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Bordering on Exploitation

Nogales, Sonora
Virginia's a bad girl, and she's good at it. Eighteen years old, with a nightclub walk that purrs. Long, auburn hair. Tall and sleek, with cinnamon-sprinkled skin.

She could be a model if she weren't a factory worker.
It's Friday night. Party time. Virginia clocked out two hours ago, cashed her 450 peso ($53) weekly paycheck, and went straight to Coco Loco (Crazy Coconut).

A downtown discotheque two blocks from the border, Coco Loco is the club of choice for hundreds of young Nogales plant workers with a taste for sex, cocaine and bass-heavy Miami techno music.

The sun's still up, but Virginia's dressed for midnight--tight, black designer jeans and a black lace bra under a creamy, sheer silk blouse. She sips her beer and writhes to the music.

Swirling in the strobe lights, dancers grind and grope beneath Canadian, Mexican and American flags, tacked together at the corners.

Every week, Virginia comes here for the payday blowout. Factory workers get into Coco Loco free on Fridays, and there's a frenzy on the sidewalk outside, where security guards in black fatigues check employee IDs and frisk for weapons.

Inside, the anxious throng ascends a narrow staircase, leaving another 48-hour week on the assembly line behind. Lubricating the steamy melange are drinks with names such as Slippery Nipple, Sex Drive and Flaming Doctor Pepper for 15 pesos ($1.75) a pop. Beer is 40 pesos ($4.70) for an iced bucket of seven, 10-ounce Tecate bottles.

Behind the men's-room door, a cluster of vatos dressed for a hip-hop video--baggy jeans, shades, Tommy Hilfiger pullovers--snort cocaine by the sink. The floor is littered with used coke bindles.

Most Coco Loco patrons work in American-owned factories called maquiladoras. They earn about $1 an hour for mind-numbing labor.

Tonight, they're wearing expensive urban costumery and doing expensive things. Tomorrow they'll wake up in cramped apartments or squatter shacks, a day or two's wages gone.

Virginia moved to Nogales in March 1997 from Sinaloa, 700 kilometers to the south. There was nothing to do there, she complains. No jobs. No fun. The word in Sinaloa was, Nogales had both. The word was right.

Two days after she got off the bus, Virginia was hired by Milotec, a maquiladora owned by Tucson-based Atronix Inc. For eight months, she assembled computer cables, earning 315 pesos ($37) a week. Now, she works in quality control, and makes 450 weekly.

What does she spend her money on?
Virginia purses her lips, thinking. Well, first there's rent, 600 pesos ($71) a month for a one-bedroom apartment, split four ways with three other girls from Milotec.

Also, she sends money home to her mother and spends a lot on makeup and clothes.

And where does any left over go?
Virginia stretches her arms up, Egyptian style. "ACoco Loco!"

You needn't cross an ocean to find a Nike-style cheap-labor factory--there are 97 of them in Nogales, Sonora, just a fast, two-hour drive from downtown Phoenix.

The 3,115-kilometer line that divides the United States and Mexico is the only contiguous border on Earth separating a First World nation and a developing one.

Multinational corporations from Asia, Europe and North America are taking advantage of that proximity.

Fueled by the North American Free Trade Agreement and the crash of Mexico's currency, the maquiladora business is flourishing. One million Mexicans work in the foreign-owned, export-manufacturing plants, up from 600,000 in 1994.

Mexico's government--eager to retrofit the nation's economy into the bustling global marketplace--opens the door for maquilas with friendly legislation and lax enforcement of environmental and labor regulations.

There are roughly 3,000 maquiladoras spread throughout Mexico, mostly in border towns, churning out everything from fly swatters to cell phones, artificial-heart valves to jet-engine parts.

Ninety-eight percent of the televisions purchased in the United States last year were made in maquiladoras (the name comes from the portion of grain, or "maquila," Mexican millers keep as a processing fee).

The factories and the slums they spawn are an easy target for critics of the system. Most of the naysayers are American.

Environmentalists accuse the maquiladoras of turning the border into a toxic cesspool that has severe health consequences for people on both sides of the line. (See accompanying story on page 34.)

Organized labor leaders claim the maquilas are driving down wages for American factory workers, shifting jobs to Mexico, and weakening unions. (See accompanying story on page 26.)

Social activists accuse U.S. industrialists and Mexican politicians of virtually enslaving a vast class of poor, desperate Mexicans who toil for a pittance, making the tools and toys of the modern world--products few of them can afford that will be sold in places they can't go.  

"It's bordering on criminal, and certainly it's morally abhorrent," says Larry Weiss, a board member of the San Diego-based Coalition for Justice in the Maquiladoras.

In Nogales, 32,000 workers put in long hours at multimillion-dollar, high-tech factories, yet most of them live crammed into shanties made of materials scavenged from maquila shipping yards. Many have no access to safe drinking water. Raw sewage trickles past their front doors.

Mexico's border economy is tethered to the U.S. The prices maquila workers pay for rent, food, fuel, clothes and other necessities are nearly as high across the border in Arizona.

"They effectively have no rights, live perpetually in poverty, and work for wages that you or I would consider laughable," says Weiss.

"The whole situation is so absurd it's surreal."
That may be the case.
But so's this: Most of the workers aren't complaining. If they're downtrodden, someone forgot to tell them.

"I like my job," Virginia says, a bit incredulous about being asked. "I have friends there. We talk and have fun. It's okay."

The confounding truth is this: Most poor, desperate maquila workers would be even poorer, and more desperate, if it weren't for the maquiladoras.

That's how it is in Mexico.
Barring armed revolution, Virginia's future--the future of most young Mexicans, really--is bound to the development of Mexico's industrial base.

"Mexico needs to keep growing fast," says Jesus Reyes-Heroles, the country's ambassador to the U.S. "That's the answer."

For whom?
Will the maquila workers stay in their shanties, cogs in a machine employed to pay off massive foreign debts and to increase profits for multinational companies? Or will they break into the middle class as the maquiladora industry continues to expand and become more sophisticated?

For now, maquila workers are savoring their first taste of disposable income, even if it is just a morsel. In frontier boom towns like Nogales, the quest for the American dream--and American culture--flowers like a saguaro in summer bloom.

Like Virginia, most of the maquila workers in Nogales--or Tijuana, or Ciudad Juarez--didn't grow up near the border.

They're from deeper south, Mexico's interior, where the ejido communal farming culture is dying as machines replace people in the fields.

Simultaneously pushed from their villages by grueling economic depression and pulled to the border by the lure of city life and the promise of a steady paycheck, no matter how meager, thousands of workers migrate to the border, where the maquilas are always hiring.

