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backLATINtalk April, 2012

In Mexico, auto industry fuels middle class

For 12 hours, Luis Moreno moved camshafts along the assembly line at the vast Nissan plant here, 30 seconds for each one. Now he was coming home in the dark, just as he’d left.

His five children were waiting inside. His wife. Her parents.

“I want you to know something,” said Moreno, 31, outside the small house he bought last year with a mortgage financed by Nissan. “It might sound sentimental or corny. But this company has given me everything.”

To be precise, Nissan gives Luis Moreno $130 a week. For that, he works four 12-hour shifts, one of 5,400 Nissan employees here making compact models such as the Versa and Sentra, performing a task so monotonous that it puts him in a trance. At a facility that is among the company’s most productive and profitable in the world, Moreno earns roughly one-seventh as much as a comparable worker at Nissan’s U.S. plants in Canton, Miss., and Smyrna, Tenn.

But here in central Mexico, where the global auto industry is booming, a job at Nissan is a path to the middle class. To work for the company in Aguascalientes today is akin to what it might have been like working in the 1950s for General Motors in Flint, Mich., or for Ford in Dearborn.

Only it is not the same.

Mexico’s export-oriented auto industry has a wide, pernicious gap between the high productivity of its workers and their low pay, critics say. Even with the lower cost of living here, the wage gap represents a hindrance to more robust middle-class growth. At General Motors plants in Mexico, the average worker earns less than $4 an hour in pay and benefits — compared with more than $50 in the United States, according to company figures.

It is a wage disparity with sobering implications for the long-term prospects of the U.S. auto recovery. After World War II, the auto industry lifted millions of Americans into the ranks of the middle class, as blue-collar workers bought cars, made cars, and bought more cars, spinning forward a virtuous cycle of growth and development that spread prosperity across the Midwest and beyond.

Mexico’s auto industry today is just as essential to the emergence of the country’s middle class. The latest demographic research shows that Mexico is crossing a critical threshold, as its middle class — about 53 percent of the population — becomes a majority.

Auto workers are churning out record numbers of vehicles in Mexican cities such as Puebla (Volkswagen), Silao (General Motors) and Toluca (Chrysler), with production up 24 percent in February over the same month last year. Several of these facilities are just as productive and technologically advanced, if not more so, as plants in the United States, Europe or Japan, where workers make far higher wages.

Mexico’s cost of living is significantly lower than that of the United States, as basics such as food, housing, health care and transportation are often government-subsidized and can cost half as much or less. But manufactured goods, clothing and household appliances can be just as expensive here as they are in American stores, or even more so because of high sales taxes and other levies. To a Mexican worker making assembly line wages that are 10 to 20 percent of U.S. pay rates, the lower cost of living is not nearly enough to compensate for the wage gap.

To read entire article, please click here.

Source: The Washington Post - GAI

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