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From May Day to Labor Day, GlobalPost explores the human cost of what's been called a "race to the bottom." The hyper-accelerated movement of capital, jobs and resources from the world's corporations — manufacturing, agriculture and service — to the lowest bidder. In an era of diminished expectations, broken promises and sleight of hand, these are labor stories of governments, employers, unions and workers. 

How Mexico's pro-industry unions undermine workers' rights

US organized labor offers support to stop "race to the bottom."

MEXICO CITY – During a 5.6-magnitude earthquake, Eduardo Vargas rose from his cubicle at the Atento call center in Mexico City and tried to evacuate the swaying building.

He didn’t get far. Vargas said supervisors blocked the exits and ordered panicked Atento employees to keep working.

Although no one at the call center was hurt, the shoddy treatment prompted Vargas and a few dozen co-workers to join the Mexican Telephone Workers Union to press Atento to raise their dollar-per-hour wages and improve working conditions. But to their surprise, they learned that they already belonged to a union.

That’s because when they were hired by Atento, which is owned by the Spanish telecommunications giant Telefonica, they unwittingly signed up for a pro-business union that works in cahoots with the company to suppress wages and maintain a docile labor force.

Under Mexican law, the union with the most members — in this case, the official Atento union — controls contract negotiations. As a result, Vargas and other employees who defected to the more militant Telephone Workers Union had no bargaining power.

“When unions fail to defend workers, everything is lost.”
~Eduardo Vargas, former Atento employee

“When unions fail to defend workers,” Vargas said, “everything is lost.”

The Atento case, which has turned into a cause célèbre for labor activists in the United States and Europe, is a prime example of the power and omnipresence of company unions which help employers in Mexico minimize costs and stand firmly in the way of workers as they try to boost their wages and working conditions. Nearly all unions in Mexico “protect the patron and not the worker,” said Maria Xelhuantzi Lopez, a political science professor at Mexico’s National Autonomous University.

She’s not exaggerating.

About 10 percent of Mexico’s labor force carries union cards but nine out of every 10 members belong to secretive and undemocratic pro-business unions, Xelhuantzi-Lopez said. Thus, she estimates the proportion of Mexican laborers who belong to real unions that fight for their rights at about 1 percent which would represent one of the lowest unionization rates in the world.

In Mexico, sham worker syndicates are known as “protection unions.” Their leaders, who often receive kickbacks, negotiate secret deals with company bosses designed to shield businesses from strikes and worker demands for substantial increases in wages and benefits. These agreements, in turn, are known as protection contracts.

Protection unions and contracts are illegal in the United States. However, about 60 percent of the foreign multinational companies operating in Mexico are US firms and “virtually all of them benefit from protection contracts,” said Robin Alexander, director of international labor affairs for the US-based United Electrical, Radio and Machine Workers union.

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Like Vargas and the other Atento employees, most Mexican workers are unaware they belong to protection unions because these unions don’t collect dues while union leaders have almost no contact with the labor forces they nominally represent.

They also try to hoodwink workers by employing belligerent, power-to-the-people language when, in fact, workers receive the bare minimum, said Carlos de Buen, a Mexico City labor lawyer. For example, if a business is required by law to pay workers two-week bonuses, a protection contract might state: “Under no circumstances shall the employer pay the worker anything less than a two-week bonus.”

According to a recent U.S. State Department report, the abuses are so brazen that at new job sites, companies often sign protection contracts with union leaders before they hire a single worker. 

Race to the bottom

Because they rob Mexican workers of leverage, protection unions depress salaries which have been falling in real terms for the past 30 years, De Buen said. This wage stagnation also hurts American workers by encouraging US factories to relocate south of the border and by depressing Mexican demand for US exports.

“When that happens, workers in both countries get screwed,” Dan Kovalik, a top legal advisor for the United Steelworkers, told GlobalPost.

As a result, Kovalik and other US union activists, many of whom used to view Mexican factory workers as the enemy for taking their jobs, are now offering them support, advice and solidarity as they try to break the stranglehold of protection unions.

For too long, multinationals “have been able to divide us by race, border, language and political orientation, while increasing their profits,” United Auto Workers President Bob King wrote last month in a letter of support to Mexican workers who earn just $16.50 per day at a Honda auto plant and are trying to form an independent union.

“As unionists, we have to figure out how to work together regardless of our national identities,” King wrote. “Otherwise, we’re going to continue competing in a race to the bottom.”

But forming democratic unions can be a long, demoralizing march.

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Since the organizing drive began at Atento following the 2009 earthquake, the government labor board has presided over three elections in which employers chose between the protection union and the independent Telephone Workers Union. But all three votes were marred by irregularities.

In some cases, management refused to release workers from their jobs to cast ballots. Others were blocked from entering voting booths by armed guards or threatened with termination if they opted for the wrong union, according to former Atento employees. Repeated requests by GlobalPost for comment from Atento were ignored.

Today, Atento’s protection union remains in place while activists, like Vargas, have lost their jobs.

“They said it was for low productivity,” said Vargas, an intense 25-year-old who now makes a living selling soda and beer at soccer games. “But everyone knows we were fired for trying to start a new union.”