Some hop jobs from one maquila to another before settling in for the long haul. Some spend much of their money on American clothes and Coco Loco. Others work to save a grubstake, then jump the border. Some advance incrementally up the maquila job ladder, into technical and managerial positions. Some find employment outside the factories or carve out a niche on the black market. A few go to work for the narcos. Many bounce back and forth between their hometown and the factories.

You'd be hard-pressed to find an obrero (laborer) in Nogales who, upon learning her mother is sick back home in Sinaloa, wouldn't walk out of a factory, midshift, safe in the knowledge she'll easily find another maquila job with similar pay when she comes back.

That's the convenient synergy at work between a maquila and the obreros it hires--both view the other as expendable.

The obreros know there will always be other maquilas, and the maquila bosses know there will always be another obrero. As a result, the maquilas pay just enough to put warm bodies on the line, and not a peso more.

"The maquiladora industry is a bottom-line industry," says Thayne Hardy, an American who oversees four Nogales plants. "And the bottom line is, we don't have to double our wages, so we don't."

"There's no way I can get my labor costs down to $1 an hour," groused an American executive pictured in a trade magazine advertisement this year. Below his photograph, the Yucatan government promised low wages and workers willing to accept them. "When the U.S. is too expensive and the Far East is too far. Yes, yes you can, in Yucatan."

--New York Times, August 15, 1993

The only touch of luxury to Alma's pallet shack in Los Encinos, a Nogales squatters' colony, is the white lace curtain that hangs in the doorway.

The packed-dirt floor is covered with carpet scraps. The walls are makeshift--packing crates and cardboard, a large hole patched with a plastic Batman kite. The uneven roof is made from corrugated tin sheets, attached with long, rusty nails whose sharp ends protrude into the room like miniature stalactites.

It's mid-May, but a Christmas stocking hangs from one wall, next to a teakettle-shaped silver clock. A rickety set of shelves in one corner holds a toaster oven, a set of Santa Claus glasses and a Panasonic boom box. Facing the entrance is a painting of the Virgin Mary, directly above an altar decorated with red and gold strands of tinsel, a small plastic squirrel, a vase holding dried white roses, and a balloon on a stick that reads "Wild Thing, You Make My Heart Sing," in spooling, cursive letters.  

Alma is a thin, feisty woman whose quick laugh sharply contrasts a face that's aged too fast. A photograph, taken when she arrived in Nogales in January 1987 to work in the maquilas, shows a pretty young woman who looks to be in her mid-20s. Eleven years later, wrinkles are etched into a face that looks 55 in middle-class American years.

Dressed in blue sweat pants and a Pacific Coast Highway sweat shirt, Alma chain-smokes Fiesta cigarettes.

"This colonia is like a small town. I make food, I bring it to my neighbor," says Alma, who has lived in Los Encinos with her daughter, Eva, for 10 years. "My neighbors suffer, I suffer with them."

Los Encinos, while hardly Nogales' worst slum, is still a place where suffering flows through the streets like the threads of sewage that run down its hillside. Skinny children and bony dogs roam the colonia's winding, dirt roads.

Located above the Sanchez maquiladora park, where many of its residents work, Los Encinos is home to roughly 1,000 families crammed into half that many wood shacks or concrete-block huts.

Most of the structures are perpetual works in progress, with half-finished second, third or fourth rooms built piecemeal as money for material allows. The result is a bizarre array of haphazard designs. The homes of Los Encinos are hot in the summer and cold in the winter.

Nogales is nearly 4,000 feet above sea level, and it can snow from October through March. Most of the colonia homes are warmed with unreliable propane heaters. No one keeps official numbers, but during the cold months, tragedy stalks the hill. Whole families have died in fires and gas poisonings.

"Every winter, some people go to sleep, they stay sleeping forever," Alma says.

Her shack is not without conveniences, including a crusty four-burner, gas stove with oven and a 30-year-old electric refrigerator. Outside, a 1960s-vintage washing machine is hooked to pipes that deliver water to the colonia a couple hours a day.

The small front yard is put to practical use. A dirt walkway lined with stones runs next to a garden of herbs, medicinal plants and vegetables, and Alma excitedly shows off new growth to friends visiting from her hometown.

Alma came to Nogales from Bacobampo, a village in southern Sonora, where she worked the fields as a teenager. She left to get away from her abusive, alcoholic husband.

"I felt there was no life to be found there for my children. In my town, we heard, 'Come to Nogales. There's a lot of work there.'"

Alma sold a propane stove for 20 pesos. Her bus ticket to Nogales cost 18. She ate fried gristle for two weeks, until she got her first maquila paycheck, which she spent on food and a bus ticket for her youngest daughter, Eva, to join her.

She worked in the factories for several years before quitting. Now, Alma earns money baby-sitting neighborhood children while their parents work in the maquilas, her shack a de facto day-care center. Her new husband works in a printing plant, earning about 420 pesos ($49.40) a week.

"If we didn't live on the border, we would have a much harder time," Alma says.

Like many children of the slums, Eva dropped out of school early, halfway through seventh grade.

"Books were very expensive, and I was worried about all the drugs in school," Alma says.

She went to work in the maquilas when she was 14, sewing tuxedos. The minimum working age in Mexico is supposed to be 16, with a parent's permission. Eva says she just wrote "18" on her application.

She really turns 18 this August, by which time she'll have been married a month. The church wedding--an extravagance for a Los Encinos woman--was scheduled for July 10. Alma proudly points to a decorative wedding cake top, already purchased and enshrined in a plastic box.

Eva met her fiance, Gilberto, 22, on the production line at Delta Electronics, where they both worked building silicone circuit boards. Her job was to realign tiny transistors and chips by hand once the parts were stuck in place. She was paid 32 pesos a day, plus five pesos a day for lunch and eight pesos for breakfast, plus attendance and punctuality bonuses. All together it came to 410 pesos (about $48) for a 48-hour week.  

It was a good job, Eva says, but she quit in early May because she developed a strange rash on her face and arms.

"All the little pieces had some kind of chemical powder on them," she says. "It was silvery. When I went outside, I could see it shining on my hands in the sunlight, and wherever I touched my face, I got a rash."

Two weeks after she quit Delta, the red bumps and blotches remain visible. Eva says several friends at Delta got the same rash and also quit. Her older sister still works at the plant. "Her eyes are red all the time, and she gets a lot of snot," she says. "Also, she has the spots."

After she gets married, Eva says, she'll move in with her husband, who's building them a new home in colonia Las Torres, a squatters' settlement two hills over. Gilberto recently factory-hopped from Delta to Chamberlaine, where he works as a quality-control inspector--one step up the maquila food chain.

