In Mexico, $2-per-hour workers make $40,000 SUVs
Mexico City — Auto worker Ivan Flores spends his days transporting parts for U.S.-bound Audi SUVs at a plant in central Mexico, but he laughs when asked if he could ever buy one of the $40,000 Q5 SUVs the plant produces on his $2.25 per hour salary.
“For us it is a dream to buy a Q5; we never could,” said Flores, 40, who supports three sons on his roughly $110 weekly paycheck.
The premise of the auto industry since the times of Henry Ford was that workers would make enough to buy the cars they produced. Across the U.S. and Europe, the arrival of an auto plant meant the creation of middle-class communities, with employees taking vacations, buying homes, cars, perhaps even cottages and boats.
But in Mexico — where the auto industry has boomed under the North American Free Trade Agreement, with plants like the Audi factory that opened in Puebla state in 2016 — the industry has created something different: a class of workers who are barely getting by, crammed into tiny 500-square-foot apartments in government-subsidized projects that they pay for over decades. Many can’t afford even a used car, taking home as little as $50 per week after deductions for mortgages and cafeteria meals.
Why have Mexican auto salaries stagnated or declined while pay for Chinese auto workers rose, despite all the promises that North American Free Trade Agreement would increase Mexican wages? That’s the question U.S. negotiators are asking as the third round of NAFTA talks resumes in Ottawa, Canada.
U.S. President Donald Trump, widely seen as one of Mexico’s worst enemies, is pressing the issue of low Mexican wage rates, saying labor protections should be strengthened.
“It’s ironic, right, that he’s always criticizing us, but at the same time, he could do something that benefits us, by exposing the rot in the system” said Audi worker Eduardo Badillo, 34.
The key, in Mexico’s auto industry, may be the so-called “protection” contracts signed long before plants open. Very few of the current Audi workers ever voted for their union leader, and they won’t get any chance to vote for years.
Government records show that on Jan 24, 2014 — almost three years before the Sept. 30, 2016, inauguration of the Audi plant — the company signed a union contract that specified wages as low as $1.40 per hour, up to $4 per hour. The union saysmost earn about $2.25.