Mexico: ‘labor reform’ passes; economists ‘upbeat’

The Mexican Senate voted 96-28 on Nov. 13 to approve changes to the 1970 Federal Labor Law (LFT) that will legalize the use of part-time and contract employees, allow the hiring of workers for trial periods, and limit the amount of back pay businesses are required to give laid-off workers. The controversial “labor reform,” which had been approved by the Chamber of Deputies the week before, was sent on to President Felipe Calder贸n Hinojosa, who was expected to sign it into law.

The labor code changes were pushed through鈥攁fter a total of 71 days of debate in the two chambers鈥攂y legislators from the center-right National Action Party (PAN) and the centrist Institutional Revolutionary Party (PRI), with the support of two small centrist parties, the Ecological Green Party of Mexico (PVEM) and the New Alliance Party (PANAL). Both President Calder贸n, a member of the PAN, and president-elect Enrique Pe帽a Nieto, a PRI member who is to succeed Calder贸n on Dec. 1, supported the changes. The only opposition in the Senate came from the center-left Party of the Democratic Revolution (PRD) and the small leftist Labor Party (PT).

PAN and leftist legislators worked together in the past to include articles in the bill that would promote union democracy. The PRI, which historically has a base among conservative union leaders, strongly opposed these articles, and the Chamber of Deputies stripped them out of the final bill. An alliance of the PAN and the left in the Senate restored two of the articles, 388 and 390, by a vote of 65-61 during the Nov. 13 session; these would allow workers to use the secret ballot to choose the union that represents them and to vote on whether to approve a contract. But the Senate leadership separated these two articles from the bill and sent them back to the Chamber of Deputies for discussion; the rest of the bill was sent to Calder贸n to become law.

“[N]o one will be able to hide the fact that this bosses’ reform is being imposed by Pe帽a Nieto, in association with the one who’s leaving [Calder贸n],” Senator Manuel Bartlett, the coordinator of the PT bench, announced. Bartlett, a PRI governor of Puebla state in the 1990s before reemerging as a leftist, expressed his confidence that Mexican workers would fight the new law and demand social justice, the way European workers were fighting similar attacks on labor鈥攁pparently a reference to anti-austerity strikes many European unions were planning for Nov. 14. (La Jornada, Mexico, Nov. 14; Americas Blog, Nov. 15)

A blog at the US business weekly Barron’s called the new bill a “much-needed labor reform” and said “economists are still upbeat” even though “[t]he reform is watered-down a bit.” Marco Oviedo, the head Mexican economist for the British banking group Barclays, described the bill as a “very important structural advance” that could lead to a 1.5 to 2% increase in Mexico’s GDP growth over the next decade. (Barron’s, Nov. 14)

From Weekly News Update on the Americas, Nov. 18.