Alma reaches into an accordion folder and produces a copy of the form Chamberlaine employees fill out to ask the factory's managers for spare wood packing crates--the building material of choice for maquila workers' starter homes.

Even with the free wood, Eva says the land and house will probably cost 13,000 pesos ($1,530). The house is more than half-built, but the bride-to-be has yet to visit the site. She says she's excited to see it, but can wait for the wedding night. Then she blushes and starts brushing her hair in a mirror. Gilberto's coming by after work.

Asked of her hopes for her daughter's future, Alma answers quickly. "That of all poor Mexicans. You work, you eat."

She stubs out her Fiesta.
"Mexico is one big lament."

Nogales has the aura of a refugee camp.
Since 1990, the maquila work force has nearly quadrupled, and its infrastructure has collapsed under the pressure. No one knows for sure how many people live in Nogales, but most guesses land between 250,000 and 300,000.

The housing situation is hellish.
Again, no one has precise numbers, but Nogales Chamber of Commerce Director Francisco J. Trujillo says the city needs 10,000 to 30,000 more houses right now.

And it's getting worse. More maquilas set up shop in Nogales every month, attracting another wave of workers from Mexico's impoverished countryside, trapping the city in a perpetual cycle of destitution.

Mayor Wenceslao Cota Montoya concedes Nogales cannot finance infrastructure development.

"Our growth has outstripped our ability to provide services," he says.
It's the same story up and down the border. Nogales, Tijuana, Matamoros, Ciudad Juarez and a dozen smaller border towns are all besieged by too many people, no urban planning and little assistance from the government or the maquiladora industry.

While Mexican leaders have gone to great lengths to nurture and protect the maquiladora industry, they have all but ignored the needs of the people who work in the plants. Electricity, water pipes and roads have routinely been extended to accommodate new industrial parks, with little concern for the social and environmental cost of the maquila fervor.

Tax revenue generated by maquilas goes directly into the national treasury in Mexico City, and very little of it comes back to the border. As a result, local governments are hobbled with overwhelming housing and health problems, including a nearly complete lack of waste disposal and wastewater treatment facilities.

"Like all maquilas, we pay a 5 percent federal housing tax on every worker's salary," says Nogales maquila boss Thayne Hardy. "And it's frustrating to us maquila managers, because we're paying all these millions of dollars to Mexico City, and very little of it comes back to benefit our workers."

Maquiladoras pay negligible local taxes, and voluntary contributions are paltry.

Hardy says it was all he could do to convince his superiors in Sydney, New York, to donate $10,000 a year to Project Esperanza (Hope), a charitable drive organized by the Maquiladora Association of Sonora.

"It's hard to get corporate behind any sort of housing or social program, when we already pay more than minimum wage here." Minimum wages vary in Mexico, depending on the job. For factory workers, it's around 35 pesos ($4.12) a day.

Asked what the maquiladoras have done for Nogales besides generating jobs, Luis Peralta, director of the local maquila association, proudly turns over a two-page list, "Specific Projects Accomplished Since 1988."

It describes 24 charity projects--ranging from a high of $83,450 for "building 9 Basketball/Volleyball courts in various sites of Nogales" to $700 for "donation of paint for trash containers." The projects total $373,760--a little more than $400 a year for each of the 90 maquilas in the association.  

"The maquilas, we're not perfect, and no, we're not doing enough," says Hardy. "But we're also not in the business of social work."

Thousands of homeless people wander Nogales' streets with nothing to do, no place to go. Trouble soon follows.

Hundreds of youth have rejected the industrial culture and turned to life underground. They live by day in a drainage tunnel that cuts beneath the city, under the border and into Nogales, Arizona.

Like vampires, the tunnel children emerge at night to wander the streets, stealing and robbing to survive. Many stay intoxicated, huffing paint, gasoline and industrial solvents.

Maria Valenzuela has devoted a decade to helping the tunnel children, first as a paid social worker and now as a volunteer. Born, raised and now living with her family in the same middle-class Nogales, Sonora, home, Valenzuela has seen the small, closely knit town of her youth transformed by the maquilas into an urban quagmire.

"Nogales was just one family," she says sitting at the kitchen table in her comfortable home. "We didn't have as much violence, and delinquency. Then, murder was a big deal. Now, it occurs all the time."

A knock on the side door interrupts the conversation. Valenzuela excitedly places a small gift-wrapped box on the table before welcoming home Lupita, a beautiful 15-year-old with thick black hair and wide, round eyes. Lupita is holding her toddler daughter, who wears a pink dress and new black shoes.

It's May 1, Dia de los Ninos, and Lupita, wearing a flowered sun dress, her face accented with makeup, takes a seat at the table. She's joined by a 13-year-old boy, who smiles but says nothing, his eyelids quivering. He was blinded by an antibiotic reaction when he was a young child.

Valenzuela hands the gift to the little girl, as the day belongs to her. She opens the box to find a blond Barbie doll, with two accessories--a pocketbook and a comb. She smiles. Valenzuela beams.

Not long ago, Lupita was a tunnel kid. Maria pulled her from the trench and got her started in a new life. Now, Lupita sells cosmetics door-to-door. Her life has hope.

It's one victory. But, Valenzuela says, many more children remain lost in Nogales.

It's a vicious circle, she explains. Since many of the maquila workers came from elsewhere, links to and support from extended family are tenuous. The low pay at maquilas frequently requires both parents to work. The children are left alone, raised by each other and the television.

"The television is causing a lot of problems," she says. "A lot of violence has been brought into the community."

Valenzuela and her husband, a welder who makes custom furniture, have traveled extensively in the United States, occasionally visiting family in Ohio. Their 25-year-old daughter speaks fluent English--learned watching Sesame Street--and works in a local bank. Valenzuela believes the social decay in Nogales is not unique.

"All these problems are worldwide. It's a worldwide crisis we live in," she says.

The maquilas, which have largely transformed Nogales into a labor camp, must play a much greater role in the community, Valenzuela says. One place they could start, she suggests, is to build schools in the squatter settlements where many of their workers live.

Higher wages are also necessary. Valenzuela says a family needs at least 2,000 pesos ($235) a week to lead a middle-class existence. Most maquila workers make one-fourth that or less.

More schools, higher wages and better housing are likely to result only from political reform. Mexico's ruling party, the PRI, is being squeezed between the Zapatista rebels in the south and the rise of opposition parties in Mexico City and the border states.

"We are looking for a leader of the people," Valenzuela says.

