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NAFTA's bittersweet boom

By Diane Lindquist STAFF WRITER

July 31, 2000

LA JOYA, Mexico -- For more than a half-century, Jalisco's rural youth had little choice but to head north and sneak across the border into the United States for work.

But then came the North American Free Trade Agreement and the promise of jobs at home.

"With NAFTA we will export goods, not people," Carlos Salinas de Gortari said when he was Mexico's president.

In Jalisco, the state that has sent more undocumented workers to the United States than any other, only half of NAFTA's promise has come true.

Exports have increased 500 percent, and the state now ranks second in generating jobs. But young people still leave to work in the United States.

They leave partly because of money. Wages in the United States remain about eight times higher than in Mexico.

They also are driven by tradition. Migration has become so ingrained in the region's rural culture that, for young men, the trek north represents a rite of passage.

The exodus of Jalisco's youth, coupled with the state's job boom, has created what some people thought they never would see here: a labor shortage.

"If they have good eyesight, hands and legs, we'll hire them," said Hung Chee Loh, manager of NatSteel, which makes a variety of high-tech products in Guadalajara.

Searching for workers An hour's drive east in Zapotlanejo, the clothing center of western Mexico, job candidates are in such short supply that Hictor Alvarez, owner of Industrias Espuela de Oro, put auxiliary sewing plants in two villages. He also farms out home work to fill U.S., Asian and European demand for his western-style shirts and slacks. Even farm workers are at a premium. So few local men are available to harvest crops that women and children are moving into the fields, along with migrants from Guerrero, Oaxaca and Chiapas.

"NAFTA showed it's very easy to oversell the speed at which development can happen," said Philip Martin, chairman of Migration Dialogue, an organization of international migration experts.

President-elect Vicente Fox has vowed to stop the labor outflow by creating better-paying jobs at home.

That is a daunting task.

If anything, NAFTA has proven that changing the decades-old pattern of cross-border movement will be more difficult than it once seemed.

"In coming years, the scenario will be radically different. Anything could happen," said Augustmn Escobar, a migration researcher at Guadalajara's CIESAS institute.

Model of prosperity NAFTA's successes and failures are especially vivid in Jalisco, a west-central Mexican state of 6 million best known for its tequila, mariachi music and the flashy horsemanship of its charros. The state's economy was in shambles even before the 1994 peso devaluation and the recession that followed. But in 1995, a newly elected state government -- led by the party of president-elect Fox -- used NAFTA's favorable trade and investment provisions to spur growth.

"We selected the right areas of business and the right way to do it, and our timing was right," said Sergio Garcma de Alba, the state's economic development secretary.

As a result, Jalisco has been transformed into the model of a prosperous, modern, new Mexico.

In the last five years, more than 324,000 jobs were added, and companies keep generating more. The state now creates one of every 10 new positions in Mexico.

U.S. and Asian technology manufacturers, using NAFTA to import machinery and materials duty-free, have turned Guadalajara, a city of 1.6 million people, into Mexico's Silicon Valley.

Huge, flat factories are decked with permanent banners advertising for workers to assemble Motorola cellular phones, Dell computers, Hewlett-Packard printers and other technology gear shipped daily to consumers across North America.

Guadalajara's labor market is so tight that Jabil Circuits of St. Petersburg, Fla., recently decided against expanding there. It will open its next plant in Chihuahua.

Garment manufacturers in Zapotlanejo, a city of 70,000, compete furiously for cutters and sewers for their factories and for sales clerks at the scores of apparel shops that line the city's main streets.

'A better life' Salvador Placincia, 18, is among the many young people turning their backs on this explosion of employment opportunities. "There's lots of jobs around now, but they don't pay much," Placincia said as he milked cows near the rural village of La Joya.

Placincia sewed Wal-Mart garments in Zapotlanejo before quitting to help his father operate the family dairy. The youngest of Candelaria Placincia's 11 children, Salvador Placincia now is waiting for two of five brothers working in the United States to come home for a visit and take him back with them.

