The Escalating Struggles Over Mexico's Labor Law

September 25, 2007

Labor law reform has become a high- profile issue in Mexico. Newspaper columnists and television pundits debate it, politicians in the Congress argue over it and hundreds of thousands of workers have taken to the streets to protest and resist it. At issue is an attempt by President Vicente Fox and his Secretary of Labor, Carlos Abascal, together with their National Action Party (PAN) and Mexican business interests, to codify into law many of the most egregious aspects of Mexico’s notoriously corrupt system of labor relations. The labor law reform proposal, known as the Plan Abascal, forms part of a conservative business agenda aimed at the privatization of industry and social programs, all within the context of the broader neoliberal agenda represented by the North American Free Trade Agreement (NAFTA) and the recently agreed-upon Security and Prosperity Partnership of North America.

Were it to become law, the Abascal Plan would become a critical part of the ongoing neoliberal project that has broken Mexico’s historic social pact initiated in the 1930s by President Lázaro Cárdenas. Since the early 1980s, Mexican neoliberals have striven to end economic nationalism and protectionism, to privatize state-owned industry, to stop the expansion of social security programs and to replace import-substitution industrialization with manufacture for export, particularly by maquiladoras. In the place of these development strategies, recent Mexican governments have promoted increased foreign investment through free trade, privatization of state industries, laws permitting 100% foreign ownership, a reduction in the federal social budget and an attack on labor unions and their contractual protections. The government would like to complete the process by passing a labor law giving employers flexibility—greater freedom to employ workers any way they wish.

In response, the current struggle has seen the development of new independent labor and social movement coalitions, and a remarkable demonstration of international labor solidarity. Mexico’s independent labor organizations and their international supporters have succeeded over the last few years in changing the public discourse and bringing a new awareness to labor rights issues. Meanwhile, international institutions have charged Mexico with labor violations, forcing the government to pay lip service to workers’ rights and union democracy. Despite the push by Mexican businessmen, multinational corporations and conservative political parties for continued neoliberal restructuring, Mexico’s independent unions have succeeded in holding their ground, stopping further privatizations and paralyzing attempts at pro-business labor law reform. They have been less successful in stopping the partial privatization of Social Security.

The Mexican revolution of 1910-1920 provided the foundations for the country’s contemporary labor law. Article 123 of the Constitution of 1917 contained the most advanced labor law in the world at the time, recognizing workers’ rights to organize unions, bargain collectively and strike. It also included protections for workers, profit sharing and the right to a job at a living wage. In 1931, the government codified Article 123 as the Federal Labor Law, and by the mid-1930s it had become part of Cárdenas’ social pact.

In practice, however, the Mexican ruling party and the state had taken control of both the labor authorities and the labor unions. The ruling party, eventually named the Institutional Revolutionary Party (PRI), controlled the Confederation of Mexican Workers (CTM), the Federation of Unions of Workers at the Service of the State (FSTE) and the National Peasant Confederation. The state and these “official” unions dominated the tripartite Federal Boards of Conciliation and Arbitration (JFCAs), which, together with local boards, regulated union recognition, collective bargaining and the legality of strikes. With the Mexican government’s turn to the right in the late 1940s, the PRI, the CTM and the JFCAs represented a conservative corporatist system in which workers had no power. The PRI then used violence to impose a new generation of corrupt leaders, or charros, on the unions in the early 1950s.

Serious debate over labor law reform began in the 1980s when the PRI, under the leadership of President Miguel de la Madrid (1982-1988), began to turn from its old nationalist and protectionist model to the neoliberal model of open markets, free trade, privatization and fiscal restraint. Under the new model, foreign investment became the economic priority and maquilas were viewed as the solution to Mexico’s economic problems. The PRI recognized that Mexico’s historic corporatist model of labor relations, involving the one-party state’s control over the labor authorities and most unions, had become too rigid for the new demands of national and international capital.