Alberto Morackis was a leader 18 years ago. He organized workers in several Nogales maquilas and led strikes that rocked the community. But the movement was crushed by 1982, and Morackis blacklisted from the maquilas.

Bearded and one of the few openly gay men in Nogales, Morackis sips a beer at Salon Regis, a Nogales bar near the border. He recalls the excitement of the labor movement that shut down several factories--and the disappointment that followed.

"There's been nothing since 1982," he says.
Morackis turned to electoral politics, and snagged a seat on the Nogales city council during the 1980s. Now, he's turned his energy to art, painting street murals throughout the city with a friend whose sketchbook bears a Zapatista sticker.  

Morackis' black tee shirt reads Raices de Resistencia (roots of resistance), commemorating Collectividad Frontera II, a demonstration last year in which activists painted murals on the steel border wall.

Morackis keeps close tabs on the maquila culture, and delivers an evenhanded assessment: The maquilas have brought a mixture of liberation and oppression.

For the first time, minorities, particularly women and gays, have found a place where they can work, earn money and express themselves free from Mexico's traditional, restrictive norms.

"People from inside Mexico see border cities like places in the desert, mirages," Morackis says. "In many cases, the move from the south is making people more free. For the boys, it's better to work inside the factories instead of the fields for less money. For the girls, it's often better to come here than stay in the house with their father or their husband. They all get to be with other young people in American clothes."

At the same time, Morackis says, most maquila workers live only for the moment. "They don't see they are going to spend their lives in the factory."

In the past decade, American activists have tried to raise international awareness of the plight of maquila workers. Morackis knows many of the activists.

"They're sweet and sentimental," he says.
"They come and say, 'Oh, poor people. Look at how they live. We must help them.'"

A Tucson-based activist group, Border-Links, organizes "homestays" where American students and others spend a night or two in a maquila worker's squatter shack.

Morackis says slumber parties in Los Encinos don't do much to improve the lives of maquila workers and their community.

"What is needed is more contact with [U.S.] union workers in companies affiliated with maquilas, so workers will get organized."

Until then, Morackis sees little hope that the lot of the maquila worker will drastically improve.

"Nothing is going to change."

The homeless workers of Nogales can't wait for politicians or union leaders to come to their rescue. They find shelter wherever they can.

A few maquila employees, most of them new arrivals, inhabit abandoned boxcars strung along a railroad workyard, walking distance from the largest industrial park in Nogales.

While they work, their children play in the rocky yard among black ants and broken glass. Their playground is wedged between a precipitous drop into the feces-laden Nogales Wash, and a set of active railroad tracks, where trains lumber past and foul the air with oily smoke.

Others launch "land invasions." The term conjures images of peasants with pitchforks storming the baron's hunting grounds. In fact, the arrangement is less glamorous but equally effective.

Owners of vacant land cut dirt roads, etch property lines into the ground with lime or paint, and spread the word. Homeless workers cut deals to buy the land on a payment plan and start pounding together their pop-up houses.

There's no planning and zoning process. No public hearings. No credit check. It just happens.

Some homes go up in a day, others are more elaborate and use durable materials such as block or adobe. Since building codes are not a factor, any plan is a good plan.

Before long, a new colonia is in the making, and the city of Nogales falls further behind.

The owner of the development, meanwhile, has increased the value of his adjacent land, which will later be sold to another wave of invaders.

As more people settle the colonia, their political power increases and eventually they convince the city to bring out basic utilities.

But that can take a long time.
After a decade, Los Encinos has electricity and water--it isn't safe to drink, and often doesn't flow--but no sewage lines.

Like most early land invasions, Los Encinos is close to downtown Nogales, built on undesirable, hilly terrain that otherwise would have gone undeveloped.

As Nogales continues to boom, new settlements are spreading outside the city's center. Colonia Colosio, where lots went up for grabs this spring, is a suburban squatter's paradise.

Named after the slain presidential candidate who hailed from the Sonoran city Magdalena, Colosio sprawls across a wooded area east of downtown. Its quiet, shaded, spacious lots are a far cry from the rat-pack of Los Encinos. The lots sell for about 12,750 pesos ($1,500) each.

The largest structure in Colosio so far is a block cockfighting arena. A small store stocked with snacks and colas is open for business, but half the lots are empty except for painted rocks that mark them as available, or hand-lettered signs--"Numero 1184. Familia Espinosa"--that claim the parcel.

Ten of the few houses that seem complete were built by the same man, Rodrigo Alvarez, a 20-year-old former Sinaloan farm laborer who moved to Nogales two years ago. Alvarez worked in a maquila for eight months, soldering circuit boards, before he quit and went to work for himself.  

He and a friend buy scrap maquila packing crates for $1 apiece on the black market, then use hammers, an electric saw and scavenged nails to convert them into prefab wall and ceiling modules they resell for $2.50 each to invading homebuilders.

Alvarez's home-based business received a shot in the arm from the Colosio development, where he also builds block houses, for 200 pesos ($23.50) a day--four times what he made in the maquila.

There are no water, gas, electric or sewer lines in Colosio. The closest thing to a utility is an upscale community outhouse that features composting toilets. Pickup trucks deliver drinking water in five-gallon plastic containers, which cost 10 pesos ($1.18) each, plus a 50 peso ($5.88) desposit per container.

Alvarez recently built his parents a pallet home in Colosio on a choice plot he purchased for them, then started in on his own, next door.

A bright Tuesday afternoon in mid-June found him working on its scrap wood frame. He was assisted by an old family friend from Sinaloa who sawed lengths of wire, holding the coil against a block of wood with the stump of his left arm, which he lost above the elbow in a farming accident long ago.

The men quit for the day around five and caught a ride in a pickup back to Los Encinos, to a concrete block house where Alvarez has lived since he arrived in Nogales.

He shares the living quarters with several unrelated adults and children. Most days, he works on his pallets in the front yard while another man shucks corn in the bedroom to make a snack of corn, mayonnaise and spices that members of the household sell on the streets.

Life's better on the border, Alvarez says.
"If I return home, there's no work. And if there is work, it will kill you," he says. "Here, there are more ways to make a living and move ahead."

Rather than raise wages, there are some things you can do to help, such as setting up a clothing exchange in the plant. . . . Buy some bulk food items such as flour, beans, potatoes, etc. and distribute them among your employees.

--editorial in Twin Plant News, bible of the maquiladora industry, January 1987

Thayne Hardy leans back from his desk and puts one hand over his heart.
"I hate to see our workers living on the hillsides as much as the next guy," he says.

"But what am I supposed to do about it? Build them houses? Double their salary? I'd just be fired and replaced."

