Profiting from Inequality

The maquiladora industry generates millions of dollars every year and thrives off of capitalism to provide goods and services to the ‘western world’ consumer countries (Prieto, 1997). Corporations located in Mexico being in close proximity to the United States and Canada have been able to construct a solid industry that they claim will benefit Mexico in the ‘long run’ by importing natural resources and raw materials through free trade zone agreements, using said material to create items for consumption, and exporting finished products to its neighbours up north. By doing so these companies have been able to maximize on profits by reducing shipping costs and importing costs because of the free trade zones where duties are not paid all in the name of economic development. Although there may be some positives and advancements where globalization, development and the economy are concerned by definition, I argue that the maquiladoras are creating a reverse effect and contrary to working towards the economic advancement of Mexico, the maquiladora industry is causing Mexico to become stagnant, thus creating a plethora of problems not only economically but also with the processes of globalization, development, and gender relations. This research paper will examine the concepts of globalization, development and gender relations and reveal their intersectional tendencies. In this research paper I also contend that the existence of the maquiladoras in Mexico does not work towards the progression of the the ideals and processes of globalization and development as so eloquently presented, which in turn perpetuates problems involving gender relations within the nation.

The maquiladoras have emerged as a prominent structural feature of the U.S.-Mexico frontier over the past 30 years, and stand as the prototype for what seems as a corporate shift from Fordism to a global regime of flexible accumulation (Prieto, 1997). As outlined in Prieto, (1997) the maquiladora manufacturing plants established in Mexico 1) are U.S. subsidiaries or contract affiliates under Mexican foreign ownership; 2) are dedicated to the assembly components, the processing of primary materials, or both, producing either intermediate or final products; 3) Import most or all primary materials and components from the United States of Canada and re ex-port the end products of the manufacturing process to the United States and Canada; or 4) are labour intensive. One can understand the purpose of a maquiladora as solely a place where one goes to work in order to produce products to earn a profit for the manufacturer. The introduction of maquiladoras in Mexican territory was initiated officially in 1965 under the boarder industrialization Program (Prieto, 1997). Since then, foreign enterprises who have been dedicated to the processing, assembly and finishing of raw materials and intermediate goods have brought plants from the United States to the principal cities of Mexico’s northern boarders with the objective of reducing production costs by capitalizing on the extremely low cost of labour. It has been said that, “the establishment of the maquiladoras in Mexico reflects a capitalist tendency that has developed since the 1960’s and that has facilitated the geographic relocation of productive processes to underdeveloped counties” (Prieto, 1997, p.13).

The plants are situated within Mexico by Trans-National Corporations (TNC’s), which are corporations who operate in more than one country at one time. The corporations provide almost all of the capital and technology needed in order for these manufacturing-export plants to function (Tiano, 1994). TNC’s also make it a point to operate within the zona libre, also known as duty free zones which are insulated from the national economy, and people who operate within them enjoy tax-free status which makes them key areas where TNC’s want to establish their enterprises (Tiano, 1994). One can also bring in foreign materials through a neighbouring country into the free trade zones and that would also qualify to be ‘duty-free’ (Schmidt, 2000). Not only are these areas cheap in terms of being close to counties that will consume the goods produced, but they also advantageous in terms of cost, access to communication with buying nations, transportation, and custom facilities. “The combination offers local financing viability, low administrative salaries, lower production-factor costs (electricity, telephone, maintenance, and labour), minimal training requirements, little regulation of labour conditions and environmental pollution, and effective exemption from federal labour law requirements” (Prieto, 1997, p. 25).

The development of these corporations at the northern borders was seen as a starting point to advance Mexico in the process of globalization. By creating these plants in close proximity to the United States they would have access to resources to help create these products and they would have one of the world’s largest consumers right at their doorstep to indulge in the final products manufactured (Thomas, 2010). “There has been a rapid growth of the maquiladora industry in Mexico, especially on the northern border. Between 1975 and 1990, the number of plants increased from 454 to 2033 (1,758 in the Border States), while the number of employees increased from 67, 214 to 465,800 (430,300 in the Border States)” (Cobos, 1993, p. 92). The development process had a direct impact on the number of individuals employed and created large urban populations near the boarders which also triggered mass migration which will be discussed further in this paper.

Globalization is often presented in a way where it is viewed as positive and globalization is seen to be an entity that reaffirms a countries status in within the society. It is a name for the process of increasing the connectivity and interdependence of the world's markets and businesses (Cobos, 1993). That being said by definition countries would want to play a role in the processes of globalization with the idea in mind that by participating, one’s country has taken a stand in the market and is competitive enough to compete with other markets that produce the same products and goods. This also is an opportunity for countries to generate income as well making their country the nation that others depend on for a particular product because they are able to produce the highest quality for the lowest cost. One should keep in mind, if one wants to remain competitive the costs of said product has to be low which means the cost of production needs to be even lower.

Capital accumulation, whether global or local, is predicated on exploiting cheap wage labour; the cheaper the labour, the greater the surplus value generated, and thus the higher the profits and the lower the product can be sold for to remain competitive (Wilson 2002). In order