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Cablegate: Federal Civil Servants Union Reelects Leader And

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PP RUEHCD RUEHGD RUEHHM RUEHHO RUEHJO RUEHMC RUEHNG RUEHNL RUEHRD
RUEHRS RUEHTM
DE RUEHME #0921/01 0541759
ZNR UUUUU ZZH
P 231759Z FEB 07
FM AMEMBASSY MEXICO
TO RUEHC/SECSTATE WASHDC PRIORITY 5499
RUEHC/DEPT OF LABOR WASHDC
INFO RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE
RUEHXI/LABOR COLLECTIVE

UNCLAS SECTION 01 OF 02 MEXICO 000921

SIPDIS

SIPDIS

DEPT FOR DRL/AWH ILCSR, WHA/MEX AND PPC, USDOL FOR ILAB

E.O. 12958: N/A
TAGS: ELAB ECON PGOV PINR MX
SUBJECT: FEDERAL CIVIL SERVANTS UNION REELECTS LEADER AND
DEBATES PENSION/HEALTH CARE REFORM


1. SUMMARY: On February 16, Mexico,s federal civil service
union federation, (the Federation of Unions of State Workers
) FSTSE), held a national convention to elect, or more
specifically, unanimously reelect its Secretary General, Joel
Ayala Almeida. This will be Ayala,s third term as the
national leader of the federal civil service union
federation. During the convention Ayala expressed his
opposition to salary caps for federal civil servants and to a
Mexican government plan to promote voluntary retirement as
way of eliminating jobs. Other items on the convention
agenda were the admission into the federation of 13
previously unaffiliated public service unions and the
formation of a union select committee to study proposed
reforms to the federal employees, pension and health care
systems. The pension and health care system debate could
have broad implications for the Mexican government,s federal
budget and for the 1.6 million civil servants that FSTSE
claims to have on its union membership rolls. END SUMMARY.


UNION LEADER REELECTED
----------------------

2. On February 16, Mexico,s federation of federal civil
service unions (Federation of Unions of State Workers )-
FSTSE) held a national convention. The main purpose of the
convention was to elect an individual to the federation,s
top leadership position of Secretary General. As expected,
the convention reelected Joel Ayala Almeida to his third term
as FSTSE Secretary General. With this reelection, Ayala is
scheduled to serve as the leader of the federation until
February 2013. In addition to being reelected as FSTSE
Secretary General, at present Ayala is also a PRI Federal

SIPDIS
Deputy (equivalent to a US Congressman) in Mexico,s current
national legislature. Ayala previously served as a Senator
for the PRI (Institutional Revolutionary Party) in the
previous session of the national legislature.

3. Joel Ayala,s reelection to the position of FSTE Secretary
General was a foregone conclusion as he essentially ran
unopposed. Ayala reportedly received the unanimous ballots
of all 800 of the delegates eligible to vote in the FSTSE
elections. As is customary in many union elections in Mexico,
the FSTSE conducted the balloting for the office of Secretary
General via a process known as an &economic vote8;
essentially a show of hands.

4. During his acceptance speech, Joel Ayala pledged to
continue doing everything possible to promote the interests
of federal civil service employees. As an example of his
efforts on behalf of FSTSE Ayala noted that when he took over
the federation in 1998 the base average monthly wage for
public employees was 1,536 pesos (USD 142.00) and now, thanks
to the federation that average wage has risen to 4,550 pesos
(USD 421.00) a month. Ayala expressed his firm opposition to
salary caps for federal employees (an idea strongly favored
by Mexico,s recently inaugurated President, Felipe Calderon)
and to a GOM proposal to offer (early) voluntary retirements
as a way to eliminate public service jobs.


OTHER ITEMS ON THE CONVENTION AGENDA
------------------------------------

5. In addition to electing a new Secretary General, the
FSTSE national convention had two other major items on its
agenda.
The first was a vote to expand the federation franchise.
During the convention 13 other, previously unaffiliated
public service unions were admitted into the federation.
Prior to the admission of these new unions the FSTSE was
composed of 86 individual public employee organizations,
which, according to the federation, claimed to represent some
1.6 million federal civil servants throughout Mexico. Now,
with the addition of the 13 new federation members, FSTSE
claims it will represent over two million federal employees.