Hardy, 32, quarterbacks four Nogales maquiladoras for Amphenol Interconnect Products Corp., a Fortune 500 company.

"You know, the guys at the corporate office back in New York, they don't get to know the workers, and they don't live down here," he says. "So they don't see the poverty the same way I do."

Neither do the workers Hardy seems to pity.
"One thing that always gets me about Mexico is, the workers here are some of the happiest in the world. They may live in a shack on a hill, but they smile 100 times more than I do during the day. They're always laughing and joking. They come up to me all the time and say, 'How come you're so sad, Thayne?' and I say, 'Well, I feel okay,' and they say, 'You Americans don't smile enough. You worry too much.'"

Hardy bows his head, as if meditating.
"This from the people who live in shacks."
Like many American maquila executives who work in Nogales, Hardy lives in Green Valley, Arizona, a planned retirement golf course community between Nogales and Tucson.

The maquilas Hardy runs are in the San Ramon Industrial Park, 6.5 kilometers south of the border. Amphenol's low-cost, foreign labor division has 850 Mexican employees who manufacture wire connectors and state-of-the-art cable assemblies.

Big deal?
Maybe so, if you consider that your ass may literally be riding on their production line.

Amphenol's maquilas make components for semi-truck brakes, as well as critical parts for commercial jets. Its clients include most of the big-league airframe manufacturers and defense contractors. Hardy's office is decorated with a poster of the view from a Boeing 737 cockpit.

A native of Delta, Utah, who graduated from the American Graduate School of International Management (Thunderbird) in Glendale seven years ago, Hardy has a cherubic face and a dash of gray above each temple. He talks over the rumble of machinery on the factory floor, one level down.  

"The work in this manufacturing arena is so dynamic, it's addictive," he says. "I recently had to spend a month up in the corporate offices in a cubicle, and it about drove me nuts. 'Gosh darnit,' I thought, 'I really miss the action of the plants.'"

Amphenol opened its first Nogales factory in 1987. Hardy says that by 1993 the company had two Nogales factories with 250 employees. Since then, its maquila payroll has swelled more than threefold. Plant four went operational in late May.

Hardy says the maquiladora industry caught fire in 1994, following passage of NAFTA and the devaluation of the Mexican peso, which slashed the already low cost of Mexican labor by 30 percent.

"Because of those two factors, new companies came down, and companies that were already here, like us, expanded at just a phenomenal rate."

Hardy got into the maquila business in 1992. Before he went to work for Amphenol, he managed a maquila for General Electric in Juarez.

"My mom, she still lives in Delta, Utah, and she can hardly pronounce maquiladora," Hardy says. "She tells the townsfolk, 'Thayne, he's working in Mexico,' and they go, 'Oh, I'm sorry,' thinking, 'Oh, too bad Thayne couldn't find a good job in the U.S., and has to run a sweatshop.'"

Hardy chuckles, bemused.
"People have a lot of misconceptions about what I do for a living. I don't run a sweatshop. I'm a low-cost labor operator who manages a modern manufacturing facility."

Some would call that a matter of semantics, but in reality, the worst sweatshops in Mexico are the Mexican-owned factories, notorious for horrid working conditions. The fabricas, most of which are located in central Mexico, employ far more workers than maquilas, 2.6 million last year, and pay less.

There's nothing shocking about the interior of Amphenol's plant three. No locked doors. No guns held to anyone's head. Just 300 obreros, dressed in street clothes, manning shiny blue and gray machines. Some look profoundly bored. Others clown around--bumping one another's seats and cracking jokes.

Every day, semi-trucks full of raw parts drive up to a warehouse on one side of the 50,000-square-foot building, and semi-trucks full of assembled wire connectors leave from a shipping bay on the other.

"We've got trucks at both ends, all the time," says plant manager John MacDonald during a recent tour. "And that's the way we like it."

MacDonald points to a woman sitting before a machine that stamps numbers on small, black segments of silicone cylinders. He says she performs the same process 800 to 1,000 times an hour (about once every five seconds).

"All the direct assembly operators, we train for two days, even though we don't really have to," MacDonald says. "You or I could sit down and do most assembly jobs with no training, easy. Hell, it's just pushing buttons, mainly."

Like almost all maquilas, turnover at the Amphenol plant is high. Hardy says it's 6 percent every month, one point under the industry average in Nogales.

Obviously, Hardy would like to reduce turnover. But simply increasing payroll isn't a realistic option.

Every year he worked for GE, Hardy says, "the same group of little old ladies" would put a resolution on the ballot at the corporation's annual shareholders convention that read "GE should pay their maquiladora workers double."

Every year, Hardy says, it was voted down.
"Can you imagine if it had passed? Can you imagine what would happen if we suddenly doubled our wages here?"

The workers would have twice as much money.
"Okay, sure, our employees would like it, and we'd have almost zero turnover, but the other maquilas would hate us, and they'd all be out to get us, because we'd throw the industry into complete upheaval.

"Not to mention the Mexican manufacturing companies, who pay less than we do. Already, they're constantly screaming and hollering about our wages being too high.

"And we're like, 'Well, we have to keep our turnover down,' and they respond with: 'Oh, that's easy for you to say. You get your money in dollars, and you're this big foreign company,' and I'm like, 'Well, yeah, what do you want me to do about it?'"

As Mexico's economy has slowly recovered after the 1994 peso crash, maquila wages have steadily improved. To stave off the threat of wage inflation, Hardy says, the Nogales members of the Maquiladora Association of Sonora formed a pact to set wages for new employees.

"We all participated in a salary survey, and agreed to offer the same starting wage," he says.

Sounds like price fixing.
"Well, I wouldn't call it that, exactly," Hardy says. "It's more like us saying, 'Hey, there's no reason for one of us to be paying a worker 30 more pesos than anyone else for performing essentially the same job.'  

"We follow the sheep mentality, and the maquiladora association is our shepherd."

Hardy says the association--whose members make up about 80 of the 97 maquilas in Nogales--set the starting wage at 53.47 pesos ($6.30) a day, including attendance and punctuality bonuses.

"Above and beyond that competitive wage," Hardy continues, without explaining how a fixed wage is competitive, "we offer our workers an attractive benefits package."

Such as?
"Well, we subsidize the cafeteria 95 percent, so the workers here get two outstanding meals a day. We also provide free transportation to and from work by bus, and we pay for cab rides if they work overtime and it's dark."

Also, Hardy says, every week the plants dole out food coupons to employees that are worth about $12, or 40 percent of the weekly minimum wage in Sonora, which they can use to buy groceries at two local supermarkets.

