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Cablegate: Mexican Labor Unions (Sort of) Unite to Protest

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DE RUEHME #0079/01 0102207
ZNR UUUUU ZZH
R 102207Z JAN 08
FM AMEMBASSY MEXICO
TO RUEHC/SECSTATE WASHDC 0119
RUEHC/DEPT OF LABOR WASHDC
INFO RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE
RUEHXI/LABOR COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHRC/DEPT OF AGRICULTURE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAHLA/DEPT OF HOMELAND SECURITY
RHMFIUU/CDR USSOUTHCOM MIAMI FL
RHEHNSC/NSC WASHDC

UNCLAS SECTION 01 OF 03 MEXICO 000079

SIPDIS

SIPDIS

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

E.O. 12958: N/A
TAGS: ELAB ECON SOCI PGOV PINR MX
SUBJECT: MEXICAN LABOR UNIONS (SORT OF) UNITE TO PROTEST
PRICE HIKES

REF: (A) MEXICO 0013 (B) 07 MEXICO 0391

1. SUMMARY: Many of the factions within Mexico,s
&official8 labor unions recently used the anniversary of a
little known labor event to protest anticipated price hikes
in gasoline and in items considered part of a basic basket of
goods. The unions called on Mexico,s Secretaries of Labor
and Economy to meet with them to determine ways to compel
food producers and merchants to maintain current prices on
basic items. According to the unions, the producers and
merchants are reneging on an agreement with the GOM not to
raise prices. The unions were critical of the Secretary of
Economy for not doing a better job of controlling the costs
of basic items and of the Secretary of Labor for not doing
more to support workers in negotiating the recent increase in
Mexico,s minimum wage (Ref A). The gathering of the various
union factions was a significant event because of who
attended the meeting and who did not. Most media outlets
that covered the event devoted as much attention to the
divisions within Mexico,s organized labor movement as they
did to the call for government action to control prices.
Considering that Mexican unions have been protesting the
expected price rises for several months, when these increases
do take place there is little indication the GOM will react
in any meaningful way to the calls for action from a divided
labor movement closely tied to one of the country,s main
opposition political parties. END SUMMARY.


OFFICIAL UNIONS COMMEMORATE OBSCURE LABOR EVENT
--------------------------------------------- --

2. On January 7, a relatively broad faction of the various
groups that comprise Mexico,s &official8 labor unions
gathered to commemorate the 101 anniversary of the &Martyrs
of Rio Blanco8, one of Mexico,s first organized labor
protests. Rio Blanco, in the southeastern coastal state of
Veracruz, was the site where Mexican workers in a French
owned textile factory (in many ways a precursor of present
day Maquiladora plants) launched a strike to protest low
wages and poor working conditions. The strike was violently
suppressed by the then government of Mexico and since the
country,s revolution the anniversary of the event has become
a symbol of the workers, struggle for social justice.

3. The groups commonly referred to as Mexico,s &official8
unions are labor organizations formally linked to the
country,s former ruling party, the Institutional
Revolutionary Party (PRI). The PRI, many of whose members
continue to see the party as an agent for social justice, is
now one of Mexico,s two main opposition political parties
and the official unions thus very much see themselves as a
part of what would be described in the US as the loyal
opposition. Perhaps because of the significance of the Rio
Blanco incident to Mexico,s &official8 labor unions the
commemoration of this event was used to protest what they
view as a part of a modern day struggle for social justice;
specifically they objected to anticipated price hikes in the
cost of a basic basket of consumer items.


VOLUNTARY AGREEMENTS PERCIEVED AS GOVERNMENT FAILURES
--------------------------------------------- --------

4. For the past few months nearly all of the labor
organizations in Mexico, both the official unions and the
non-official ones, have become increasingly vocal in
expressing their concerns about anticipated price increases.
Numerous producers of essential goods claim that market
conditions are leaving them no other choice. In early 2007
when many sectors blamed price spikes for tortillas and other
basic food items on unscrupulous speculators, the then
recently inaugurated government of President Felipe Calderon
took steps to address the situation. Among the steps taken
were increased food imports and, most significantly, limited
voluntary price caps (Ref B). Now, almost exactly a year
later, producers are increasingly reluctant to hold the line
on what they view as unsustainably low prices.

