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Mexico hopes for a better future as the New Year begins, though it is hope mixed with skepticism and for many is tinged by cynicism. December 2012 brought the end of the administration of Felipe Calderón of the National Action Party (PAN) with its bloody war on drugs, economic stagnation, and repeated assaults on the independent labor movement. Given that record of catastrophic failure, the PAN’s presidential candidate Josefina Vázquez Mota didn’t stand a chance in the July 2012 elections. And, though he gained on the front runner during his campaign, Andrés Manuel López Obrador, candidate of the Party of the Democratic Revolution and champion of the left, was defeated a second time in a controversial election that he, his supporters, and many independent observers once again called fraudulent and unfair, as they had in 2006. Enrique Peña Nieto of the Institutional Revolutionary Party (PRI), the party that had run an authoritarian and corrupt one-party regime over for over 70 years until its defeat by Vicente Fox in 2000, yet still with a powerful political machine and backed by the influential media, was elected and the PRI returned to power. Whatever they may think of the election and of the resurgence of the PRI, and many are dubious about both, most Mexicans are happy to put the painful, shameful, and tragic Calderón years behind them.

At the same time—facing a conservative alliance between the PRI and the PAN that succeeded in passing a pro-employer labor law reform before Calderón left office and in passing an anti-worker education reform just after Peña Nieto was sworn in—the independent labor unions, the social movements, and the left political parties are on guard. The progressive forces in the country are especially wary given Peña Nieto’s reputation for heavy-handed repression while governor of the State of Mexico. Many Mexicans are also hopeful for the future as the economy has recently improved, though it is clear that it improved mostly for the very wealth and less for working people and the poor in a society that was always unequal but now sees even greater economic inequality. Looking toward the future there is hope, but it is tentative and tempered by caution.

 Calderón’s Presidency: the Killing Fields

With the legitimacy of his election in question, Calderón sought to win public support by launching a war on drug traffickers. While initially successful in enhancing his image, in the long run the war on drugs destroyed his reputation as it claimed more lives every day. Calderón’s six-year war on drugs caused at least 60,000 deaths—some estimate 120,000—; left 20,000 missing persons and another 5,000 confirmed disappearances; while at least 160,000 fled their homes and communities to escape the slaughter. [1] While initially concentrated in the northern border region, by the end of Calderón’s term drug violence affected virtually every part of Mexico.

Map from The Economist - http://www.economist.com/blogs/graphicdetail/2012/11/mexican-drug-war

“For the first time in Mexico’s six-year war on organised crime, the level of violence seems to have stabilised. Last year saw about 12,400 murders linked to gangs, only slightly more than the 11,600 recorded in the previous year. That is still double the number in 2008.” - Economist

While most of those killed may have been drug dealers and their hired guns, thousands of ordinary Mexicans—farmers and school teachers and health workers and petroleum workers—also suffered murder, kidnapping, and extortion. Men and women, adolescents and children were not spared in slaughter. The war on drugs was accompanied by rampant human rights violations by the military and the police, including murder, rape, torture and illegal detention, with most of the perpetrators never facing trial and seldom receiving punishment. [2] Eighty two Mexican reporters have been assassinated and 18 more disappeared during the Calderón administration (2006-12) [3]]]. In addition there were 41 attacks on Mexican print and broadcast news media. (See chart below [not reproduced here].)

Speaking in November of 2012, Raúl Plascencia Villanueva, president of the Mexican government’s National Commission of Human Rights (CNDH) stated that the Calderón administration was characterized by human rights violations which had increased 500 percent during his term in office. [4] The CNDH has reported that defenders of human rights in Mexico themselves have been victimized with 14 killed between 2005 and 2011, one disappeared, and other suffering threats, violence, or property damage. [5] There were 260 acts of aggression against defenders of human rights in 2012 alone, according to the Human Rights Commission of the Federal District. [6] Defenders of the rights of migrant workers also came under attack according to the Catholic Bishops Council, with one murder, three arbitrary detentions, and 124 other human rights violations between 2004 and 2012. [7] Mexico has not seen violence on this scale since the Mexican Revolution of 1910-1920, which is estimated to have taken one million lives.

Calderón’s war on drugs led to the arrest of some of the top cartel leaders and of some secondary figures, as well as to the deaths of thousands of low level dealers and gunmen, yet the president could not claim to have broken the power of the cartels nor the role of drug trafficking in Mexico. [8] The war was lost in part because the drug cartels succeeded in corrupting top level Mexican police and military officers, even the very generals responsible for prosecuting the drug war. [9] The United States stood by Mexico throughout the drug war, providing through the Merida Initiative (Plan Mérida) hundreds of millions in military assistance. The United Nations condemned Mexico’s failure to investigate the cases of disappeared people and the Mexican Catholic Church called upon Calderón to end the drug war. Most commentators agree that his smashing of the cartels simply led to their fragmentation and the multiplication of drug dealers and turf conflicts among them. As Daniel Hernández wrote in the Los Angeles Times, “Its [the drug war’s] effect was a catastrophic expansion of violence and a crime-solving rate of nearly zero.” Its psychological impact on the society, especially on children, was dreadful. [10]

Yet, as the drug wars went on, little was done to address the cause of the drug trade, which is, of course, the market in the United States. Secretary of State Hilary Rodham Clinton acknowledged the U.S. role in creating both the demand for drugs and in providing arms to Mexican drug traffickers. “Our insatiable demand for illegal drugs fuels the drug trade…Our inability to prevent weapons from being illegally smuggled across the border to arm these criminals causes the [11](11) Former Mexican President Vicente Fox and other Latin American political leaders have called upon the United States to give up the policy of prohibition and to legalize drugs in order put the drug traffickers out of business and to end the violence, but this plea has fallen on deaf ears in the United States. [12]

 The War on Labor

While Calderón’s principal political initiative was the war on drugs, he also conducted a war against organized labor and particularly against independent labor unions. The most high profile attacks were directed against the Mexican Miners and Metal Workers Union (SMMRM) and against the Mexican Electrical Workers Union (SME). Calderón inherited the war against the Mexican Miners Union from the Fox administration, both of the PAN presidents having rallied to support Grupo Mexico and other mining companies in their war against the miners’ union which had under its new leader, Napoleón Gómez Urrutia, become increasingly independent, internationalist, and militant. [13]

The Fox administration brought charges of embezzlement against Gómez Urrutia after he accused the government of “industrial homicide” in the mine disaster at Pasta de Conchos on Feb. 19, 2006, that left 65 miners dead. More important may have been Gómez Urrutia’s attempt to take over leadership of the Congress of Labor (CT), the umbrella organization of Mexico’s “official” unions which generally subordinate themselves to government policies and employer interests. [14] When he took office in December of 2006, Calderón’s administration continued the attempt to persecute the miners’ leader and to weaken the union.

