Mexico’s Federal Labor Law of 1970 needs urgent reform to catch up with changes in the labor world. Unfortunately, this reform is happening during a transition between two administrations, so what should have been a comprehensive labor reform is a political deal that protects partisan interests to the detriment of the majority of Mexican workers.
President Calderón for years has proposed labor changes that were opposed by Institutional Revolutionary Party (PRI) lawmakers. The labor flexibilization bill included a section to make selecting union leaders more democratic and union operations more transparent. The PRI did not agree to sacrifice its political apparatus because of string-pulling by labor unions.
Months later and after a presidential election, a reform negotiated between the outgoing PAN and the returning PRI is being fast-tracked.
In this case, the PAN is promoting an agenda with changes in hiring and outsourcing, which allows hourly wages and limits back wages to one year. At the same time, the PRI was able to prevent union leaders from being elected through free, direct and secret votes.
In summary, the labor reform has the worst of both parties for workers. It takes away current protections and extends a corrupt labor union system.
It is true that the current labor framework needs urgent changes that clearly facilitate hiring as well as justified firings. The antiquated system needs to be flexible.
However, the changes do not guarantee economic growth, as President-elect Peña Nieto said after the Chamber of Deputies passed the reform. The division of one task between several people provides employment, but it diminishes individual wealth if it allows for a lower salary, paying the employee by the hour instead of by the day.
With this reform, which is now in the Senate, Calderón does Peña Nieto a big favor by delivering a thorny reform so he does not spend political capital on it.
Once again, the endless five-month transition period in Mexico between one administration and the next provides an opportunity for unhealthy political deals like this one.