The PRI, along with Mexican employers’ associations and some “modernizing” union leaders, began calling for a “New Labor Culture” aimed at achieving higher productivity by giving employers greater flexibility. The idea was to create a labor culture like that of the United States, with fewer and weaker unions, less restrictive labor union agreements, and more contingent and part-time employment, thus giving employers virtually uncontested control of the workplace and the whole arena of labor relations. All of this, of course, was to be complemented by government and business efforts to hold down wages. While the government dallied, employers, often in violation of existing labor law, began to change practices in the workplace by encroaching on areas of historic state and union control, often with the official unions’ silent acquiescence.

The earliest attempt at a comprehensive labor law reform came in the late 1980s when Carlos Abascal, then-director of COPARMEX, the Mexican Employers’ Association, introduced a plan. At that time, however, the PRI, still too dependent on the old dinosaurs of the official labor unions, could not support the plan and it failed. But over the next two decades, Abascal would continue promoting what he saw as the key component of neoliberal economic reform.

Throughout the last 25 years, Mexico’s political, economic and social developments all moved in the direction generally sought by Abascal, the employers and economic conservatives. Mexico’s deindustrialization of the 1980s resulted in the closing of older plants that had experienced the presence of labor unions, strong contracts and relatively high wages. Emblematic of the era was the closing of the Fundidora de Monterrey steel mill where workers stripped naked to protest job losses, an appropriate symbol of their powerlessness in the face of global economic forces. At the same time, employment expanded in the mostly low-wage maquiladora zone on the U.S.-Mexico border, and in new industrial centers without a history of unionism.

President Carlos Salinas de Gortari (1988-1994) carried out a program of privatization in which he sold off 1,000 state firms, including TELMEX—the Mexican Telephone company—and the Cananea copper mine. In most cases the new private owners cut the unionized workforce drastically, sometimes by as much as 50%. As a result of these developments, union density—that is, the percentage of workers in unions—fell during the years 1984 to 2000 from 30% to 20%.1 Moreover, the economic crisis that followed implementation of NAFTA in 1994 together with peso devaluations and recurrent recessions have meant that Mexican workers’ wages fell by 50% between 1980 and 2000.2

With those disastrous conditions, one would have expected a labor revolt. Yet remarkably, throughout this period the Congress of Labor (CT), the Confederation of Mexican Workers (CTM) and other official unions remained loyal to the PRI despite their declining economic and political power. They also came under pressure to modernize and accept the new order. Taking advantage of this shifting balance of power, Abascal, as the head of COPARMEX, signed an agreement with the CTM in 1995 titled “Toward a New Labor Culture.” The agreement pledged higher productivity with union cooperation, the first implied step toward the employer goal of flexibilization.

With the election of President Vicente Fox of the National Action Party (PAN) in 2000, and his appointment of Abascal as Secretary of Labor, the issue of labor law reform moved to the top of the political agenda. Abascal’s pet project received a boost in May 2001 when the World Bank presented Fox with a list of specific recommendations on the country’s labor policies. The Bank called for greater labor flexibility to attract foreign investment, and specifically cited collective bargaining, severance pay, benefits, company-sponsored training programs, and company payments to Social Security and housing plans as policy measures that ought to be eliminated or reduced. In response, Abascal not only began working with Mexican employer groups and the official CT and CTM labor federations, but also with the new National Union of Workers (UNT), an independent federation formed in 1997, to develop legislation that eventually emerged as the Abascal Plan.

Abascal initially promised that any labor law reform would come as the result of a process of consensus, and that unless all stakeholders agreed, he would propose no new legislation. As things progressed, however, he worked more closely with employers and with the old official unions, while marginalizing the independent UNT. Fearing that Abascal was going to introduce legislation in the absence of consensus, the UNT made a preemptive move, taking its own proposal to sympathetic legislators from the Party of the Democratic Revolution (PRD), which introduced a democratic labor bill. As anticipated, Abascal also moved forward with his own project, the fundamental thrust of which strengthened the power of employers in the workplace and in labor relations, and limited the possibility that independent unions could win elections or first contracts.
The opposition to Abascal’s proposal has increased in size and strength due largely to a profound disillusionment with Fox. It should be remembered that President Fox, the former Coca-Cola executive, shoe manufacturer and rancher, won the election in 2000 with widespread support from many sectors of Mexican society. That election was widely characterized as the first fair presidential election in Mexican history, and was itself the result of the growing influence of civil society and social movements, including the independent workers’ movement.

