Miners in neoliberal Mexico

Abstract

This article describes the profound transformations of employment in the Mexican mining sector after the adoption and implementation of several neoliberal legal reforms at the end of the 20th century, ranging from the privatization of state-owned mining companies and mineral reserves to the new Mining Act of 1992, and the important inflow of Canadian capital favored by these legal reforms as well as by the signing of the North American Free Trade Agreement. This, along with the rising international prices of metals, particularly gold, led to a boom of Mexican mining, involving a boost of employment led by large metal mining companies. The analysis of these transformations, summarized below, is based on official statistics for a period of 25 years, from 1988 to 2013. These data are displayed in various tables, graphs and maps that support the assertions and conclusions reached, allowing a quick and easy reading and interpretation of the information presented. The growing dominance of large metal mining companies led to a critical spatial redistribution of the mining employment in the country, which experienced a boom since the mid-2000, led by gold, copper, and silver mining. The expansion of large metal mining companies in areas of Sonora, Zacatecas, and Durango was paralleled by a crisis of small and medium-sized mining, resulting in the extinction of the mining activity in various municipalities across the country. This crisis affected large non-metal mining in specific sectors and areas (the coal crisis in north Coahuila and the extinction of the sulfur mining in southeast Veracruz), but also small and medium-sized metal mining given the high investments required by the new production model: open-pit mining. Thus, while metal mining comprises increasingly larger companies in terms of their number of workers, small and medium-scale mining was virtually confined to nonmetal mining, which underwent an atomization process, i.e., an increasing number of smaller companies. This non-metal small and medium-scale mining is nowadays dominated by the mining of construction materials, a modality that gained jobs driven by the construction industry. Workers of large metal mining companies grew not only in number but also were benefited from a rise in salaries and payroll in real terms. It is worth to point out that Mexican miners enjoy high salaries compared to other Mexican workers, but low when compared with miners in other countries. This evolution, no doubt a positive one, was nonetheless tempered by two phenomena, the rise of subcontracting and of temporary jobs, phenomena promoted from large mining companies to achieve greater flexibility in the hiring and termination of the labor required. This flexibilization in the number of workers was supplemented with the flexibilization of the cost of labor, given the increasing importance of profits sharing in the overall payroll of workers, especially in the large metal mining sector; this way, the cost of labor was linked to company profits. However, payroll and salaries show huge contrasts within the mining industry: salaries are much higher for white-collar versus blue-collar workers; for permanent versus temporary workers; in large versus small and medium-sized mining companies; in metal versus non-metal mining. Thus, while a white-collar worker of a large mining company earns a monthly salary slightly above $18.5 thousand pesos, a blue-collar worker of a small and medium-sized mining company earns a salary of only $4.1 thousand pesos per month, having even seen his purchasing power reduced over the past years. In short, large metal mining companies, particularly those linked to precious metals and copper, were the main beneficiaries of the liberal reforms implemented in the country, also driven by the boom in metals prices in international markets. They were responsible for significant changes in mining in Mexico, both positive (increase in employment and salaries) and negative (increase in subcontracting, temporary jobs, and flexibilization of the cost of labor), so that their workers have partially benefited from this boom. However, their response in times of declining prices and the consequences for workers remain to be seen, with large mining companies having adopted key instruments (flexibilization of labor) to manage with the cycles of sudden and sharp expansion and contraction typical of this activity.