The struggle revolved principally around Local 65 of the huge and historic Cananea mine in the northern state of Sonora. [15] After many labor conflicts and altercations with government authorities, finally on June 6, 2010, Federal police stormed the mine, violently removing miners, their family members and supporters. [16] Despite the Calderón government’s violent attempts to suppress the miners, Gómez Urrutia continued to lead the mine workers from Vancouver, British Columbia, Canada, while the miners continued to used job actions and strikes to win the best contracts in Mexico in mines and steel plants.

Despite the war against them, the national miners’ union remains undefeated, defiant, and determined. And they have won some important victories in the past year. On the legal front, the Second Chamber of the Mexican Supreme Court ruled 3-1 that the Mexican Labor Secretary acted illegally when he withdrew legal recognition from Napoleón Gómez Urrutia, General Secretary of the National Union of Mine, Metal and Steelworkers (Los Mineros), in 2008. This case, which received strong support both nationally and internationally, limits government interference in internal union affairs and will serve as an important precedent for the recognition of independent union leaders in the future. Also last spring, another Mexican court threw out the last criminal charge against Gómez Urrutia, who has lived in Canada with USW support since 2006.

The Electrical Workers’ Fight

Calderón himself initiated the fight against the Mexican Electrical Workers Union (SME) when, on October 11, 2009, he sent Mexican Army troops and police to occupy the installations of the state-owned Mexican Light and Power Company, liquidated the company, and fired 44,000 workers about 40,000 of them union members. [17] When union members engaged in militant protests, some were charged with crimes and imprisoned.

Remarkably, since 2009 some 16,000 SME members have continued to fight through militant protests on the streets, through a legislative initiative, and through both Mexican courts and international venues to force the government to return them to their jobs.

The Mexican Electrical Workers Union (SME) won a major legal victory last October when a Federal Labor Court ruled that President Felipe Calderon’s administration had failed to show that that force majeure required the liquidation of the government-owned Mexican Light and Power Company and the termination of all of its employees. (Force majeure is a legal concept often found in contracts, meaning that some unforeseen development — often a natural disaster or “act of God”— has intervened making it impossible to continue the agreement). Calderón justified the closing of the Light and Power Company because he argued it had become uneconomical, something that the unions and others disputed.

The union’s contract provided that if a company merged or was bought out, that the successor company had to take on the workers. In this case, the Light and Power Company’s facilities had been taken over by the government’s Federal Electrical Commission which now controls virtually all public power generation in the country. So the court ruled that the CFC should return the fired workers to their jobs. Nevertheless, the Federal Labor Board (JFCA) has failed to comply with the court’s decision. The struggle now continues facing Enrique Peña Nieto’s PRI government.

Widespread Attack on Independent Unions

The Calderón administration’s war on the miners and the electrical workers served notice on other unions and workers that they could expect only hostility and aggression from the government.

Examples of ongoing abuses include lack of recognition of independent and democratic unions and their democratically elected leaders; mass firings of workers as a result of the illegal or fraudulent closure of unionized companies; and manipulation of legal and administrative processes for determining union representation and collective bargaining rights and the sudden appearance of charro or “ghost” unions in false representation of workers.

In the past year alone, we have provided coverage struggles involving the violation of workers’ rights, including Flex-N-Gate, a Volkswagen supplier, Arneses y Accesorios de Mexico, a Mexican subsidiary of the auto parts wiring systems and accessories company PKC, the struggle of STUHM (Union of United Honda Workers of Honda Mexico), of miners at the La Platosa Mine in Bermejillo, Durango, as well as the on-going struggles of workers at SANDAK and of pilots, flight attendants and ground workers at Mexicana.

In addition, 2012 has seen the closure of the Caterpillar plant in Puebla as well as the closure of the CAT office, the product of physical and psychological violence directed against its staff.

The combination of the economic crisis with its high unemployment rate and the militantly anti-union administration which did not hesitate to use the Army and the Federal Police against unions and workers, tended to have a chilling effect on the labor movement. While Mexico has many labor marches, demonstrations, and protests, including some short work stoppages, genuine strikes are few. [18]

However, the independent unions and their allies continue to fight back and a few additional positive developments also stand out. Over the course of the past year, the Tri-National Solidarity Alliance, with participation of unions from the US, Canada, Quebec, and Mexico, and with support of national allies and several Global Union Federations have provided solidarity in a significant and serious way, including organizing Days of Action last February, providing on-going support for the struggle of SME and other unions, and during the struggle against labor law reform.

In addition, last summer the FAT won a second, resounding victory in an election against a charro union at an auto-parts plant in Mexico City. It has since settled its second contract.

 The Labor Left: Weaker Than Six Years Ago

The Calderón years left Mexico’s labor left, that is its independent labor unions and democratic currents within the official unions, far weaker than they were six years ago. First, Calderón’s attack on the Mexican Electrical Workers Union (SME) severely weakened the Mexican Union Front (FSM), the coalition of unions and community groups, of which it had been the linchpin. The FSM coalition had also been at the center of the National Front Against Privatization and of many other labor alliances. Second, the National Union of Workers (UNT), Mexico’s independent labor federation, was weakened when its largest member organization of National Union of Social Security Workers (SNTSS) left the federation with its more than 300,000 union members, far larger than any of the UNT’s other unions. And, as mentioned the closing down of the Cananea mine and the virtual elimination of Local 65 of the Miners Union with its thousands of members also represented a blow to organized independent labor in Mexico. The full implications of the new labor “reform” are still far from clear, but there is little doubt that it will work to weaken labor unions, and work to reduce strikes.