Fox’s victory held out the hope that with the end of the PRI’s one-party state, government control over organized labor would also end, and that fair elections in the political sphere would be mirrored by fair elections in the sphere of labor relations. As a candidate, Fox had signed a document put forward by the independent labor movement in which he promised to uphold workers’ rights, including the right of workers to choose their own unions. However, the promise of democracy soon gave way to a practice that resembled the status quo ante. As Fox and Abascal held out a hand to the CT and CTM, and soon had them eating out of it, the old corporatist regime of the PRI was reborn in the form of a PAN-“officialist” alliance, with the CT and CTM supporting the Plan Abascal.

Fox’s agenda focuses on further cuts in the federal budget for social programs, proposes privatization of the petroleum and electrical power industries as well as the Social Security system, the passage of regressive tax legislation and labor law reform. His privatization plans directly threaten two powerful independent unions: the Mexican Electrical Workers Union, based in the Light and Power Company of Mexico City, and the Social Security Workers Union (SNTSS). Indeed, labor law reform threatens all of the independent unions because the pro-business plan pushed by Fox and Abascal would consolidate control over the workforce by the government and the official unions, while giving employers the flexibility they have been seeking on the shop floor and in industrial relations.

The dashing of the brief hopes that Fox’s victory might bring union democracy to Mexico gave momentum to the independent militancy that had been advancing along a tortuous path. Francisco Hernández Juárez, a militant leader of wildcat strikes back in the 1970s and the long-time head of the Mexican Telephone Workers Union (STRM), led the break with the dinosaurs of the CT. Although he had begun as a radical, Hernández Juárez became a favorite of President Salinas in the late 1980s, helping him privatize TELMEX and sell it to Carlos Slim, the richest man in Mexico and a friend of Salinas. Salinas lauded Hernández Juárez as a modern trade union leader, a true believer in the “New Labor Culture.” But when Ernesto Zedillo became president in 1995, Hernández Juárez suddenly fell from grace, and without political support, his union became very vulnerable. Hernández Juárez, who had never gotten along with the leaders of the CT or the CTM, began to look for new allies among both official and independent unions.

Fortunately, the STRM was not the only union looking for new solutions. In the spring of 1996, 21 unions, including 10 from within the CT, held a series of forums they dubbed, “Unions Face the Nation” that were intended to promote debates about a variety of labor-related issues. The participating unions became known as the Forum Group, and eventually these discussions led to more serious debate about the role of the unions in Mexico. In November of 1997, the STRM, the National Union of Social Security Workers (SNTSS) and six other unions pulled out of the CT and invited independent unions such as the Union of Workers of the National Autonomous University of Mexico and the Authentic Labor Front (FAT) to join with them in the creation of a new labor federation: the National Union of Workers (UNT).3

The UNT criticized the corporate model and put forward a program of union and workplace democratization that drew its inspiration, in large part, from the FAT, which had an established history of democratic practices and struggle for the right of workers to choose their own unions.4 Indeed, the FAT has strongly influenced the UNT’s discussions on workers’ democratic rights, as well as its practice, leading the UNT to adopt a shared presidency and decision-making by consensus.5

The Mexican Electrical Workers Union (SME), another usually independent-minded union, was also an active member of the Forum group, but declined to leave the PRI-dominated CT.6 Nevertheless, in August 1998 the SME, while still remaining part of the CT, drew together some 40 other unions, peasant organizations and urban poor peoples’ movements into an independent labor coalition (not a formal federation) called the Mexican Union Front (FSM). Although the primary focus of the FSM has been opposing the privatization of the electric-power industry, it defines itself more broadly as an attempt to create “an alternative unified, democratic, working-class, anti-capitalist unionism.”7

In 2002, a similar coalition of groups, but in this case led by the UNT, formed the Union, Peasant, Indigenous, Social and Popular Front (FSCISP).8 The FSM and its constellation of social movements began working closely with the FSCISP, which not only stands opposed to Fox and his political agenda, but also calls for a struggle against neoliberalism, attacks NAFTA, criticizes the role of the World Trade Organization and opposes the U.S. war in Iraq.

