How Much Does GM Pay Mexican Workers?

One of the major concerns impacting the North American region over the last few decades has been the creation and implementation of trade deals. For a number of years, the United States, Canada, and Mexico have been joined by a series of free trade agreements. 

The agreements were designed to boost economic potential and profit between the nations, increase the opportunities for trade and exchange, and remove barriers that could inhibit financial advantages for all parties involved. 

The first agreement was the North American Free Trade Agreement (NAFTA) in 1994. In 2018, it was updated to the United States-Mexico-Canada Agreement (USMCA). 

At its core, NAFTA sought to remove trade barriers between the USA, Mexico, and Canada, with an aim to boost investment potential, increase trade opportunities, and increase economic viability thanks to the removal of tariffs and high taxes. 

Later, the USMCA built on this, updating the existing agreement to cover aspects such as copyright for digital media, intellectual property, and keeping job and investment opportunities within these nations. Part of this included taking a closer look at employment conditions and wages in Mexico, and working to ensure that all workers were treated fairly.

What Does The USMCA Say?

When the USMCA was implemented in 2018, the focus was not only on trade but also on labor and the rights of workers. The agreement contains an enforcement provision, known as the Rapid Response Labor Mechanism, which allows the United States to enforce penalties against an individual factory that fails to comply with domestic bargaining laws and domestic freedom of association. 

USMCA also focuses on improving wages and bringing jobs to the American auto industry. As part of this, the agreement states that parties are required to adopt, maintain, and practice the labor rights set out by the International Labor Organization (ILO) and to prohibit the importation of any goods created by forced labor. The ILO also addresses issues of violence against workers, sex-based discrimination, and the protection of migrant workers. 

With regard to Mexico, the USMCA requires the Mexican authorities to recognize the right to collective bargaining, allowing workers to engage in collective bargaining, and requiring companies to abide by the same labor principles as those required in the USA.

As part of this, Mexico took steps in 2019 to implement independent institutions to register unions and collective bargaining agreements, as well as the implementation of a new and impartial labor court, designed to adjudicate disputes fairly and meet the requirements of the agreement.

The goal was to ensure that workers across Mexico could enjoy the same safe working conditions, freedom to undertake collective actions and access unions, and higher wages as those in the United States and Canada. This included those working across the automotive industry. 

Not only was the aim to improve the quality of lives of workers across Mexico—the automotive industry is one of the largest employers, it was also intended to reduce the incentive for US-based companies to move their jobs south to Mexico and, instead, keep them in the United States. Time will show whether or not this affects Mexico car exports to the US. 

General Motors

General Motors in Silao, Mexico has come under fire in recent years, with regard to the USMCA, due to the low wages paid to their employees. One worker stated that she earned just 2300 pesos or $115.63 per week and was forced to take on side jobs in order to feed her family and make ends meet. 

In 2021, however, the first test of the USMCA came into play, when workers at GM Sialo voted on an opportunity to remove a union that many believed worked to protect the interests of General Motors over their own—the Miguel Trujillo Lopez union. 

Ultimately, the vote went against General Motors, with the final numbers reading 3214 for rejecting the organization and 2623 for keeping it. The result meant that workers were able to terminate their contracts and choose a new union, opening the door for the requirements set out by the USMCA.

What Are The Implications?

The victory against GM is a huge boon for Mexican workers. It has been the first major test of the new trade agreement, and it worked in favor of those it was designed to protect. 

The removal of the union will allow workers in the Mexico automobile industry to obtain the same rights, wages, and freedoms as those employed by General Motors in the USA, and this, in turn, means that companies looking to expand into Mexico can do so with the knowledge that their workers will still be able to deliver the high quality output Mexico has been known for, while making a livable wage. Which can lead to better employee retention and job satisfaction.