Still, important independent unions do continue to organize and to wage a determined opposition to the government’s proposed neoliberal policies. The UNT remains important, not only because of the Mexican Telephone Workers Union (STRM) and the Independent Union of Workers of Autonomous University of Mexico (SITUAM), but also because of role of the Authentic Labor Front (FAT) federation. The National Coordinating Committee of the Mexican Teachers Union (la CNTE) remains the one force in the country with the power to mobilize large numbers of workers not only in marches and protest demonstrations, but also for strikes and militant actions such as blocking highways. And even with the loss of Cananea, the Miners and Metal workers union remains a force in the union movement.

 The Economy: from Stagnation to Modest Growth

Felipe Calderón’s fundamental task was to make Mexican capitalism profitable, a job complicated by the 2008 economic crisis. He oversaw a long period of economic stagnation before economic growth began again in early 2010. (See graph below.) For four years unemployment rose and wages fell and most Mexicans suffered, some going hungry. Like the “lost decade” of the 1980s, the period of the 2000s has also been for most Mexicans another “lost decade.” Last year the Mexican economy grew at a much stronger rate of 3.5 – 4.0 percent and is predicted to grow by 3 to 4 percent next year. [19]

However, as one publication put it: “Under Calderón, real GDP growth will have averaged just 1.5% annually (from 2007 to 2012 inclusive, based on officially forecast growth of about 3.6% this year). That is simply not enough to promote the kind of job generation the country needs, especially given its large young population. Nor has it provided the resources necessary to take care of other vital social needs, including security and education.” [20]

The table shows growth as a percentage rise or fall from the previous year. Overall, Mexican growth during the Calderón term was 2 percent (or less), far below what is needed to create the one million jobs per year needed to meet the needs of the expanding labor force. Consequently, Mexico’s unemployment rate remained high, at over 5.0 percent. (See graph below.) The number would be much higher if ten percent of all Mexicans had not already migrated to the United States to seek work.

Growth of the Informal Sector

At the same time, the informal economy has grown dramatically during the economic recovery. Using a new methodology, the National Institute of Statistics and Geography (INEGI) reported that Mexico’s informal sector now comprises 29.3 million workers, representing 60.1 percent of the total of 48.7 million working people in the country. This is more than double the 14.2 million recorded in the last such survey.

The employers in the informal sector do not pay taxes and workers are not covered by the national health care programs operated by the federal government that cover workers and their families in the private and much of the public sector. Nor are they eligible for pension benefits. Workers in the informal sector are also paid less. On average, formally registered workers earn 38.4 pesos per hour, while workers in the informal sector make only 24.08 pesos per hour.

Wages, Inflation, Poverty

Nominal wages in Mexico have generally been rising substantially, though real wages (when adjusted to reflect their actual purchasing power) has been eroded by an inflation rate of over 4 per cent per year throughout Calderón’s administration. Prices have risen fastest for the common products and services used by working people. Mexico’s National Policy and Development Evaluation Council (Coneval) reported that the basic food basket had increased by almost 30 percent between 2008 and 2012. [21]

Rising prices have put adequate housing, clothing, and food out of the reach of an increasing number of Mexicans. During the Calderón administration, 14.7 million Mexicans joined the ranks of the poor. With a total population of 115 million, it is estimated that 60 million Mexicans live below the poverty line and 21 million live in extreme poverty. [22]

On January 5, the price of regular, premium and diesel fuel increased by the equivalent of four cents per U.S. gallon. According to Frontera NorteSur, “The increase means that Mexican drivers will now pay 10 to 17 percent more for fuel than their U.S. counterparts.” [23]

 Migration: End of an Era?

Throughout the twentieth century, Mexican workers who could not find employment in Mexico migrated to the United States. For decades, millions of Mexicans migrated into the United States and later often returned to their homes in Mexico. However, during the latter half of the twentieth century such migration tended to become permanent emigration. Each year more Mexicans stayed abroad, settling permanently in the United States.

Some have argued that Mexican migration provided a safety valve for the Mexican government and for the nation, reducing the social pressure that otherwise might have led to upheaval. Others have suggested that migration skimmed off the young, ambitious and courageous Mexican workers whose absence left rural towns virtually decimated, robbed Mexico of their talent and energy, and took potential leaders from the unions and social movements.

Now, at least for the moment, the Mexican immigration to the United States, the largest wave of immigration from any single country to America, appears to have stopped and may even have been reversed according to a study by the Pew Research Center.

“As of 2011, some 6.1 million unauthorized Mexican immigrants were living in the U.S., down from a peak of nearly 7 million in 2007,” according to Pew Hispanic Center estimates based on data from the U.S. Census Bureau. “Over the same period, the population of authorized immigrants from Mexico rose modestly, from 5.6 million in 2007 to 5.8 million in 2011.” [24] It is estimated that overall about 11 million Mexicans or ten percent of the country’s total population live in the United States, while there are 29 million Americans of Mexican descent. [25]

The decline in immigration is the result of several factors: the decline of the American economy and with it of housing construction and other job opportunities; greater and more effective border enforcement; higher levels of deportation under President Barack Obama; and danger and death associated with the border crossing. [26] The improved economic situation in Mexico since early 2010 may also have been a factor in dampening migration. While Mexican immigration to the U.S. appears to have declined significantly and may even now show a net loss, history suggests that an improved U.S. economy will lead to a revival of Mexican immigration.

U.S. Immigration Policy Failure

The United States, which is estimated to have some 12 million undocumented immigrants, has seen no significant immigration reform act since the passage of the Immigration Reform and Control Act in 1986. The great immigrant demonstrations of millions in 2006 throughout cities in the United States—the largest social protests in U.S. history—prevented criminalization but failed to win immigration reform. Attempts to pass a Comprehensive Immigration Reform Act supported by President George W. Bush and by leading members of both the Republican and Democratic Parties failed in Congress in 2007. Pro-immigration reform groups then began to focus on the Development, Relief, and Education for Alien Minors (DREAM) Act first introduced in Congress by Dick Durbin (D) and Orin Hatch (R). The Dream Act would have permitted undocumented minors who had been in the country for five years to achieve temporary residence for six years if they either completed two years of military service or four years of college. They would then have been able to pursue permanent residence and U.S. citizenship. Congress also failed to pass the Dream Act.