The two independent labor coalitions, now joined with other forces in the FSCISP, have shown a remarkable power of mobilization. The UNT, the FSM and the FSCISP organized massive demonstrations and walkouts against President Fox’s proposed labor law reform and further reforms of the Social Security system. In the most militant labor action since the early 1980s, hundreds of thousands of workers throughout Mexico—many of them Social Security health workers—walked off the job on August 31, 2004, some for just an hour and some for the day, to protest the government’s free trade policies. Thousands more joined in protest demonstrations and marches; the largest of them was a procession of hundreds of thousands through Mexico City. The huge protest was followed by another action a week later at President Fox’s State of the Union address to the Mexican legislature, where police held off thousands of angry demonstrators.
The coming together of an independent labor movement in Mexico has made more effective international labor solidarity possible. Canadian, U.S. and other unions around the world now have a genuine interlocutor and ally in the independent movement in Mexico. Since the founding of the UNT in late 1997, more unions have begun relating to the independent union federation and to other groups such as the FSM.

The development of such relations was neither quick nor easy. During the half-century from the 1940s to the 1990s, the leadership of Mexican and U.S. unions related to each other within the context of the Cold War and often under the guidance of the U.S. State Department and the CIA. In that period the old boy relations between high-level union bureaucrats of the AFL-CIO and the PRI-controlled Confederation of Mexican Workers (CTM) often had more to do with anti-Communism than with worker solidarity.9
Genuine international labor solidarity arguably began in reaction to the negotiation of NAFTA. When U.S. labor unions sought to recruit their Mexican counterparts in the fight against the new trade agreement, they discovered that the CT and the CTM, dominated by and dependent upon the PRI, were actually supporting NAFTA. With the realization that Mexico’s state-controlled official unions were on the other side, U.S. unions began questioning the historic relationship between the AFL-CIO and the CTM and started looking elsewhere for allies. Within a few years they found them in the independent unions.

The FAT had a long history of international relationships, and its independence from the government set it apart as the only Mexican labor organization at the time that was critical of NAFTA.10 Unencumbered by political obligations or historic restrictions, the FAT and the United Electrical Workers (UE) in the United States had developed a model of mutual solidarity in the form of their “strategic organizing alliance.” The two unions pledged cooperation across the border, both in opposing NAFTA and in supporting each other’s organizing work. Over time, the FAT introduced the UE to its fraternal allies in Quebec, while the UE introduced the FAT to unions in the United States.

In the years following the passage of NAFTA, Hernández Juárez’s telephone workers developed ties to the Communication Workers of America in the United States, while other AFL-CIO unions developed similar cross-border ties with their counterparts in Mexico. The AFL-CIO also followed the lead of the Canadian Labor Council in expanding the scope of their relationships beyond the CTM.

Last December, the pan and PRI joined together and were poised to push the Abascal Plan through the Mexican Congress. The initiative was presented to the lower house of Congress—the Chamber of Deputies—on December 12. In the month preceding the submission of the draft bill to a working committee of the Chamber, the Fox Administration had made a strong public relations push in favor of the plan. But Mexican labor and social movements responded rapidly, beginning a sit-in at the Chamber on December 1, and calling for major mobilizations in Mexico City and around the country.

Acting on behalf of the UNT, the FAT called on its long-time ally, the UE, to help organize international opposition to the Abascal Plan. In response to the urgent request, many trade unionists from the United States and Canada sent letters of protest. In addition, Human Rights Watch issued an eloquent letter condemning the reforms that received extensive coverage in the Mexican press. Faced with threats of major mobilizations, the government blinked: the PRI leaders announced that the introduction of the bill would be delayed until the Congress re-convened on February 15. This delay allowed the international opposition to gather strength.