Anything else?
Hardy's sure there is, but he can't remember, exactly, so he phones Monica Ramirez, his human resources director. Asked what benefits the plants offer beyond cafeteria meals, bus rides and food coupons, Ramirez ponders a moment, then says, "Fiestas."

"Oh, yes," says Hardy, relieved.
"Every year we rent a salon and have a big Christmas party, and hire a band. And since 70 percent of our employees are not from Nogales, and more than 50 percent are from Sinaloa, we bring the band up from Sinaloa, so it's their music, which they really enjoy."

Hardy says the factory also threw a big party on Dia de los Ninos--Kids Day, May 1, also International Workers Day.

"All the employees had the day off, so we had them bring their kids to the plant, and my family came down, and my kids played with their kids, and we had a little train there, and a big bouncy thing they could jump around in, and pinatas and clowns, and I went around and passed out hot dogs and sodas."

Ramirez produces the Friday, May 8, front section of Hermosillo-based El Imparcial, Sonora's largest daily newspaper. The lead article on the front page--"Consumen ninos heroina"--details the alarming rise of cocaine and heroin addicts in Nogales under the age of 10.

The back page of the section is a full-color advertisement--nine photos plus text--covering the Amphenol Dia de los Ninos party.

"That cost us about $800," says Hardy. "But it's PR and advertising money well spent. With 800 employees and a 6 percent turnover, we're always hiring, so we like to present an employee-friendly image."

Hardy says Amphenol pays a 50 peso ($5.88) finder's fee to any employee who brings in a recruit.

"Quite often, a great employee will have a neighbor who would make a great employee, and we're looking for great employees wherever we can find them."

Ramirez reminds Hardy of another benefit--no interest loans.
"Right," he says. "We give emergency loans to our employees, and charge no interest. The typical situation is, a guy will come to us and say, 'My uncle had a car accident in Sinaloa, I badly need to send money home.' So, we'll give him 500 or 1,000 pesos ($118), and take the payments out of his paycheck, little by little, over the next 10 weeks."

Don't forget the Mother's Day party, Ramirez says.
Well, Hardy says, there was a "little gathering" for the plant's mothers on May 10. "We gave them the afternoon off, and they had a free meal, and I gave a speech thanking them for all their hard work."

He shrugs.
Mexico is a different place from America, Hardy says, and critics of his industry should keep that in mind.

"It's incumbent upon us to do what we can, but there are cultural problems, too.

"I know of one company farther south in Mexico that went in and put toilets in all their employees' shacks. Well, two months later, all the toilets were clogged up, and the workers were complaining. So the company went to unclog them and found all these rocks and leaves in the pipes.

"The company didn't realize that, instead of toilet tissue, these people used rocks and banana leaves. They didn't know how to use a toilet. So the company tried to re-educate these people, and the workers were offended. They were like, 'Who the heck are you to tell me what I should wipe my blank with?'

"And it's a good question. If the workers are content, who are we to dictate what they should or shouldn't have?"  

The international boundary that splits the downtowns of Nogales, Arizona, and Nogales, Sonora, is defined by a three-meter-high metal wall, splattered with graffiti.

U.S. Border Patrol agents in four-wheel-drive trucks cruise the streets on the Arizona side, and scour the desert washes abutting the steel curtain. The armed guards are players in a never-ending and sometimes deadly game of cat and mouse with desperate Mexicans, looking for an out.

For the record, America doesn't want them here, and every day, the Border Patrol ships them back by the busload. Off the record, Mexicans are the backbone of the Southwestern U.S.'s blue-collar labor force.

Two kilometers west of the DeConcini Border Center, hundreds of Mexican trucks line up at the Mariposa crossing (Nogales is the third busiest port of entry into the United States).

Most of the trucks are loaded with fruits and vegetables--half the winter produce consumed in the U.S. comes through Nogales--or industrial items and consumer products assembled in maquilas by the same Mexicans we pay the guys with guns to keep behind the wall.

After a lengthy delay and cursory inspection for contraband, the trucks are waved across to deliver Americans clothes, food, cell phones, model airplanes and microcomputer mother boards.

Maquila-made products worth more than $54 billion entered the United States last year.

Americans want the goods, but would rather not know or deal with the people who make them. For a long time, America's official interest in Mexican workers has been strictly utilitarian. The maquiladoras are no different.

The industry took root in American soil worked by Mexican hands.
The year was 1942, and U.S. farmers in the Southwest were hurting for labor--most of their workers were fighting in World War II.

To alleviate the shortage, the U.S. government cut a deal with Mexico called the Braceros program, under which Mexican farmworkers from the country's interior were bused across the border and issued work permits.

More than 400,000 Mexicans worked in the U.S. during Braceros, which remained in effect until 1964. Under pressure from U.S. labor unions, President Kennedy cited widespread human-rights abuses and canceled the program.

The Mexican workers were deported, with the majority of them settling in border towns, where unemployment skyrocketed. Many crossed back into the U.S. to work illegally.

In 1966, Mexico created the Border Industrial Program, or BIP, the blueprint for the maquiladora industry of today. BIP created factories where companies could import machinery and raw materials, tax-free. The factories were required to re-export the finished materials to the United States.

BIP represented a dramatic shift from the domestic focus of Mexico's economic strategy, which, until then, was designed to reduce dependence on the international economy, and placed strict restrictions on foreign investment.

American and other foreign interests began to invest in these factories but were limited to a 49 percent share.

BIP was supposed to provide jobs to displaced Braceros workers. Instead, the factory managers recruited almost exclusively (95 percent) young women. Most of them had little education and had never held a job.

Perceived to have more nimble fingers and docile minds, Mexican women entered the labor force in record numbers, Rosa-the-Riveter without a cause.

By 1972, there were 455 factories operating under BIP, employing 76,000 workers.

That year, Mexican leaders began to strip the red tape on maquiladoras. A key piece of legislation exempted maquiladoras from a Mexican law limiting foreign ownership of any business to 49 percent.

From then on, the majority of maquilas were 100 percent American-owned as well as American-controlled.

Here's how maquiladoras work:
X Corp., a company based in Phoenix, makes and markets cellular phones. X Corp. sets up a wholly owned subsidiary called "X Corp. de Mexico" and leases land in a Mexican industrial park. X Corp. and its U.S. suppliers (only 2 percent of maquila materials are purchased in Mexico) ship all the parts needed to make X Corp. cell phones directly to the Mexican plant, and pay no import fee.

X Corp. de Mexico workers put together, package and ship the cell phones to an X Corp. warehouse in Tucson, where they're stamped "Made in America," and distributed to X Corp. customers nationwide.

The only tax X Corp. pays during the entire process is a "value-added" duty on the export of the final product. Most of the value added to the product is the low-cost Mexican labor.