Under the pressure of the militant immigrant youth movement called “the Dreamers,” and hoping to secure the Latino vote, in mid-June 2012 President Obama issued an executive order providing that the Department of Homeland Security would no longer initiate the deportation of illegal immigrants under the age of thirty and with no serious criminal records who came to the United States before age 16, had lived in the United States for at least five years, and who were in school, were high school graduates or were military veterans in good standing. [27] These young people would also become eligible to obtain work permits. While the Dream Act will affect hundreds of thousands of young immigrants, mostly Mexican, it does not begin to deal with the Mexico to U.S. immigration issue. If and when Mexican immigration revives together with the economy, there will be new stresses on both governments and on migrants themselves.

The 2012 US presidential election demonstrated the power of Latino immigrants and has once again put the issue of comprehensive immigration reform on the agenda in Washington. Meanwhile, in Mexico,pro-immigrant activists are advocating for the reform of Mexico’s immigration law, improved treatment of migrants, especially Central Americans traveling to the United States, and reform or replacement of the National Migration Institute (INM). [28]

 Economic Inequality

The Organization for Economic Cooperation and Development (OECD), made up of 34 nations around the world, recently conducted a study of the growth of economic inequality and found Mexico to be second worst in the world after Chile. (The United States was fourth.) [29] According to the report, “Mexicans have the second highest level of income inequality and the highest level of relative poverty in the OECD (one in every five Mexicans are poor, compared to just above one in ten on average across the OECD) and nearly half of Mexicans find it difficult or very difficult to get by on their current income.” [30]

Still, Mexico proved very good at producing a class of the super-rich. At the top of the Mexican economic pyramid are 11 billionaires led by Carlos Slim Helu, the world’s richest man for the third year in a row [31].(See table below [not reproduced here].)

 Mexican-Based Corporations

While Mexico’s economy has become increasingly integrated into the U.S. economy and may be said to be dominated in some sectors by U.S. corporations, Mexican capital remains very significant. The largest Mexican-based corporations (below, as listed by Forbes) represent hundreds of millions of dollars in investment and many are multinational corporations with investment in other countries as well.

[Table not reproduced here]

Table from Forbes at: http://www.economywatch.com/companies/forbes-list/mexico.html

These Mexican banks and corporations play an important role not only in the economy, but also in setting the country’s political agenda through their ties to the political parties and the government. Grupo Mexico, for example, had the full support of the Calderón administration in its struggle against the Mexican Miners and Metal Workers Union (SNTMMRM) led by Napoleón Gómez Urrutia. Soriana, the department store chain, gave its support to the Institutional Revolutionary Party and the campaign of Enrique Peña Nieto, though it was exonerated by Mexican election officials for having participated in vote-buying.

 U.S. Investment in Mexico

While Mexico has its billionaires and some very large banks and corporations, much investment comes from abroad. Despite both the economic crisis and the violent war on drugs, wealthy individuals, banks and corporations in other countries have continued their investment in the Mexican economy, with U.S. capitalists the largest investors. Mexico has received US$115 billion in the last five years. The U.S. share represents 50 percent of all foreign direct investment (FDI) in Mexico, compared to about 33 percent by European countries. (See chart below.)

Among the American corporations investing in Mexico are: Caterpillar, Coca-Cola, Dupont, General Electric, General Motors, IBM, John Deere, Hewlett-Packard, Lear, Motorola, Navistar, Proctor & Gamble, 3M, and many others. Investment in Mexico remains attractive largely because Mexican wages remain so low in comparison with other countries around the world.

Mexico’s Largest Industries and Corporations Dominated by Foreign Capital

Mexico’s leading industrial sectors as noted by the Secretary of the Economy’s website, mining, aeronautics, automotive, electronics, and food processing, are dominated by foreign capital. The largest of these sectors employ hundreds of thousands of workers such as mining with 322,000 and electronics with 256,000. These highly productive sectors, such as the auto industry, are predominantly foreign companies, such as Nissan, Toyota, Ford, Chrysler, General Motors, Volkswagen, Daimler, and Volvo. (See table below.)

Mexican States Producing Light Vehicles and Parts:

Mexican States Producing Heavy Vehicles

Both tables above from the Mexican Secretary of the Economy at:
http://www.economia.gob.mx/comunidad-negocios/industria-y-comercio/informacion-sectorial/automotriz

In most of these industries, Mexico is among the top four countries in terms of lowest costs of production, principally because of their relatively low wages. During the economic crisis that began in 2008, auto companies in Mexico, like those in the United States, introduced — and Mexican unions by and large accepted — concessions, including deep wage cuts. [32]

Low taxes are also a reason for foreign investment in Mexico. Take the mining industry. Some 279 foreign mining companies operate in Mexico with concessions in 26 of Mexico’s 32 states. Of those companies, 210 are Canadian. Critics argue that the Canadian and other foreign companies are the source of political corruption, social conflicts and environmental damage. The multinational mining companies extracted minerals worth 552 billion pesos (US$43 billion) between 2005 and 2010. [33] They paid taxes of only 1.18 percent. [34]

Recent studies suggest that rising wages in China will continue to make Mexico more competitive as Mexican wages rise more slowly. For example, in the area of electronics, Mexico is the third cheapest country in the world in which to produce electronic equipment. (Table below.)

And Mexican wages are becoming relatively lower than wages in China, making Mexico even more attractive, especially given its location near the American market and the lower shipping costs.

If and when Mexican wages begin to rise more rapidly, it is very possible that the Mexican government will devalue the currency as it has done in the past to make Mexican goods more competitive. Such currency devaluations effectively cut workers’ wages. Responding to a variety of critical, international factors, Mexico devalued its currency in 1976, 1982 and again in 1994, although through the late twentieth and early twenty-first centuries it has permitted the continuous devaluation of the currency through a floating exchange rate.

