don’t you find statistical analysis less than telling at times?
As a young engineer, recently graduated from a US university in 1972, I worked in a maquiladora in Nuevo Laredo and then in Nogales, Sonora. There was NO NAFTA then. The Maquiladora program has NOTHING to do with NAFTA and it was started way before NAFTA came along. NAFTA has to do with free trade between the countries and although a lot of its provisions and effects can be debated, one thing is for sure, it ended a lot of corruption in the Mexican customs service. It used to be that we went shopping in Texas and had to reserve some cash for the checkpoints at kilometer 26 to give the customs guy.
Minimum wage? You guys don’t know what the hell you are talking about. In 1974 I had 90 girls in my production line in Nogales. Before they came to work for us, they had two choices: work as maids in a house or in one of the border shops; the wages were FAR less than the minimum wage in both cases. Of course, there were the whorehouses as a third option. We paid NO ONE minimum wage.
You have to be a Mexican to understand what the real problem is. It is not NAFTA or the Maquiladoras, not even the so-called Drug Wars. The problem with Mexico is that it is a country that has not learned, and does not want to learn, civic responsability. The rich want to get richer, own houses and condominiums in other countries and have their sons and daughters speak English rather than Spanish; the middle class wants confort and security and jobs that alllow then a yearly vacation and good private education for their kids. the poor want food and shelter but NONE of the above wants it for anyone else but himself.
So, it is easy for a political party to rule 72 years, and for an overbearing, corrupt, drug-ridden nation like the US to have its way. Who is going to stop them? Not me, not my neighbor. I have gotten out and will soon have my children out. My neighbor’s kids are alrady in the US and he will soon follow.
The day the US gets the hell out of Mexico and the Mexicans start caring about their country and their neighbor, then all of this nonsense will stop. But, that’ll be the day!
Nice reply, Roberto.
I would agree with you that Mexico is responsible for Mexico. And that the U.S. should butt out. Similarly, and this will make my liberal friends angry, but the U.S. should enforce its immigration laws. Canada enforces its laws.
(I am presently a landed immigrant in Canada. I could not just waltz across the U.S. border and have the Canadians feel sorry for me and mine…take me in, give me….If I did not take honest and proscribed steps to immigrate, they would have kicked my sorry ass out of Canada.
Just as a point of fact though, the web definition of “maquiladora” is “an assembly plant in Mexico (near the United States border); parts are shipped into Mexico and the finished product is shipped back across the border.” And that is the definition I have used.
If you wish to use a different definition, then we will be talking about two different things, won’t we? Smiles.
Cut and pasted from my latest rant:
Living too remotely from the day-to-day interactions – no pitfall in organic chemistry – can fuzz out crucial ifs, ands and buts. Economists of all stripes (most are progressive) start every minimum wage dialogue with ye ole first week supply and demand chart and mostly end there – skip selling fewer units (or hours) for more dollars – miss that a raise that increases teen unemployment may have attracted more trainable adults (labor price was too low) – forever blind to the missing American-born workers behind Chicago fast food counters where the state minimum wage recently reached Eisenhower’s 1956 level, $8/hr – and even behind San Francisco counters where annual inflation adjustments will maintain the city minimum wage, at LBJ’s 1968 level, $10/hr. $7.25/hr ($5.50/hr!): fuggedaboutit!
What all these numbers mean to the lives of real people — which is all they really mean — seems lost on everybody in this country who think they care — even lost on those they affect in this country because nobody cares enough to tell them what the numbers really are.
Fine, hey, if you don’t want to make contact with reality then don’t. I’m a liberal, I’m there: but if you do want to make contact with reality then do go and look up at Census the groups of those who do get the minimum wage.
No, no, go on.
We’ll wait for you to come back shall we?
Once again, you are beside the point. Even though your claims that: “Almost nobody other than the occasional teenager” are sophmoric in a hyperbolic sort of way, I did not dispute your statistical position. If I had, I would have already provided some statistics of my own.
My point regarding your statistical stupidity has to do with what the statistics ‘fail’ to show (and now we can add reading skills to your list of shortcomings too).
I’m a little sceptical as well about this: “ I’m a liberal, I’m there”, but I don’t really care about what you think you are and of course only a foolish and delusional person believes that ‘reality’ exists within the confining boundries of statistics. But if statistics make you feel secure in your ‘reality’… well then… good for you. I suppose that hundreds of year’s worth of paresitic existence has a lasting influence on a culture and its people and so statistics are probably comforting at times.
Here are the characteristics of those who receive the minimum wage. From 2005, but that’s just the first set that popped up in Google.
Of the 1.9 million who receive the min wage or below, 1.3 million are in service occupations and of those, 1.1 million are in food or related food serving occupations. Waitron units getting tips….
Of that 1.9 million total 1 million are teenagers.
No, we don’t know who are both teenagers and waitrons, there will be some overlap. But while I may have used hyperbole, I am still basically correct.
“So the Brits (or at least one Brit [being so sophisticated]), have found that taxes eliminate contraband smuggling.”
Certainly not. Only that legalisation and taxation reduce contraband smuggling contra illegality and leaving the trade in the hands of the most vicious criminals in the entire society.
We’ve known that since the end of Prohibition led to Bud and Miller fighting it out with SuperBowl ads rather than machine guns in garages.
I have been living near the Mexican border for most of my 54 years, and so, maybe, I can help you understand one of the problems that comes from limiting your knowledge base to that which is supplied by the MSM, formal education, and statistical analysis etc.
I have known people who smuggle gasoline, using modified pick-up trucks outfitted with hidden tanks and customized suspension systems. Tobacco and alcohol products also have taxes that are high enough to make smuggling profitable and this is done all-day, everyday, at every border crossing from Brownsville to San Diego. If there is a locally owned market in the Southwest that does not openly sell contraband I have not yet come across it. And it is mainly those products with heavy tax burdens that allow for this to be cost effective. Mexican Corriente cattle, which are used primarily in rodeos, have a ‘sport tax’ which is levied by the Mexican government, and so herds of these cattle are driven across the border in the dark of night.
Plus, where I live in Texas ‘moonshine’ and other homemade alcoholic beverages are increasingly being used as currency. The taxes on tobacco products have also reached a level that has prompted folks to grow tobacco and use it as yet another type of currency. And, there has been an upsurge in barter of late as ‘sin’ taxes on certain goods have risen. Of course it is impossible to provide any statistical evidence for these claims, but if you want to come for a visit it just so happens that I have ‘evidence’ of all of these ‘goods’ right here on my property, there is in fact some tobacco curing in my shop building right now.
Put bluntly, Taxes CAUSE contraband smuggling, not: “reduce contraband smuggling“! And, if the MSM’s shallow understanding of the so called ‘Tea Party’ movement has led you to believe that it is only a political anomaly based on ignorance and folly… well, it is instead part of something that is much more than that. People from a wide range of political and socioeconomic backgrounds are finding ways to withdraw their support for the ‘status quo’, our withdrawals are not always for reasons that align neatly, but we do tend to find ways to express our discontent in common ways. Those being ways of not just the avoidance of taxes, but also by exploiting ways to profit from the competitive opportunities that are created by exorbitant prices due to excise taxes. It is the legalizing of drugs that would end the ‘drug war’… not the taxation of legalized drugs.