Thus, the lower the wages, the lower the taxes.
When the U.S. economy went into recession in 1974, the maquila sector faltered. The demand for products dropped, and 32,000 Mexican workers--about half the work force--lost their jobs.

The recession and a militant labor movement nearly killed the maquiladora industry in its infancy. Maquila owners and the Mexican government worked closely to squash independent unions until the more moderate--and government-aligned--union, CTM, Confederacion de Trabajadores de Mexico, could regain control of the plants.  

As the U.S. economy recovered, Mexican leaders excused maquiladoras from dozens of federal labor laws--including minimum-wage requirements, length of workweek, and terms of probationary employment that allowed maquilas to fire workers without severance pay.

These exemptions established the trend that continues today of maquiladoras operating well outside Mexico's laws, with the government's blessing and legislative support.

"The maquiladoras get cut any legal or enforcement slack they want, which only tightens the noose around the Mexican workers," says Leslie Gates, an American Friends Service Committee activist who lives in Tucson.

The deregulation of maquiladoras continued throughout the 1980s, culminating in 1989 when President Carlos Salinas opened almost all economic sectors, including agriculture, to maquila-style foreign ownership.

Salinas declared maquilas "an instrument necessary to help increase the international competitiveness of Mexican society." Foreign investment, he decreed, was "the principal means of inserting the Mexican economy into the global economy."

Agribusiness-corps such as General Foods (parent company of Green Giant and Campbell's Soup) purchased farmland in Mexico's interior and established "maquila farms," which import machinery, seeds and pesticides as raw materials, and export crops back to America as final product.

More efficient, the maquila farms further reduced the need for farmworkers--increasing the supply of labor and depressing wages for border maquiladoras.

Salinas' edict was a harbinger of NAFTA, which was signed in late 1994. Shortly after, two things happened: Rebels launched an armed insurrection in the southern state of Chiapas, and foreign investors pulled their funds from Mexico, toppling the country's currency.

Almost overnight, the peso's value was slashed in half.
The devaluation plunged Mexico into one of its worst economic recessions on record, wiping out millions of small businesses, triggering widespread unemployment and leaving surviving companies deeply in debt.

The devaluation had the opposite effect on maquilas, which pay their employees in pesos but sell their products in dollars. The devaluation cut labor costs by 30 percent, vastly increasing maquila profits.

The government reported that 830,000 jobs were lost nationwide in the year following the peso crash. Over the same period of time, maquiladoras hired 89,000 new employees.

Fifty-five businesses closed in Nogales, Sonora, in 1995. The same year, Nogales maquilas hired 5,000 new workers.

Multinational corporations stormed across the Rio Grande, pouring billions of dollars into state-of-the-art maquilas from Tijuana to Matamoros. Maquila production soared during the next four years, rising from $26 billion in 1994 to a projected $63 billion for 1998.

Ramon Larato is a maquila company man. A lifer.
He moved to Nogales in 1990 from Naco, a small town across the border from Bisbee, Arizona, and got a job in a midsize maquila called General Communications.

Eight years later, he's still there, only General Communications is now General Instruments, or GI, the largest maquiladora in Nogales.

GI's 2,800 employees make cable boxes for every major pay-TV company in America. The maquila is housed inside a 500,000-square-foot monolith of concrete and aqua-glass behind a curled-iron security fence. It sits on a hill overlooking the San Ramon Industrial Park.

Larato, 28, started on the line at GI, and has since worked his way up to chief quality-control inspector. He gets paid 910 pesos ($107) a week. GI treats him well, Larato says. The company provides a good, full-time doctor for its employees, and is paying for his night courses at Cecatis, a Nogales trade school, where Larato is studying electronics so that he can operate new machines. Then he'll get promoted to training supervisor, and start making 1,250 pesos ($147) a week.

Of course he'd like to make more money, Larato says, but GI pays him a fair wage. Last year, he bought his first car--a white, '82 Chevy Luv--and his first house, a concrete-block cottage in the Fraccionamiento San Carlos public housing project, high on a ridge above the eastern flank of Nogales. The GI plant is a short walk away.

The 1,000-unit housing development is laid out row-house style. The size of a double garage in Ahwatukee, each two-bedroom, one-bath cottage is attached on both sides to its neighbor. The walls are painted white with a sloppy hand. The roofs are corrugated tin. Each tiny kitchen has a tile floor.

General Instruments subsidized the construction of the San Carlos project, which began about two years ago, around the same time GI launched a major expansion of operations and hired more than 1,000 new employees. Larato says nearly all the project homeowners are GI workers, most of them machinists or longtime employees.  

San Carlos is the first effort in Nogales to coordinate public housing with the maquilas, and is viewed by civic leaders as a stride forward, although the cottages offer little privacy and look like an urban ghetto in the making.

Unlike a pay-as-you-go pallet house, they come with the financial padlock of a mortgage.

Structurally, the cottages are superior, fitted with water, sewer and electricity, but they cost about 85,000 pesos ($10,000) each--about two years' wages.

Larato financed his mortgage through GI on a 30-year payment plan (in a nation where small loans are nearly impossible to come by, even for business owners, GI plays banker and holds most of the titles). The payments are deducted from his weekly paycheck.

Larato says the nine months he spent on a waiting list, while the company decided which employees would be lent money, were nail-biting. He was thrilled when the mortgage came through. "If it wasn't for their help, I wouldn't be able to have this house, and I wanted this house because it's good for my life."

Even though the house was built almost two years ago, the air inside Larato's cottage still carries a whiff of fresh paint. There's a 10-inch Phillips color TV in a corner by the living-room couch, and a giant, stuffed Barney doll on the kitchenette table. Larato's 10-month-old son, David, spins curlicues in a roller-stroller on the polished concrete floor.

Larato's wife, Roberta, used to work at GI. They met two years ago, when she moved to Nogales from southern Sonora and got a job on the line, clipping wires. Roberta quit after David was born to be a stay-at-home mom.

She and Larato are two faces of the maquila worker--a Nogales nuclear family; husband, wife, kid, pickup, mortgage.

Here's another: Roger, 16, strutting past a series of Casio de Cambio, slapboard check-cashing huts outside the San Ramon Industrial Park, a red Houston Rockets jacket over one shoulder and his freshly signed "I quit" paperwork in hand.

Roger, who's from Sinaloa, just finished a seven-month stint at Acrylic Idea Factory, where he made 50 pesos ($5.88) a day.

