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The Impact of Changes in Competitiveness

upon Agricultural Wage-


Wage-Labor in Mexico

55th Annual Meeting of the


the Society for the Study of Social Problems (SSSP).
August 2005, Philadelphia, PA

SESSION 27:
Unintended Consequences of US Interventionism and N eo-
eo-Liberal Policies In Latin America

Irma Lorena Acosta Reveles


Posgrado en Ciencia Política
Universidad Autónoma de Zacatecas
México
To outline the recent changes in wage-
wage-labor
relations in Mexican agriculture resulting from
competitive entrepreneurial strategies and to
emphasize their impact on the way of life of the
farm workers and their families.
1. Context and Propositions
2. Competitiveness
3. Critical variables of competitiveness
4. Agro-
Agro-business in the Mexican Northwest
5. Strategies of the agricultural enterprise
6. Changes in labor relations
Conclusions
Context: Latin-
Latin-American underdevelopment in the frame of
the social capitalist order in
in the
the recent
recent decades
decades in
in which:
which:
A) The wage
wage--labor (in general) tends to be precarious in quality and scarce
in quantity

B) The regional agriculture is characterized by:

Radical transformations in the standards of cultivation, production methods,


commercial channels and product destination.
An increase of agricultural production volume and productivity with declining prices
for the majority of crops grown for both internal consumption and exportation.
exportation .
A positive global trade balance, maintained almost exclusively by the surplus of 3
countries (Brazil, Argentina and Colombia).
The decrease of farm labor following the historical trend, with unsalaried labor still
having a decisive influence.
A polarized agrarian structure: modern business and profit focus as opposed to small
low--profit capitalist production and domestic production (this extreme
low
represents 78 % of the productive units).
Limited agricultural land circulation in spite of the processes of agrarian counter-
counter-
reformation and of agrarian market reform. (These movements are centered on
land in privileged zones).
Proposition A
In accordance with international processes involving the Latin
American economy, the alterations in workwork--capital relations seen
in Mexican agriculture are notable in both quantity and quality.
Some these alterations include: the productive agricultural
processes in the zone tend to have an abundance of unskilled
labor which is easily replaceable; the dynamic and size of the
labor market is transformed; formal institutions and the practices
of acquisition and utilization of the workforce is modified; in
other words, the agricultural wage
wage--laborer is in a situation of
extreme disadvantage and this is exploited by employers.
Although it is true that the condition of the farm worker has
been critical by tradition, this being the starting point, the
changes which have involved structural adjustment and
neoliberalism in different areas have lead to the workers’
situation of initial disadvantage to an exceptional degree.
Meanwhile, the hegemonic position of the great farming
corporation is fortified by its capacity to influence the
productive and commercial priorities of the country,
the institutional direction and the permissive position
of the State. Its influence fully exceeds that of the
agricultural branch, since its area of influence spreads
from the provision of industrial materials and
involvement in the marketing process, to technological
(and biotechnological) innovation, for example.
The capacity of an economic entity to systematically maintain market
advantage. This notion is relative because it refers to the position of a
company in comparison to other similar entities.

Classic comparative advantages and competitive advantages


--Traditional
-- Traditional comparative or classical advantages depend on the
availability and characteristics of the production factors (land,
work and capital).
capital).

--Competitive
-- Competitive advantages are qualities that the economic unit acquires
deliberately: specially constructed production factors, neither
inherited nor fortuitous, have a high cost and demand constant
maintenance and feedback. They are the fruit of long processes
which require the participation of other economic and social
agents; and, evidently, the public sector. A defensive or
conservative attitude is not enough, it is also necessary to be
aggressive and proactive, always being aware and alert of the
changing environment.
Critical variables
* Increase of the productive work capacity (productivity) due to
technological innovations.
*Restriction in variable capital (wages) in initial investments or actions
orientated to saving money when it is a question of companies in
operation.
*The quality of the natural resources of the region; better still when it is
possible, to take advantage of them without needing to actually
purchase the land and water.
* Administrative and legal regulations regarding access to productive
resources and freedom to manage them; for example, the permissive
position of the State and its willingness to give grants for private
enterprise.
* Vertical and horizontal connections of companies or conglomerates of
companies which supply goods and services (clusters), as well as
inter--sectarian links by means of strategic alliances to strengthen
inter
efficient value chains. Here the public sector plays a significant role
by providing communication and transportation infrastructure,
electrical power, irrigation, etc.
Two observations