6. The some of the new member unions who are now part of the
FSTSE include the Union of Mexican Navigation and Aerospace
Service Employees; the Administrative Offices Workers Union,
three separate unions within the Secretary of Transport and
Communications, two separate Metro (subway) Workers Unions,
the Employees Union of the Mexico City District Attorney,s
Office, the Mexico City Education (teachers) Workers Union,
and the Employees Union of the Secretary for Public Security
of Mexico City.


MEXICO 00000921 002 OF 002


CONVENTION DISCUSSES PENSION AND HEALTH BENEFITS
--------------------------------------------- ---

7. The second major item of business on the FSTSE agenda was
a discussion of a pending law to reform federal employees,
pension and health care benefits. At present these benefits
are provided by ISSSTE -- the Institute for Social Security
and Security for Civil Servants. Under the administration of
ISSSTE federal public employees receive health care and
pension benefits through a system that is separate from the
ones available to most Mexican citizens or workers under the
national pension and health care systems. The pending ISSSTE
reform law that the convention discussed was first proposed
last year by Joel Ayala Almeida when he was still a federal
Senator.

8. As originally proposed the reform law drew heavily from
recommendations that the World Bank first made to the Mexican
Government in 2001. When first introduced to the Mexican
Congress, the ISSSTE reform laws, and the World Bank
recommendations on which it was based, were broadly
criticized as being too harsh. The proposed reforms would
have removed some of the disparities between the (more
generous) pension benefits available to public employees and
these available to the average Mexican worker.

9. Other changes proposed in the reform law would have
required more standardization across the board in how
pensions for federal employees are administered. Under the
standardized systems a mixed board of government and union
appointed trustees would oversee the administration of
federal employees, pension funds. The trustees would also
be responsible for overseeing a system which tracts the
benefits of individual employees more accurately than the
system which currently exists. In addition the proposed
reforms would raise the retirement age of public employees
and, starting in 2008, gradually increase the contributions
to pension funds (over an as yet to be determined period) by
both the GOM and federal employees from its current 3.5
percent of base salary to 6 percent of base salary.

10. With regard to health care benefits, the reform law
would continue to allow parents of public employees to have
access to ISSSTE medical services but only if the parents
lived with the employee and were financially dependant on
them. The proposed reform would cut benefits to the children
of federal civil servants across the board. At present the
children of federal employees are eligible for ISSSTE health
services until age 18 or until age 24 if they are full time
students. The proposal would change the maximum age for
eligibility to health services to 16 years regardless of
whether the son or daughter was a full time student.

11. The delegates at the FSTSE national convention decided
that there was insufficient time available to them debate
(and study) the implications of the proposed ISSSTE reform.
Consequently, the convention formed a select committee to
review the issues involved and report back to the national
FSTSE leadership at an unspecified date.

COMMENT
-------

12. The reelection of Joel Ayala Almeida was fairly typical
of the way in which most internal union elections are held in
Mexico in that the leaders of powerful unions are rarely
replaced unless they choose to step down. In Ayala,s case
he can make a convincing argument that the FSTSE has achieved
measurable gains for its members. Moreover, Ayala,s support
for a reform of the federal civil servants health care and
pension benefits systems makes him a rarity among Mexican
labor leaders who seldom (publicly) acknowledge a need to
reduce previously negotiated benefits under any
circumstances. Assuming he can persuade his public service
employees, federation to accept the reforms of the ISSSTE
system, (and as a member of one of Mexico,s two main
opposition parties), he can be a valuable interlocutor on
pension reform and other union topics for the relatively new
government of Mexican President Felipe Calderon.


Visit Mexico City's Classified Web Site at
http://www.state.sgov.gov/p/wha/mexicocity
GARZA

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