Table [not reproduced here] at: http://www.wealthwire.com/news/global/4050

This table shows the peso’s value at the beginning of each presidential term (Inicio), at the end (término) and the percentage of the devaluation.

Manufacturing Stagnant

Yet, while the Mexican economy has continued to attract both national and foreign capital, manufacturing, which stands at the heart of the economy, has been stagnant. Mexican manufacturing plants have been working at only 60 percent of their installed capacity and business reports suggest that the sector has been stagnant for a decade. [35]

Maquiladoras Growing

Much of foreign investment and a good deal of Mexican investment continues to go into the maquiladoras, many of them located along the U.S.-Mexico border and one of the regions that suffered most during the last six-years from both the economic downturn and violence. [36] Mexico’s maquiladora program (now called INMEX) has a total of 5,049 plants employing 1.97 million workers. These plants have either no union or unions that cooperate with the Mexican government and private employers to keep wages low. There are virtually no independent labor unions representing workers in these plants.

As reporter Tim Johnson wrote last year, “Some four decades after welcoming foreign assembly plants and factories, known as maquiladoras, Mexico has seen only a trickle of its industrial and factory workers join the ranks of those who even slightly resemble a middle class. Instead, the poverty trap clutches them tightly. Some have earned the same wages for years.” [37]

Walmart: Mexico’s Biggest Employer

The largest private employer in Mexico is the U.S.-based Wal-Mart de México y Centroamérica, majority owned by the privately held Walmart company of the United States. Walmart has 2,783 retail outlets (stores and restaurants)—under the names Walmart, Superama, Suburbia, VIPS, Sam’s Club and Bodega Aurrerá—and employs approximately 240,000 Mexican workers. [38] Walmart has become the largest retailer in Mexico, in large part, as we now know, through bribes paid to government officials as reported by the New York Times:

“The Times’s examination reveals that Wal-Mart de Mexico was not the reluctant victim of a corrupt culture that insisted on bribes as the cost of doing business. Nor did it pay bribes merely to speed up routine approvals. Rather, Wal-Mart de Mexico was an aggressive and creative corrupter, offering large pay-offs to get what the law otherwise prohibited. It used bribes to subvert democratic governance — public votes, open debates, transparent procedures. It used bribes to circumvent regulatory safeguards that protect Mexican citizens from unsafe construction. It used bribes to outflank rivals.” [39]

Chris Tilly of the UCLA Center for Labor Research and Education has described the employment situation of Walmart workers in Mexico in several studies. “Wal-Mart pays wages slightly above the Mexican retail industry average, and offers pay and benefits comparable to its competitors….Many Mexican Wal-Mart stores have union representation, although unions in Mexican retail generally do very little for their members.” [40] In Mexico, Tilly found, “Walmex [now Wal-Mart de Mexico] is not a low-wage employer.” [41]

Unlike the American parent company, Wal-Mart de Mexico has unions, but they do not represent the workers: “As far as I can tell, there is universal union coverage of Wal-Mart employees. However, these union contracts appear to be contratos de protección, ‘protection’ or ‘sweetheart’ contracts that allow Mexico’s corporatist unions, long affiliated with the Institutional Revolutionary Party that governed until 2000, to collect dues while demanding little of the employer—and keeping more militant unions out. With almost no exceptions, Mexican retail union contracts do little more than codify existing labor law. In my retail interviews, company executives remarked that the unions had minimal impact on their operations and policies, and in most companies workers were unaware that they were covered by a union contract!” [42]

Simply describing the high levels of domestic and foreign capital, the great economic inequalities, the low wages, and the poverty of so many makes it clear that the Mexican political system works for Mexican, U.S. and other foreign capital and not for the benefit of the Mexican people.

 The Mexican Election of 2012

The drug war, while the most tragic, was not Calderón’s only failure. The president had hoped to continue the work of his political predecessors from both the PRI and the PAN by privatizing the state energy sector and passing an anti-union labor law reform bill. But, throughout his administration, he faced a legislature divided between the three major parties, and while the PRI and PAN agreed fundamentally on the desire to continue to implement neoliberal policies in Mexico, the PRI—looking forward to the next election—often played the role of opposition, sometimes allying with the left-of-center PRD to thwart the PAN. As described in more detail below, it was not until the last months of his term was Calderón able to push through Congress his anti-worker labor law reform legislation, strengthening the hand of the bosses and weakening the position of the unions.

The lack of a majority in Congress combined with his preoccupation with the drug war meant that Calderón failed miserably in carrying out the agenda of the employer class which his National Action Party has historically represented. It was not surprising that in the 2012 election the capitalist class abandoned the PAN and turned to the PRI, bringing Enrique Peña Nieto to power.

#YoSoy132

As in 2006, criticism of the inappropriate and even illegal role of Mexico’s broadcasting duopoly, Televisa and Azteca, and accusations of fraud on the part of the PRI swirled around the election. Leading the protest was the student movement #YoSoy132 or #IAM132. The movement began when a group of socially-conscious students at the elite, private, Jesuit Ibero-American University in Mexico City protested against Peña Nieto for his record of violent repression of social movements in the State of Mexico where he was governor. When Peña Nieto dismissed his youthful critics as a handful of 131 student protesters, others began to put their names and faces on the social media announcing, “I am 132.”

The movement spread to Mexico’s public university system and beyond, and soon there were almost daily demonstrations throughout the country against the PRI candidate and the corporate media that backed him. Marches in Mexico City drew tens of thousands and in other cities thousands. The independent student movement clearly helped the campaign of leftist Andrés Manuel López Obrador of the Party of the Democratic Revolution, although in the end they failed to carry him to victory. After the election the student movement rapidly declined, though some students are now active in other causes.