The pair, employed at a dairy near Santa Barbara, have delayed the trip because they have heard that the United States soon might grant amnesty to undocumented workers and they do not want to miss a chance -- however remote -- to become legal U.S. residents.

Until the brothers visit home, Placincia continues milking 11 cows twice a day.

"I need him here, but I understand it's a better life up there," said his 70-year-old father. "Here, what you earn in one week doesn't even buy a pair of shoes."

With a long tradition of migration to the United States, La Joya is typical of rural villages in western Mexico.

Despite the economic boom in nearby cities, the region remains so poor that when someone this year stole the three televisions that provide long-distance teaching at the secondary school, classes continued meeting without instruction until a private foundation donated replacements.

In June, 12 students graduated from Telesecundaria Benito Juarez Garcma. Without money to go on to preparatoria -- the equivalent of U.S. high school -- they planned to seek full-time work.

Where would the 15-and 16-year-olds look for jobs?

Nearly all the young men and several of the young women said they would go to the United States, rather than work in the factories or the region's many dairy farms.

They had relatives in California, Texas, Florida, Nebraska and the Carolinas, they said, and would join them to toil in fields, factories and meatpacking plants.

"More than half will go," said teaching assistant Moisis Jiminez. "If the price of milk drops, they'll all go."

Promises to keep As president, Fox's greatest challenge could be to fulfill his pledge to reduce U.S. migration by raising Mexican salaries. A free-market enthusiast, Fox is a former manager of Coca-Cola operations in Mexico and Central America, and head of family ranching, leather and shoe-making businesses. As governor of Guanajuato, he led an economic transformation much like Jalisco has experienced since NAFTA.

These experiences make Fox well-aware of NAFTA's half-filled promises. He speaks of taking the pact a step further by turning North America into a full-fledged common market with more opportunities to let Mexicans work legally in the United States.

He says the arrangement should bring Mexican living standards up to those of Mexico's NAFTA partners, Canada and the United States.

"So long as a worker in Mexico earns $5 per day and a worker in the United States earns $60, immigration problems will continue," Fox said soon after being elected president.

However, low wages are the lure attracting foreign companies to Jalisco and other locations in Mexico.

Guadalajara tech manufacturers pay their assembly workers about $1.60 an hour -- including federally mandated benefits.

Zapotlanejo garment workers are paid less, from $1 to $1.25 an hour.

Minus benefits, take-home pay in Mexico averages $5 per day. That is about the same amount earned per hour under the U.S. federal minimum wage of $5.15. California's minimum wage is $5.75 per hour.

Keeping wages low Guadalajara's high-tech managers are so determined to keep salaries from inching up, said NatSteel's Loh, that they meet monthly to make certain everyone is maintaining the going rate. However, it is uncertain whether wages can remain low if the pool of workers keeps shrinking.

U.S. migration taps a large part of the supply. But the number of job-seekers also is declining due to a major demographic shift. During the last two decades, the number of children per family has dropped to 2.5 from 6.1.

The birth rate is plummeting fastest in areas of highest migration, researcher Escobar said.

"For 15 years, ... we needed emigration to help our people find work," he said. "But at some point in the next five to six years at the latest, we should have a major change in job absorption and labor migration."

The result could trigger the most significant change in Mexico-U.S. migration since shortly after World War I, when the U.S. government let farmers recruit Mexican workers. Migration continued under the bracero program between 1942 and 1964 and was sustained over the following years by Mexico's rapid population growth, government policies that produced rural poverty and a tolerance on both sides of the border for unauthorized migration.

Still, no one predicts that one of the greatest global migrations of modern times will end soon.

Some argue the demographic and economic changes will have minimal effect. They say cross-border flows will increase for two to five decades more.

Others predict the situation today in Jalisco is the precursor of changes that will slow migration by as early as 2005.

"The demographics have changed, there's job creation in Mexico, and the number of low-wage jobs in the United States is static or shrinking," said Migration Dialogue's Martin. "That should make it easier for NAFTA to work its wonders."

Copyright 2000 Union-Tribune Publishing Co. iontrib/mon/news/news_1n31migrate.html

-- K (infosurf@yahoo.com), July 31, 2000