Maquiladoras in Mexico

The Mexican maquiladora is a major source of growth and foreign investment in the Mexican economy. Therefore, the maquiladora industry influences the country’s migration patterns of workers in search of better employment opportunities. Faced with fewer opportunities in the rural economy, Mexican workers have emigrated to urban areas and to the U.S. Over the last 100 years, Mexico has experienced a transition from a rural to an urban economy. Consistent with that trend, nowadays less than 23 percent of the population lives in rural areas.   With NAFTA, the urban-rural migration flow increased even more rapidly. The trade agreement effectively eliminated all trade barriers and placed Mexico’s domestically produced corn in direct competition with highly subsidized corn imported from the United States. Consequently, Mexican corn farmers, who comprise the majority of the country’s agricultural sector, experienced drastic declines in the domestic price of their product and thus faced increasing difficulties to attain a sustainable living. Hence, high levels of migration into Mexico’s cities in the latter half of the 1990’s, and the beginning of the 21st century were observed, as these displaced farmers and rural workers abandoned their previous livelihood in search of employment.  
Due to the high overflow of people looking for jobs in the industrial sector and the constant competition the maquiladoras face from other countries where labor is cheap, the wages of the maquiladoras’ employees are kept low and the working conditions are not safe. In general, the income of Mexican workers has lost 76 percent of its purchasing power over the past two decades.   “The government estimates that 40 million people live in poverty, with 25 million in extreme poverty.”   A 2001 study by the Center for Reflection, Education, and Action presents an illustrative example of this disparity in purchasing power. The study found that “it took a maquiladora worker in Juárez almost an hour to...