Roger says he quit because he just got a job in a local bowling alley for 53 pesos ($6.23) a day. Roger doesn't care so much about the extra money, he was just tired of the maquila scene. The only problem with the bowling alley job is there's no overtime. At Acrylic, Roger was an overtime fiend. Anytime he could, he'd work a double shift for extra pay. The key, he says, was to stay high on cocaine.

"I'd buy a 50 peso paper [cocaine bindle] from the dude who did the cleaning in the plant," he says. Roger says there was a lot of coke at Acrylic. Pot, too. "We'd smoke joints outside on break, and do the coca anywhere. It made the time go fast."

Now there's a concept: Work a second shift at the maquila to make 50 extra pesos, which you spend on cocaine to make time fly. You're still working on the line, but you're high for free, with a pinch of blow for later.

Here's another face: Juan, from Oaxaca, 19, and 2,500 kilometers from home. Juan took a long train ride to Nogales in early June. Now he's hanging out near a bus stop, steps from his shack in Los Encinos, trying to hawk the 20 peso ($2.35) weekly supermarket coupon that comes with his maquila paycheck.

Juan makes disposable paper hats for Mexicap. So does Daisy, 17. Up from Sinaloa for a month now, living in Los Encinos with her cousin, Maria. Daisy earns 36 pesos ($4.24) a day. She made 35 ($4.12) in Sinaloa at a food packing plant.

Why did she move to Nogales? For one peso more a day?
Daisy shrugs. "No se." ("I don't know.")
Then she reconsiders. "To see what it was like here."
Does she like it?
"No se."
Again, a second thought: "It's okay, because I work with Maria."
Where does she want to be in five years, and what does she want to be doing?
"No se."
Daisy's look says, "I'm 17, what do you want from me?"

That's how it is with the workers, says Carlos Valenzuela, a Sinaloa native who at 31 makes around 255,000 pesos ($30,000) a year as the chief quality-control engineer for Amphenol's maquilas.

Some of the obreros, like Larato, will stick around, get training, and move up the ladder, Valenzuela says.

Others, like Daisy and Roger, are just drifting through.
"You see two kinds of people on the level of operators," Valenzuela says. "A few want to get better. They can see ahead, to the future, when more and more opportunities will be open to Mexicans in the maquiladoras. Where, if you're loyal to one company, you can move ahead, into management, into engineering. So, these few, they go to night school, they better themselves.  

"Now, most of the people making real money in the factories come straight from the universities, and not from the operator level, because most of the operators, they just want to work and get a little money, and that's it," Valenzuela says.

"It's the same here as anywhere."

Mexico's role as a provider of low-cost labor to U.S. and foreign industries has been firmly established by the maquiladora industry over the past 32 years--and is unlikely to change anytime soon.

"Manufacturing activities will occur with greater frequency in Mexico to serve the U.S. consumer market," according to David Eaton, an analyst with the National Law Center for Inter-American Free Trade in Tucson.

Will maquila workers' wages continue to rise? Probably, a little. But not a lot.

Maquila advocates argue that upward pressure on maquila wages is inevitable as Mexico becomes more industrialized.

Also, they point out, an increasing number of maquila workers are moving from the assembly line into higher-paying managerial, technical and professional jobs, which now comprise nearly one-tenth of the maquila work force.

But after three decades, maquila workers' buying power is one-half of what it was in 1980.

"Many say Mexico's market reform will cause wages to rise. In fact, reform hasn't come to Mexico's controlled labor markets," says Harley Shaiken, University of California labor economist and Mexican industry analyst.

"The government holds down wages to attract investment, labor rights are truncated and employers often conspire to set wages. As a result, rising productivity in Mexico doesn't translate into better wages."

As long as there is surplus cheap labor in Mexico--likely to be the case for some time, since half the country's population is younger than 18--wages will remain low, Shaiken says.

Maquila owners probably won't pay more, because no one--not their stockholders, not the U.S. or Mexican governments, and not even the workers--will make them.

Until 1994, no product made in a maquiladora could be legally sold in Mexico.

That's changing.
Under a provision of NAFTA, by the year 2001, all the maquila-made pagers, color TVs and other goodies that have been exported straight to the U.S. can be marketed to Mexicans as well.

The trouble is, unless wages for Mexican workers get a booster shot, few will buy those products.

So far, maquila employees have received a fraction of the industry's boom-time profits.

Nearly four years after the peso devaluation, maquila workers have just about regained the dismal purchasing power they had before December 1994.

Last year, wages and fringe benefits for all maquila workers increased an average of 19 percent, compared to Mexico's 14 percent rate of inflation.

Despite that gain, at $1.64 per hour, the average wage and benefits for maquila workers remain among the lowest in the world--less than factory workers in South Korea, Singapore, Taiwan and Hong Kong, and comparable to Malaysia, where Nike's Air Jordans are made by young women who earn $1.43 an hour.

While NAFTA has yet to substantially raise maquila wages, it has brought more maquiladoras to Mexico, with more on the way.

Beginning in 2001, any business outside the United States, Mexico and Canada that imports a product to North America--including raw materials for maquiladoras--will get slapped with a stiff tax.

As a result, companies outside the North American "free trade zone" are setting up maquiladoras to get around the tariff. Korean and Japanese maquilas, in particular, are demanding their Asian suppliers set up operations in North America.

NAFTA also encourages U.S. and Canadian companies to continue shifting their labor-intensive operations to Mexico. U.S. companies have invested more than $10 billion in maquilas since the agreement was signed.

Both trends are creating more maquila jobs, and more maquila revenue for Mexico.

Last year, maquiladora labor injected more than $8 billion into the country's economy. Some of the money went to pay off Mexico's foreign debt. A portion went to improving the nation's highways, pipelines, airports and railroads. Some, undoubtedly, was spirited away to offshore bank accounts, a la former president Carlos Salinas.

This much is certain: Little of that $8 billion was spent improving the lives of Mexico's working poor.

Pondering the future of maquiladoras and their workers is more than an exercise in social-political theory or a cause for liberal hand-wringing.

The maquilas are a cornerstone in the effort to build a unified regional economy that began in earnest with the signing of NAFTA by Mexico, Canada and the United States.  

While far from a political union, NAFTA is essentially merging the three economies into the largest common market in the world, with 380 million consumers.

As we enter this economic wilderness, the pivotal questions are:
Will your life become more like the woman in Nogales who pushed the same button 800 times an hour, for one-tenth of a penny per push? Or will her life become more like yours?

And, perhaps more haunting, is there anything you, or she, or Thayne Hardy can do about it?

Welcome to Naftania.

Contact John Dougherty at his online address: jdougherty@newtimes.com

Contact David Holthouse at his online address: dholthouse@newtimes.com


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