Regarding the option to increase labor and land


productivity through vanguard technological
advances, investors are extremely cautious .
Several studies reveal a resistance to integral
modernization of production processes. Even
when given the certainty of high yields, the
agricultural industry (whatever the size,
geographical location, product or destination
market) has eluded radical structural changes in
the production process.
One reason for this is the initial investment that it represents
in fixed assets and the signing of the corresponding
technological transference contracts. Furthermore, there is a
very long recovery period for the investment, risk and
inflexibility involved in the production process, at least in the
beginning. Similarly, the time and the resources needed for
the assimilation of the technology until its optimal advantage
is achieved, in addition to the commitments that are made
based on the sales or future profits, weigh very heavily as
well. Some of these disadvantages could possibly be
overlooked when it is a question of new investments, or when
there are pre-
pre-established links, regardless of their nature, with
the companies which provide the industrial materials,
machinery and in general, technology.
Another reason for this resistance to change is the
existence of other methods, alternate or intermediate,
to increase production and productivity. These
methods are principally generated by the extraordinary
disproportion between supply and demand in the labor
market, and the workers’ lack of social and political
force to negotiate with employers. Results are low
wages, labor contracts which are open or lenient in
terms of legal requirements (as with subcontracting);
women joining the workforce and/ or migrant work,
and clandestine labor (such as child labor or
undocumented workers).
One alternate method has consisted of perfecting
the management of human resources, such as
quality circles,
circles, the polyvalence and implication of
workers, in one sense similar to the activities of
the secondary and tertiary sectors, but adapted
to agriculture. And one intermediate method,
method,
assuming a moderate investment, which
produces short-
short-term and reversible results, is the
use of seeds selected or improved genetically,
and of other chemical inputs of industrial origin.
Agro--business in the Mexican
Agro
N orthwest
Baja California, Sonora, Sinaloa y Baja California Sur
(Areas of highly profitable agricultural production).
production).
Vegetables grown for exportation and industrial destination
(commercial crops of recent exportation like tomatoes,
asparagus, lettuce and carrots).
carrots).
Areas of attraction for external capital and the local middle
class, linked to institutional, infrastructural and
geographical advantages; and close proximity to both
national and foreign agro-
agro-industrial plants.
plants.
Areas of attraction for migrant workers. Most of the
workforce employed is out-out -of -state and the numbers
increase up to approximately 1.8 million laborers during
high season.
season.
Development characterized by territorial concentration.
Intentional recruitment of workers from the south of the country during high
seasons in order to generate a surplus.
Employment of clandestine and vulnerable laborers (pregnant women,
children, indigenous ethnic groups).
Seasonal employment to avoid long-long-term commitments.
Subhuman work and living conditions (in health, housing, hygiene, nutrition,
education, etc.)
Moderate incorporation of technology. The company is inclined to less
costly arrangements, with reversible, short-
short-term and medium-
medium-term results;
as is the case with the use
use of
of industrial
industrial materials
materials (seeds,
(seeds,fertilizers
fertilizersand
and
other agrochemicals).
Evasion of labor laws and safety regulations in order to cut costs.
Improper abusive practices: for example, wage retention, invalid deductions
and company-
company-controlled supply stores.
Selection of workers excluding those that appear on black lists for previous
problematic incidents such as union initiatives.
Changes in wage-
wage-labor relations

In the manner in which the workforce is taken


advantage of--
of--the
the production process.
Contracting--
Contracting --the
the moment of hiring of the
workforce.
In the turnover of the workforce--
workforce--labor
labor market.
In the way of life of the workers and their
families.
1. Because of the nature of the tasks (many of them non-
non-skilled), workers are
easily replaceable .
2. Excessive use and handling of toxic agrochemicals without safety measures,
protective equipment or adequate training.
3. Use of heavy and dangerous machinery which risk the life or health of the
worker (agro is one of most dangerous sectors).
4. Subhuman working conditions which cause chronic and / or degenerative
diseases.
5. The introduction of innovations (incorporation of scientific work
materialized in technology) lowers the value of manual labor. Likewise, the
value the manual worker adds to the final product tends to be minor.
5. Introduction
I ntroduction of machinery and chemical products in agriculture has
undoubtedly contributed to the increase of the production and
productivity in the region, but the technological changes in general have
not been accompanied by the necessary steps required for the protection
and improvement of the safety and health of the workers. The tasks have
been modified, the production process has been reordered, but new risks
have endangered health and safety (accidents, serious wounds, poisoning,
etc.)
1. Though the technological modernization is not the most
advanced available, at any given stage of the productive process
(such as harvesting crops or soil cultivation), manual labor may
be substituted by for machinery.
2. Worker turnover increases and this creates a work population
considered as floating or pendulous, thus depreciating the
workforce.
3. Furthermore, the labor market becomes saturated and the
demand for employment by floating or pendulous workers
increases which benefits for employers and further depreciates
the workforce.
4. The labor market feeds on the massive participation of
vulnerable sectors (child labor, for example).
5. The market is segmented (by age, sex, specialization …)
6. The employer can therefore select the youngest, most skilled or
docile workers who are willing to receive lower wages, for
example.
1. Contracting practices tend to be increasingly
disadvantageous for the worker in regards to duration
of the work day, intensity of the tasks and wages.
2. The general policy becomes hiring seasonal and
intermittent employees, without benefits, by means of
oral agreements and flexible arrangements which are
not usually within the boundaries of the law. (Generally,
there is no collective negotiation).
3. Traditional labor recruiters and subcontractors now
work with new companies, operating from the workers’
place of origin, transporting them to the worksites and
supervising the work.
D) The way of life of the workers and their
families
1. The reduction of the direct and indirect wages has had a major
impact on the way of life of the workers (nutrition, health,
education, housing), further exaggerating their condition of
poverty and vulnerability.
2. Conditions in the labor camps are beneath human dignity, despite
public aid programs designed to help them.
3. Families are overcrowded in the labor camps, living in unhealthy
conditions without access to medical services or education.
4. Workers must depend on the work of all other members of the
workforce in order to support their family.
5.The cancellation of general social policies implies the worker must
now resort to his own means to meet the family’s needs and
therefore is exclusively dependent on the market.
6. Finally, the intensity and type of labor that the farm worker
performs shortens productive lifespan.
Competitiveness rests on irrational exploitation of human and natural
resources in the region
Competitiveness, when it implies an increase in productivity, normally relies
on the progress of productive forces in other countries, that is, on
imported technology.
Taking into consideration these two aspects, this competitiveness is
spurious, illegitimate, falsified, and limited because it is not ecologically,
socially or financially sustainable.
Competitiveness promotes underdevelopment and does not support the
country’s accumulation of capital because it feeds the development of
other countries.
Competitiveness feeds the inequity of already unfair standards of revenue
distribution (social product) among regions and producers, and between
capital and wage-
wage-labor.
The worker suffers most from the methods of increasing the profitability of
the company, and this is reflected in his precarious way of life resulting
from the restriction of his income.
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