Maquiladoras are foreign-owned manufacturing plants located in Mexico which are allowed to import raw materials on a tariff-free basis. They typically assemble products from the imported raw materials and then export the finished products to the foreign owner’s country.
Maquiladoras are important to trade between the U.S. and Mexico and the number of such plants has grown since the program started in 1965. These factories can often be found close to the Mexican and United States border because that makes transportation of the materials easier.
There are many stakeholders affiliated with the Maquiladora system, some that benefit and some that have many concerns about the system. Stakeholders include the Mexican and American governments, American consumers, Mexican workers, humanrightst activists, and American companies. It affects both governments because both were involved in making Maquiladoras what they are today. They were created in 1965 with the hope of fixing the unemployment problem in Mexico but didn’t become popular until 1994 when the North American Free Trade Agreement was signed.
This is when these factories started to appeal to U.S. companies and, therefore, the U.S. government. Maquiladoras benefit American consumers by lowering the price of products because American companies can produce their products at such a low price because of Maquiladoras, therefore, lowering the price of the product to consumers. Mexican workers have a large impact on Maquiladoras. These factories do supply jobs to many in Mexico, but with very low wages, making it hard for employees to live, and with health and safety issues.
Human rights activists are concerned with the conditions of these factories and the wages of the workers. Most importantly, American companies receive the most benefits from these factories. Companies can produce their products at low prices and can therefore sell their products to consumers for cheaper or create larger margins.
Although Maquiladoras provide a great benefit economically they cause a lot of environmental problems and heavily pollute Mexico as a country. Mexico as a country does not have strong environmental laws and that can be seen in the pollution caused by these factories. Waste removal is a big problem for these large factories and is not done properly. Toxic waste is placed in containers and buried underground. Over time these containers break and the waste spills into the ground. In worst-case scenarios, this waste can find its way into the water and has polluted thousands of people’s water supplies Waste removal is just one type of pollution created by these factories. Air pollution is one of the largest environmental concerns with these factories. With high levels of carbon dioxide being released daily border residents are exposed to high levels of -polluted air every single day, which may lead to many health issues later in life. Waste is dumped into the Rio Grande making the water undrinkable. Pollution has become so bad in some cities that clouds of chemicals are constantly floating above the factories and this is having a large negative effect on both wildlife and citizens. This can be seen with the rise in cancer rates among citizens living near these plants.
Working conditions in Maquiladoras are a big problem Mexico faces. The buildings are run down, dirty, and usually not well ventilated. Workers have a lack of training and are exposed to many dangerous chemicals and waste every single day. Due to the lack of training in these factories, safety is a large concern. Workers are not provided with safety equipment to help protect against accidents with the large machinery. Companies try to save money by not updating their machinery in these factories. That, combined with the lack of safety equipment and training, has led to many serious injuries ranging from burns to loss of limbs. The conditions in these factories are not safe to work in even with the correct training. Therefore, having thousands of untrained employees working in unsafe environments is a potential safety disaster. The physical health of the workers is just part of the problem. The mental health of employees becomes a larger problem – working in poor conditions for long hours with no breaks and very low pay can play a large role in creating mental health problems. Employees have tight deadlines to produce certain products and have unhealthy levels of stress because of the pressure to work at such high speeds.
Due to little pay, no legitimate labor union, and poor conditions, eemployees’standard of living is substandard. Maquiladora factories are one of the cheapest ways of production. The reason for this is their poor treatment of employees and the surrounding environment. Although Mexico does enforce labor rights, making all factories have labor unions, the issue is that the employees are unaware of it. This has made these unions come up with the term “Ghost unions” which are essentially non-existent, allowing companies to not enforce basic rights. On top of this, Mexico’s minimum wage has reached an all-time low of $1 an hour, allowing Maquiladora factories to capitalize on it. This forces the 1.2 million employees in Mexico who work in these factories to live in poor conditions. Due to proximity, most companies place these factories in Tijuana, as it is right along the border witthe h US. Tijuana, however, is considered to be highly concentrated in crime and generally under-developed. This makes the demographic of employees already be living in poor conditions. Originally the Maquiladora factories were thought to increase the economy and lower the crime rate. The income flowing into Tijuana allowed plans to develop the city’s transit system, urbanization, and local attractions. Unfortunately, the crime rate shortly returned, reaching over 600 homicides last year in the city, after the introduction of these factories. This proves that there are exploitations and flaws in these factories, negatively impacting the local standard of living and the national economy. In summation, having an issue in crime, a low income, and a non-active labor union, employees of Maquiladora factories have a very poor standard of living.
The global market of production is tough to compete with countries like China whiccanto produce at a low cost. Mexico, however, has man actors over the majority of global competitors creating the potential for success in this markNeighboringring right next to the biggest consuming country in the world, the USA, gives Mexico leverage over manual producing countries such as China and Taiwan. Mexico also can compete with global competitors as environmental regulations are low, and production cost is cheap. With all these factors, Mexico is generally more attractive for production than other nations. However, Maquiladora factories have abused this making its growth unsustainable and detrimental to the country’s economy. Mexican factories need to find a balance in the ordeforngevity of the Maquiladora factories and improvement in its economy. To do so, Companies should improve employee knowledge, and advocate labor unlaborithin them. This is necessary because, without it, employee efficiency, and overview of the Maquiladoras will decrease. It is also no surprise that the crime rate in locations near these factors is on the rise. Flooding the job field with unsanitary cheap work environments always creates an increase in crime and citizen dissatisfaction. To improve the national economy through factories, Mexico needs to enforce these regulations on the companies to improve the well-being of companies’ employees and ultimately, Mexican citizens. The fear behind this, however, is having to increase expenses reducingthe company’s competitiveness against global competitors. I believe this is not as big of a concern due to low shipping prices to western nations. This simple fact already gives Mexico the upper hand over others. In summatio,n Mexico should improve working regulations to create an adequate work environment and active labor unions. This would improve the well-being of employees thus improving the country’s economy, and lowering its crime rate.