World Bank calls for elimination of labor rights in Mexico
MEXICO SOLIDARITY NETWORK - WEEKLY NEWS SUMMARY MAY 22-31, 2001
WORLD BANK URGES END TO COLLECTIVE CONTRACTS, LABOR BENEFITS IN MEXICO
A new World Bank report on Mexico, entitled "An Integral Agenda of
Development for the New Era," was formally presented in Mexico on May 21.
The report includes specific recommendations on labor policy for the
government of President Vicente Fox, most notably proposals for increasing
the "flexibility" of Mexican labor.
Concretely, the report recommends that current regulations mandating
severance pay, collective bargaining, exclusion contracts, obligatory
benefits, restrictions on contracts for temporary employment and
apprenticeships, antiquity-based promotion schemes, company-sponsored
training programs, and company payments to social security and housing
plans, should all be eliminated.
The report suggested that North American investors attracted to Mexico
under NAFTA are put off by domestic labor regulations, and that without
making salaries more flexible, reducing company obligations toward workers
and essentially repealing the federal labor law, investors will continue
to have doubts about Mexico's economic future, while the poor will
continue to be "impeded" by pro-labor laws from "obtaining the greatest
benefit from their human capital."
While the World Bank recommendations created a good deal of controversy in
the press and among labor groups, they were solidly backed by the PAN
party and the Fox administration.
President Fox said that all the suggestions and recommendations made by
the World Bank "are very much in line with what we have contemplated," and
that indeed they are essential for Mexico to "really enter into a process
of sustainable development."
Managerial Coordinating Council (CCE) president Claudio X. Gonza'lez,
however, took a different view. The leader of Mexico's most influential
business organization affirmed that the World Bank recommendations went
"over the top," and that business leaders in Mexico have no intention of
eliminating elements such as severance pay, collective bargaining
contracts, or payment of benefits to workers.
"We are in the process of modernizing our [labor] law," said Gonza'lez,
"but some of these proposals of the World Bank are not made even to the
most developed nations. Why are they then being recommended for the
emerging countries?"
This report is a product of the Mexico Solidarity Network. Redistribution
is authorized and encouraged provided that the source is cited.
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