Maquiladoras

Maquiladoras are assembly plants or factories that manufacture products for export markets using imported materials under special tariff or duty exemptions. They first began operating in Mexico since 1965, mostly along the northern border with the United States. From Tijuana on the Pacific Coast to Matamoros on the Gulf of Mexico, these tariff-free plants experienced their biggest boom in the 1990s after the passage of the North America Free Trade Act (NAFTA). Though the term "maquiladora" has been used for operations in other countries, it remains most closely associated with Mexico, and in particular US-Mexican trade relations.

The maquiladora system (from maquila, "processing fee" in Spanish) system gradually grew in popularity from the 1960s through the 1980s, after which it saw sharp growth. While there were only about 200,000 people employed in maquiladoras in the 1980s, the figure increased to over 1 million by the end of the 1990s. NAFTA made the system highly attractive to companies seeking lower-cost ways to manufacture goods for the US market: components could be imported into Mexico duty-free, products could be assembled with cheap labor, and the finished goods could be brought back into the United States with duty paid only on the value added to the components. Many American and Mexican companies took advantage of these economic benefits, as did a large number of Asian businesses. In the twenty-first century the industry saw some decline due to the availability of further cheap labor in China and elsewhere, but maquiladoras remained important in industries such as clothing, electronics, auto parts, and furniture.

Supporters of maquiladoras argue that they have had major economic benefits for both the United States and Mexico. Some American companies profited considerably from the ability to tap into inexpensive Mexican labor, and American consumers saw lower prices on many products. Mexico, meanwhile, was able to realize significant reductions in unemployment. Some economists suggest that the influx of jobs and money into Mexico slowly but surely improved the nation's overall quality of life. However, maquiladoras have also been heavily criticized from both sides of the political spectrum for various economic and social reasons.

Gender dynamics is one area in which maquiladoras have been seen to have both positive and negative impacts. In most Mexican maquiladoras, a large majority of the workers are women. Studies from the late 1990s found that these women had a median age of twenty-five and were more likely to possess a secondary education than other women their age. Most were single and usually migrated to wherever they found employment. For the most part, these women were satisfied with their steady paychecks and health benefits, although many found that their jobs alienate them from family expectations. When they left employment in the maquiladoras, it was normally because of family necessities, transportation problems, or disappointment with their jobs.

Many of these working women see a transformation in their relationships with the men in their families. The fact that maquiladora workers contribute an average 40 percent to household budgets can have a stressful impact on women's relationships with men in traditionally male-dominated Mexican families. However, studies suggest it is usually younger daughters who work in factories, not the family's main provider. Many young women give their earnings to their mothers, keeping only a small amount for themselves. Some women do become financially independent and therefore experience personal freedom; however, the family continues to maintain a substantial influence over them. Because interaction between men and women on the factory floor is limited, the large number of women working has not significantly altered gender attitudes. Although most assembly-line supervisors are women, generally women do not seek out these positions; accepting a supervisory role moves the women out of the work group and can create suspicion about their association with management.

Critics of maquiladoras have pointed out that the low wages paid to their employees constitute raw exploitation. Even with the numerous bonuses and benefits required by Mexican law, a large multinational maquiladora pays its assembly-line workers far below the US minimum wage. Examples of employees working seventy-five hour work weeks have been documented, and working conditions are often poor by international standards. Some factories in Latin America have used child labor, and union representation is uncommon. The maquiladora system has also been criticized for poor environmental regulation that in some areas has contributed to serious pollution issues.

Another persistent controversy over maquiladoras is the accusation that the low-wage factories constitute unfair competition and attract large numbers of US companies with a resultant loss of jobs in the United States. In response, manufacturers argue that higher wages would bite into the competitive edge that brought them to Mexico in the first place. Proponents of free trade and the globalized economy suggest that the overall economic benefits of the maquiladora system outweigh any loss of US jobs, and note that the decline of US manufacturing jobs in the late twentieth and early twenty-first centuries was due to a wide variety of complex forces rather than just NAFTA and maquiladoras. Regardless of these arguments, a strong political narrative emerged in the United States blaming free trade policies for a variety of social ills. Combined with displaced American workers' tendency to regard Mexican immigrants as contributing to the problem, this heightened racial and ethnic tensions within the United States.

Such concerns helped bring maquiladoras new attention around the 2016 US presidential election, as criticisms of free trade figured heavily in the campaign. Indeed, for many the race was characterized by the lead candidates' stances on the subject, with Democrat Hillary Clinton generally supporting NAFTA and free trade and Republican Donald Trump attacking it from a populist, isolationist platform (Bernie Sanders, an independent who earned much attention by running in the Democratic primary, showed that NAFTA had liberal critics as well). Trump in particular demonized Mexico on the campaign trail, earning considerable controversy for his racist and inflammatory remarks. When he won the presidency in an upset, analysts considered the future of NAFTA, and therefore the maquiladora system, highly uncertain. While in office Trump negotiated a revised trade agreement with Mexico and continued to call for returning manufacturing jobs to the US, though he also faced considerable opposition and the impact of his efforts on maquiladoras was unclear in the short term.

Bibliography

Beck, Allan. "Forces Driving Maquiladoras Along the Border of Mexico and the United States: A Short Communication." International Business & Economics Research Journal (IBER) 11.12 (2012): 1359–62. Print.

Hadjimarcou, John, et al. "Maquiladoras in the 21st Century: Six Strategies for Success." Business Horizons 56.2 (2013): 207–17. Print.

Heid, Benedikt, Mario Larch, and Alejandro Riano. "The Rise of the Maquiladoras: A Mixed Blessing." Review of Development Economics 17.2 (2013): 252–67. Print.

Lederman, Daniel, and Julia Oliver. "The Lessons of Mexico's Maquiladoras: where Free Trade and Labor Rights Compete." WorldCrunch. WorldCrunch, 22 Apr. 2013. Web. 3 June 2015.

Rosenberg, Matt. "Maquiladoras: Mexican Factory Assembly Plants for the US Market." ThoughtCo., 1 Feb. 2019,www.thoughtco.com/maquiladoras-in-mexico-1435789. Accessed 7 Feb. 2019.

Zaragoza, Barbara. "A Tour of Tijuana's Maquiladoras." San Diego Free Press. San Diego Free Press, 23 Oct 2014. Web. 3 June 2015.