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Auto Industry Booms Where $2-Per-Hour Mexican Workers Make $40,000 SUVs

Mark Stevenson - The Associated Press
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September 26, 2017
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An employee at Audi's new plant in Mexico makes a last quality check on a Q5 at the finish line. Few Mexican workers can afford the $40,000 Audi Q5s they make. (Audi)

Auto worker Ivan Flores spends his days transporting parts for U.S.-bound Audi SUVs at a plant in central Mexico, but he laughs when asked if he could ever buy one of the $40,000 Q5 SUVs the plant produces on his $2.25 per hour salary.

“For us it is a dream to buy a Q5; we never could,” said Flores, 40, who supports three sons on his roughly $110 weekly paycheck.

The premise of the auto industry since the times of Henry Ford was that workers would make enough to buy the cars they produced. Across the U.S. and Europe, the arrival of an auto plant meant the creation of middle-class communities, with employees taking vacations, buying homes, cars, perhaps even cottages and boats.

But in Mexico — where the auto industry has boomed under the North American Free Trade Agreement, with plants like the Audi factory that opened in Puebla state in 2016 — the industry has created something different: a class of workers who are barely getting by, crammed into tiny 500-square-foot apartments in government-subsidized projects that they pay for over decades. Many can’t afford even a used car, taking home as little as $50 per week after deductions for mortgages and cafeteria meals.

Why have Mexican auto salaries stagnated or declined while pay for Chinese auto workers rose, despite all the promises that North American Free Trade Agreement would increase Mexican wages? That’s the question U.S. negotiators are asking as the third round of NAFTA talks resumes in Ottawa, Canada.

... Government records show that on Jan 24, 2014 — almost three years before the Sept. 30, 2016, inauguration of the Audi plant — the company signed a union contract that specified wages as low as $1.40 per hour, up to $4 per hour. The union says most earn about $2.25.

Read the rest at The Detroit News


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