Human Rights Watch sent a second letter to Mexican legislators in February. The letter bluntly stated, “The Abascal Project, under consideration in the Labor and Social Welfare Commission of the Chamber of Deputies, would be a serious setback for workers’ human rights in Mexico.” It also asked Mexican Deputies not to vote on the proposal because it would violate workers’ rights, and suggested they return to the drawing board and come back with a more democratic labor law reform bill.11

Meanwhile, a remarkable alliance, including a score of important labor organizations from all three NAFTA countries, filed a complaint under the North American Agreement on Labor Cooperation (NAALC) [See “Customtrim/Autotrim,” p. 28] that challenged the Abascal Plan as a violation of the terms of the trade agreement, as well as Mexican and international law.12 The coming together of such an important group of labor organizations from various industries and sectors represented a new level of labor cooperation at the international level. Although most of the unions involved have little hope that the NAALC will be able to resolve these issues, or will even attempt to do so, the labor coalition that has developed represents an important step toward the strengthening of the North American labor movement. The petition to the NAALC in itself is an important political document, a scathing indictment of the lack of labor rights in Mexico.

While the independent forces within the UNT, the FSM and the FSCISP—labor and its allies—have developed strong ties to their counterparts in the North American labor movement, the struggle to stop the Plan Abascal will have to be fought and won within Mexico itself. To attain that victory, these new independent forces will have to engage in economic and political action that finds sufficient support among the broad public to affect the powers that be. Hopefully, that is beginning to happen.

About the Authors
Dan La Botz teaches history and Latin American studies at Miami University in Oxford, Ohio. He is the author of books on labor unions in the United States, Mexico and Indonesia. He was formerly a labor activist, union and community organizer. Robin Alexander is director of international labor affairs at the United Electrical, Radio and Machine Workers of America (UE).

1. David Fairris and Edward Levine, “Declining Union Density in Mexico,” Monthly Labor Review, September 2004. See,
2. Carlos Salas and Eduardo Zepeda, “Empleo y salarios en el México contemporaneo,” Enrique de la Garza and Carlos Salas, eds., La Situación del Trabajo en México, 2003.
3. For a succinct account of the developments in somewhat greater detail see “Panorama general de las alianzas sindicales en México 2004.” See,
4. Much of the change in consciousness about democracy in the labor movement can be credited to the FAT. The FAT’s democratic practices, such as its shared presidency, decision-making by consensus, critique of Mexico’s corporatist system, and its open convention discussion have had an impact on the National Union of Workers, of which it is a member.
5. UNT documents can be found on the home page of the Mexican Telephone Workers Union (STRM), http:/
6. The SME has remained a member of the CT, probably hoping that it might offer it some sort of political protection. The SME’s 40,000 members all work for the Light and Power Company of Mexico City, which has for years been threatened with privatization. There have also been constant threats to merge Light and Power into the Federal Electrical Commission, and thus force the SME into the Sole Union of Electrical Workers (SUTERM), a larger official union headed by Leonardo Rodríguez Alcaine, who also heads the CTM and the CT.
7. “Primera asamblea nacional del frente sindical mexicano,” Trabajadores, Nov-Dec 2002, No. 33.
See, See also the “Frente Sindical Mexicano” Web site, located on the Web site of the government of Mexico City.
8. The FSCISP was founded by the National Union of Workers (UNT), El Barzón (the debtors’ union), the Permanent Agrarian Congress (CAP), the Countryside Can Stand No More (El Campo no Aguanta Más) and the Movement for National Unity in the Fight Against Neoliberalism (la Promotora por la Unidad Nacional de Lucha en Contra del Neoliberalismo), as well as many other smaller unions, farmers’ and peasants’ organizations, and urban social movements. The manifesto calling for the FSCISP can be found at,
9. Due to Cold War politics, the only labor organization that the AFL-CIO related to in Mexico was its counterpart in the ICFTU: the CTM.
10. Early on, the FAT joined the Christian Democratic Central Latinoamericana de Trabajadores (CLAT), although both the FAT and Quebecois CSN left because of differences over policy in Central America. It also maintained close fraternal contacts with the General Confederations of Workers of France (CGT), the Italian CGIL and others.
11. “Mexico: Fox’s Labor Reform Proposal Would Deal Serious Blow to Workers’ Rights: Letter to Mexico’s Chamber of Deputies.” See,
12. Jeff Vogt, Senior attorney of the Washington Office on Latin America (WOLA), acted as lead attorney on this case, filing the communication on behalf of the labor organizations. The Public Communication of Feb. 17, 2005 was submitted by 20 labor organizations; two more subsequently joined as petitioners.

Tags: Mexico, labor, labor law reform, unions, Vicente Fox, neoliberalism

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