Maquiladoras in Mexico. The Maquiladora Program was first introduced in the 60’s by the Mexican government.
Maquiladoras in Mexico
Maquiladora is a Mexican term that stands for the production of goods within a free trade zone; where the manufacturer imports material with advantageous tax benefits and exports the finished product (often back to the country of origin of the raw materials). The Maquiladora Program was first introduced in the 60’s by the Mexican government in an attempt to stem rising unemployment along the American border by offering a source of inexpensive labor to foreign companies looking for ways to reduce costs. For business, the benefit of this program would be greater profitability for the company and the savings would be passed on to the consumer in the form of more inexpensive products of equal or better quality.
The maquiladoras proved exceedingly popular with large American companies and before long, maquiladoras became the largest industry in Mexico next to petroleum. Maquiladora products have accounted for more than 50% of the exported products assembled there. The term maquiladora comes from the word maquila which is a "millers share". This quantity is what a miller would charge to process other people's grain.
In the 5 years leading up to the year 2000, Mexican exports tripled in volume and the Maquiladora industry accounted for 17% of Mexican employment with one factory opening per day. In the year 2000, other countries such as India and Pakistan posed a threat to Mexican Maquiladoras by providing even cheaper labor along with an equally educated labor force. Since 2010, the amount of Maquiladoras in Mexico has been decreasing. But, even so today, there remain more than 3000 factories, employing one million people. Continuing to operate along the border, factories are producing exports accounting for a still high at 45% of assembled exports.
Maquiladoras are well known for their unequal labor force where women are favored over men for employment. They work long hours and receive a minimum wage that is far below the amount necessary to sustain a family. Recently, due to changing demographics, men are becoming more visible in the maquiladoras as in integral part of the workforce but wages still remain desperately low.
Another negative side effect of the maquiladoras is the environmental impact of these factories on their surroundings. The La Paz Agreement was signed by the governments of Mexico and the US. stipulated that American companies operating maquiladoras would transport their hazardous waste back to the US for disposal. Unfortunately the La Paz Agreement has been a massive failure with only 91 of 600 factories actually returning to the US toxic waste. While some maquiladoras don't produce waste since they are sewing and assembly shops, others were found to have disposed of their waste in local rivers and deserts. But, interestingly, what creates the most environmental damage is the lack of proper sewage.
While the maquiladoras have brought employment to an area with little natural resources and job opportunities, the cost has been great. Low wages, environmental issues and unequal working conditions based on gender have created problems that cannot be easily solved. In the need for companies requiring profitability along with the North American consumer requiring better and more inexpensive goods, the maquiladoras are a double edged sword. More cooperation and oversight is needed to assure that in the future the negative aspects of this very important industry become a thing of the past.