In the end, Enrique Peña Nieto of the Institutional Revolutionary Party (PRI) won the Mexican presidential elections with a plurality of 38 percent of the vote, returning to power the party which ruled Mexico as an authoritarian one-party-state for decades. Peña Nieto defeated the left-of-center López Obrador of the Party of the Democratic Revolution (PRD) who got 32 percent of the vote and Josefina Vázquez Mota of the conservative National Action Party (PAN) who received about 26 percent.

López Obrador, who claims to have won the 2006 election, did not accept the election results of 2012 either. Thousands of his supporters marched through Mexico City the day after the election, claiming that their candidate had once again been defrauded of his victory.

The Election Challenge Denied

The election was not entirely free and fair, though that comes as no surprise given the country’s well-deserved reputation for corruption at all levels and the experience of the controversial elections of 1988 and 2006 that several studies suggest were stolen. There is, however, no crisis of legitimacy as López Obrador has suggested. While the Televisa network, representing half the national TV duopoly, unfairly favored Enrique Peña Nieto, and although his party may have spent beyond the legal limits and may have engaged in vote-buying and other electoral fraud, such as inflated ballot counts, the government’s Electoral Tribunal ruled that all of López Obrador’s claims were “insufficient and inconclusive” as well as “vague, generic, and imprecise,” and concluded that such minor irregularities as there may have been would not have affected the outcome of the election which was won by more than three million votes.

Most of the public and most independent observers appear to concur with that decision, recognizing that, contrary to López Obrador’s claims, the PRI could not have carried out vote-buying or fraudulent counting on a scale of millions. The notion that millions of Mexicans, however poor, would have sold their votes for as little as $10 and as much as $50, is not only insulting to the citizenry, but for logistical reasons beyond credibility on such a massive scale.

The charge made by López Obrador and by the student movement #IAm132, that Televisa violated Mexican election law in its overt support for Peña Nieto was no doubt true. Yet the process was really very typical of elections today in much of the world, with big corporations and the news media guiding voters in making choices, usually between two capitalist parties, or in Mexico’s case between three. Even so, unless we are prepared to deny voters any integrity, intelligence or free will in the electoral process, we have to recognize most voters chose to vote for the handsome young candidate of an infamously corrupt party rather than for López Obrador, the white-haired champion of the electoral left, a left also known for corruption and internecine warfare, because they thought the former would better represent them.

While the Mexican people may not whole-heartedly believe in the legitimacy of this election, with their typical cynicism about politicians, parties, and the government, they by and large accept the PRI’s victory. We should also consider that many in Mexico, have historically seen the PRI as both authoritarian, repressive, and corrupt, but also view it as more likely than the PAN to use its power to do something to improve the conditions of the majority. The Mexican people had had their fill of Felipe Calderón and his National Action Party, and, rejecting that party’s candidate, Vázquez Mota, turned to a party they thought would better represent their interests, and to most it seemed that that party was the PRI. The voters may not have recognized the degree to which the old PRI is dead and the new PRI is the party of business.

Not a Return to the Past

The victory of Enrique Peña Nieto, a man notorious for his repression of a poor people’s movement in the town of Atenco when he was governor of the State of Mexico and known as the public face of the country’s most notoriously corrupt party, represents a defeat not only for the left, but for democracy, decency and social justice in Mexico. But it does not represent a return to the old one-party state. Too much has changed in the last several decades to make possible the recreation of the powerful state party of the past. The end of the national economic model, the greater involvement of Mexico in manufacturing for the U.S. and world economy, the sell-off of state industries, the weakening of the industrial unions, the decline in the size of the peasantry, the increase in urbanization, the role of the modern media, and the growth in the power of the rival parties that have actually held power at the national or state level have all undermined the bases of the old political machine.

The PRI, no longer a nationalist state party but now a purely capitalist party, will push a conservative, pro-business agenda—coinciding in large measure with that of the PAN—as has been made amply clear by political developments since the election. At the same time, the PRI will have to deal with two other large political parties, each of which has blocs of voters in the legislature of some significance.

The Mixed Results: The PRD Remains a Force [43]

In the Congress, the PRI and its satellite, the Green Party (PEVM) will have 241 of 500 seats in the lower house, the Chamber of Deputies, while the PAN will have 114 seats, giving the two conservative parties together a majority. The PRD is not by any means irrelevant; on the contrary it has significant political power in Mexico City and in the congress. The PRD candidate for mayor of Mexico City, Miguel Ángel Mancera, a social liberal in the style of his predecessor Marcelo Ebrard, won election with 64% of the vote against 20% for the PRI candidate: A simply smashing victory for the center-left. At the same time, the PRD and its coalition partners, the Workers Party (PT) and the Citizens Movement (MC), made remarkable gains in the lower house, increasing its representatives from 88 to 135. Looked at one way, López Obrador won 31.6 percent of the vote while the PRD’s representatives claimed only 20 percent of congressional lower house seats. But relative to the previous election, López Obrador’s percentage stayed about the same, while the PRD had a 45 percent increase in congressional representatives. Since the election, a few PRD representatives have resigned from that party and joined MORENA, the movement spearheaded by López Obrador that supported his campaign. Since the election MORENA has taken steps to constitute itself as a political party (see more on this below).

Mexico’s 2012 Presidential Election Results: Party Preferences by State

Source: Mexico’s Federal Electoral Institute (IFE). Prepared by CRS Graphics

Senate Composition by Party

Source: For 2009, figures are from the Mexican Senate. For 2012, figures are from IFE. Chart from CRS.

Chamber of Deputies Composition by Party

Source: For 2009, figures are from the Mexican Chamber of Deputies. For 2012, figures are from IFE. Chart by CRS.

The Governorships

At the state level, however, the PRI’s powerful patronage organizations either survived the end of its national rule in 2000 or have been rebuilt since, and they made it the force to be reckoned with. While the PRD won the mayoralty of Mexico City (larger than most states in population) and the governorships of Tabasco and Morelos, it lost the governor’s race in Chiapas, and overall the PRI is now dominant in the states. The PRI holds governorship in 19 states, while the PAN holds 8, and the PRD only four and the Federal District. [44] Most Mexicans have voted at the state level—perhaps because that is where patronage machines provide the most direct and immediate benefits to their political clients—to live under the rule of the PRI. The election results suggest that political power in Mexico has become at best democratically divided among the parties, or more realistically fragmented among the competing parties and politicians. They also suggest that the country remains geographically split between the more prosperous North where the PRI or PAN generally hold power and the poorer South where the PRD does well.