5. Although the price caps were always clearly labeled as
being limited and non-binding in nature, many in Mexico,s

MEXICO 00000079 002 OF 003


organized labor movement apparently viewed them as long-term
binding agreements between the government and the producers
of essential goods. Now that the producers are signaling
their intention to discontinue compliance with the voluntary
agreements Mexican labor unions have become very critical of
these private sector producers but they are even more
critical of the GOM for failing to enforce price caps. So
far the unions are unwilling to accept that the caps were
limited and voluntary and they are directing particularly
harsh condemnation against Mexico,s Secretary of Economy,
Eduardo Sojo and its Labor Secretary, Javier Lozano.
Secretary Sojo is being condemned for not controlling prices

SIPDIS
and Secretary Lozano is being faulted for not siding with the
labor unions in the recently concluded annual negotiations to
determine Mexico,s minimum wage (Ref A). The unions have
urgently called on the two Secretaries to meet with them to
determine ways to compel food producers and merchants not to
raise the cost of basic items.


LABOR UNITY ( SORT OF
---------------------

6. The 2007 tortilla price rise caused widespread negative
public reaction. Nearly all of the country,s labor unions,
both official and non-official, were equally vocal in
expressing their concern. The official and non-official
unions (which see each other as competitors) did not exactly
work together to protest potential price increase in basic
items but both separately succeeded in getting their members
on the streets to demonstrate and in getting the country,s
media outlets to report on the concerns of the unions and the
general population over consumer price hikes.

7. The perception of unity from 2007 is much less evident
this year. Then, the non-official unions who are closely
tied to Mexico,s main opposition party (Party of the
Democratic Revolution -- PRD), benefited from the support of
and close association with the party,s presidential nominee
who was only narrowly defeated in a highly contested
election. For their part, the official unions used a variety
of methods to express their concerns over anticipated price
hikes. Not all of the official unions worked together. Some
joined the non-official unions in large public demonstrations
while many others quietly but intensely lobbied their
party,s congressional factions to try and stop the coming
price increases.


THAT WAS THEN, THIS IS NOW
--------------------------

8. A great deal has changed since early 2007. After a year
in office, President Calderon,s administration is no longer
as concerned about the non-official unions working with the
defeated PRD presidential candidate to undermine its programs
and policies. More significantly, it can now see that the
official unions are no longer working with the non-official
ones on the issue of price increases. Moreover, in the year
since the last dust up over this issue, the leadership of
many of the official unions has followed the lead of their
political party, the PRI, in trying to work with the Calderon
government whenever possible.

9. In addition, divisions/power struggles between the
leadership of the various unions, federations and
confederations that make up the official unions have
prevented them from working together. As a result the
official unions have not been able to lobby as effectively
against anticipated price increase this year as they did last
year. Many of Mexico,s media outlets that have covered the
official unions, attempts to pressure the GOM into
preventing price increases have focused nearly as much
attention on the divisions between these labor groups as they
have on the issue of price increases themselves.

COMMENT
-------


MEXICO 00000079 003 OF 003


10. If the amount of media attention being devoted to the
subject is an accurate indication, then there is considerable
public concern over the prospect of price increases in the
costs of essential goods. The unions may be one of the more
vocal groups to speak out on this matter but they are not the
only ones. However, the unions and many labor observers in
the media have pointedly underscored the fact that the price
increases everyone knows are coming will be a particularly
hard hit on workers whose wages are at or near the minimum
wage. The recently decreed four per cent increase in the
legal minimum wage in Mexico will not begin to cover the
coming prices increases (Ref A). By most indications the GOM
is genuinely concerned about how to lessen the shock of these
price increases on the poor segments of Mexico,s population.
However, the divisions within Mexico,s labor movement means
that the GOM will not be very hard pressed to take labor,s
views into consideration as it formulates a plan for how to
deal with this situation.

Visit Mexico City's Classified Web Site at
http://www.state.sgov.gov/p/wha/mexicocity and the North American
Partnership Blog at http://www.intelink.gov/communities/state/nap /
GARZA

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