Mexico’s 2012 Gubernatorial Election Results

Source: Mexico’s Federal Electoral Institute (IFE). Prepared by CRS Graphics.

 A Leftist Strategy Tested in the Election

López Obrador’s campaign this time was more moderate than in 2006. He dropped his earlier election motto, “For the good of all, the poor first” substituting for it the vapid slogan “loving republic.” He continued to defend the nationalized petroleum and energy industries, but this time he appealed to business and attempted vainly to charm the media by suggesting that he was a moderate, not a radical. He built as an extension of his own personality his top-down campaign organization, MORENA, which represented a multi-class coalition, though he failed virtually completely to find representation from the banks and corporations, so that it was preponderantly a middle class, working class, and peasant movement. Most of Mexico’s left, excepting the Zapatistas who eschew all electoral activity, joined MORENA (not as organizations but as individuals) and backed López Obrador. MORENA represented a modern Mexican popular front, that is, a bourgeois party with radical rhetoric and working class support.

What about the revolutionary left, or that wing of it which believes in participation in elections but rejects capitalist parties? The Revolutionary Workers Party (PRT), affiliated with the Fourth International, together with some Maoist organizations, worked with the Mexican Electrical Workers Union (SME) and other unions and social movement to create the Political Organization of the People and the Workers (OPT). The idea was that the OPT would avoid the pitfalls of popular front politics, allow workers, leftists, and movement activists to vote for López Obrador for president along with leftist labor candidates on the OPT line. At the same time, the campaign organized by this party would lay the basis for a workers’ party in the future.

After López Obrador, the leading figure on the OPT ticket was the candidate for representative, Martín Esparza, both the elected leader and the most prominent public spokesperson of the electrical workers who had been fighting for their jobs for two years. But he too lost his election. The defeat of Esparza, and of other union officials on the left suggests that there was little popular support for the idea of a workers’ party.

 The New Administration and Its Political Agenda

Mexicans got a preview of what to expect from the new administration of President Enrique Peña Nieto and the Institutional Revolutionary Party in Calderón’s lame duck period between the national elections which took place in July and the swearing in of the new president on Dec. 1, 2012. After having spent almost six years in failed attempts to push forward his political agenda, in mid-November Mexico’s Congress passed a new labor law, the first major labor law reform in decades. The law makes it easier to hire and fire workers and permits out-sourcing and part-time employment, but does not democratize the country’s notoriously authoritarian and corrupt labor unions. Employer organizations and conservative parties argued that the new law would lead to a more vibrant economy and create jobs, while independent unions and left parties asserted that it would be devastating to the Mexican working class.

The law, put forward by out-going President Felipe Calderón and his National Action Party (PAN) and supported by in-coming President Enrique Peña Nieto and his Institutional Revolutionary Party (PRI), represented the culmination of twenty-five years of lobbying by Mexico’s business associations. The Congress of Labor, which represents the majority of Mexico’s labor unions, and which works closely with the PRI, reached an accommodation with the government, generally supporting the labor law reform, so long as the reform did not jeopardize the unions’ control over their industries, members, and dues.

Although some of the worst provisions in the initial proposal that would have clearly violated freedom of association were removed, attempts by the Party of the Democratic Revolution (PRD) to introduce democratic reforms demanded by the country’s independent labor unions failed, blocked by the PRI which controls most of the country’s labor unions. As Alejandra Barrales, a former leader of the flight attendants union and a legislator from the PRD, told the press, “This law is going to affect the rights of young workers to get seniority. It is generating the loss of rights for a whole generation of workers.”

Mexico’s labor federations—both official and independent—have vowed to flood the courts with law suits and left political parties have said that they will continue to do all in their power to keep the new law from taking effect. Héctor Barba, an attorney who represents independent unions, said that the unions will “inundate” the courts with suits seeking injunctions. The Regional Confederation of Mexican Workers (CROM) which is part of the Congress of Labor (CT), the National Union of Workers (UNT), and the Mexican Electrical Workers have all said they will be taking the new law to court. At the same time, the leftist political parties, the PRD, the Workers Party (PT), and the Citizens Movement (MC) said that they will seek relief from the National Human Rights Commission, arguing that the law is unconstitutional.

The unions and leftist parties have indicated that they will also present complaints to the International Labor Organization (ILO), the Organization for Economic Cooperation and Development (OECD) of which Mexico is a member and to the Inter-American Court, as well as under the terms of the North American Free Trade Agreement.

The PRI’s Agenda

Since taking office on Dec. 1, President Enrique Peña Nieto has been aggressively pushing an agenda which is intended to break dramatically with the previous administration. In an attempt to change the direction of the government, to lift the country’s spirits, and to carry forward a conservative (neoliberal) agenda Peña Nieto has placed a series of legislative initiatives on a fast track.

In the first month of his administration the new president:

• Passed a new tax law that will ensure adequate revenues while continuing to protect privileged corporations.

• Pushed forward its proposal for education reform intended to take back control of the education system from the powerful Mexican Teachers Union (el SNTE) (More on this below).

• Made clear its’ own plans to tackle the drug cartels.

• Proposed to extend social security, that is, health coverage to the 60 percent of Mexican workers in the informal economy.

• Proposed to create the nation’s first national old age pension system for all people over 65.

New President Wins Education Reform

In near record time the Mexican Congress approved a new education “reform” intended to reassert government control over the country’s education system, to break the power of the Mexican Teachers Union bureaucracy, and improve the quality of education. At the heart of the new law is a regular teacher evaluation with increased emphasis on merit. The proposed “reform” received support from the ruling Institutional Revolutionary Party (PRI), the conservative National Action party (PAN), and most of the left-of-center Party of the Democratic Revolution (PRD), but not the Mexican Teachers Union (el SNTE), the country’s largest and most powerful union. The law is also opposed by the new Party of National Regeneration (MORENA).

The law received such broad support in large measure because not only the politicians but also so many Mexicans perceive President Elba Esther Gordillo of el SNTE as an entrenched, corrupt, and bureaucratic union which plays an inordinate role in the Secretary of Education (SEP) affairs and in society and politics. Gordillo says her union will challenge the law in the courts and carry out a legal, peaceful resistance campaign against it. The law threatens her and the powerful and notoriously corrupt political machine that she has constructed. The National Coordinating Committee of the Teachers Union (la CNTE), representing progressive rank-and-file teachers, also opposes the new law though for quite different reasons, fearing that it will reduce teachers power and open the door to the privatization of education.

In presenting his legislative proposal, Peña Nieto said that he wanted to reestablish the Mexican government’s role as the leader and director of the country’s education system. He would create, he indicated, a system based on genuine merit. His plan would take teacher hiring out of the hands of the union which now often plays a strong role in hiring decisions.

 MORENA: A New Political Party on the Left

The Movement of National Regeneration (MORENA), which served as the campaign organization of Andrés Manuel López Obrador for president of Mexico in the election held this past summer, is in the process of transforming itself into a new political party on the Mexican left. López Obrador has now brought into existence a new party that will compete with the Party of the Democratic Revolution that put him forward for president in 2006 and 2012. MORENA has adopted a nationalist, democratic, and neoliberal program emphasizing market competition; little distinguishes it from the Party of the Democratic Revolution of which it is an off-spring.

López Obrador told the assembly that this would be a new kind of party, “Without individualism, opportunism, nepotism, cronyism, favoritism, sectarianism, clientelism, or any of those political scars.” The new party would avoid factionalism and cliques, said the former presidential candidate. Members of the new party he said, would not be required to follow a leader’s line, but could freely exercise their consciences and their votes.

Delegates Adopt Programs, Elect President

At the new party’s founding convention held in the Six Year Plan Sports Center in Mexico City, 1,676 party activists elected a 204 member National Council that adopted the party’s statutes, a declaration of principles and an action program. Altogether the National Council is made up of 300 members: the 204 elected at the Congress along with the presidents, general secretaries and organizational secretaries of the 32 states. Also attending the founding Congress were representatives of other left parties and of the governments of Cuba and the United States.

The Congress elected Martí Bartres Guadarrama president of MORENA. Bartres began his career as a student activist in the Communist Party of Mexico (PCM) in 1981 and later in the Unified Socialist Party of Mexico (PSUM), a fusion of the Communists with other left parties. Together with PSUM he became part of the Party of the Democratic Revolution playing a leadership role in the Federal District and in the administration of its mayor López Obrador. Bertha Luján, a former national leader of the Authentic Labor front (FAT) and member of López Obrador’s cabinet when he was Mayor of Mexico City, was elected General Secretary.

The party members present included labor union and peasant activists, prominent intellectuals, human rights activists, and professional politicians who had given up their memberships in other parties to join MORENA. Many of those present had been members of the Party of the Democratic Revolution (PRD).

A Social Liberal Program

While MORENA defines itself as a left party and many of its leaders come out of various socialist organizations, the new party defines itself fundamentally as nationalist and democratic, modernizing and developmental, but nowhere mentions socialism or even social democracy. (See the MORENA Program.)

The new party’s program has a social liberal character, envisioning a strong role for the market, but also a larger role for the state. This can be seen in some of its position on the economy, where MORENA calls for “A new economic model in which the state assumes responsibility for guiding development without extreme interference. Pushing [the development of] productive chains among the private and social sectors, maximizing employment and value added, pushing support for education science and technology. Strengthening the internal economy with just wages and compensation for workers, while promoting union democracy and workers’ right to choose their own unions, without state intervention. A model which in its entirety promotes a strong national economy with greater internal and external competitiveness, where the state promotes the national economy and at the same time balanced and reciprocal foreign commercial relations.”

The Political Organization of the People and the Workers (OPT), a coalition made up of the Mexican Electrical Workers Union (SME) and a variety of social movements and left parties that had supported López Obrador in the presidential election, decided not to work in the new MORENA political party, but rather to continue to build its own organization. (View the OPT Program or click here for a discussion of the OPT by a leader of a Mexican socialist party.)

 The Zapatistas

The Zapatista Army of National Liberation (EZLN), the armed guerrilla group that led the January 1, 1994 Chiapas uprising continues to have a large following among the indigenous, mostly Mayan peoples of that southernmost state. On December 21 in a demonstration of the organization’s continuing strength, an estimated 40,000 Zapatistas marched silently into five Chiapas cities and towns: Ocosingo, San Cristobal de las Casas, Las Margaritas, Comitán and Altamirano. Some of those were urban areas taken over by the Zapatistas in 1994.

In 2006 the Zapatistas organized La Otra Campaña (The Other Campaign), an alliance of leftist groups participating in an anti-capitalist speaking tour, as their alternative to electoral politics. The Other Campaign took the EZLN’s revolutionary message to thousands of people in cities throughout Mexico but ultimately collapsed when Subcomandante Marcos of the EZLN refused to support the protests against election fraud. The EZLN’s sectarian refusal to join others in protesting against the government and the election authorities led it to lose credibility in the wider society, but clearly its support among the indigenous people in its home base in Chiapas remains strong. Still, since the 1994 uprising the EZLN has failed in several attempts to bring its revolutionary, anti-capitalist politics to most of Mexico which is modern, urban, mestizo, and working class.

Guerrillas

While the EZLN is the best known of Mexico’s guerrilla groups—and it is a guerrilla group that has not been involved in combat since 1994—a number of other guerrilla groups are believed to exist, though it is difficult to determine how many, how large, or how significant they are. Several groups maintain web pages, make political pronouncements, and issues press releases, though in recent years there have been few actual guerrilla military actions. [45]

Conclusion

The Mexican labor left and the political left will no doubt face enormous challenges in dealing with the new president Enrique Peña Nieto and the Institutional Revolutionary Party (PRI), but as has been made clear in the last six years, there is no shortage of courage and creativity in Mexican society.

Dan La Botz

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