Try competing with $2 an hour labor

Profit Outweighs Risk in Juárez Factories
By JULIÁN AGUILAR
Published: December 11, 2010

In 2009, more than $42 billion in trade value moved through the ports that Ciudad Juárez shares with El Paso, representing 15 percent of the total trade between the United States and Mexico. That number is estimated to be even higher in 2010.

Since June 2009, more than 24,000 manufacturing jobs have been added in Juárez, on the Texas-Mexico border, and the amount of tractor-trailer traffic hauling goods through the region increased by 22 percent from January to June of 2010 compared with the first six months of last year.

At the same time, there were more than 2,600 killings in Juárez in 2009, the byproduct of a battle between the rival Sinaloa and Juárez drug cartels, and the city is on pace to exceed 3,000 homicides in 2010.

So much for the deadening economic impact of headline-making violence. The psychological impact, however, is something different.

While the killings and threats of extortion have forced thousands of retail businesses in Juárez to close and tens of thousands of residents to flee their homes for the safety of Texas, border business experts say the vibrancy of the city’s manufacturing industry is due to what is and has always been the bottom line: money. Not even an unshakeable fear instilled in most of the 1.3 million Juárez residents can curb the success of the factories, or maquiladoras, where assembly-line workers earn, on average, $1.60 to $2 hourly.

“Juárez is open for business,” said Toby M. Spoon, the executive vice president of Tecma, an outsourcing company based in El Paso that will celebrate 25 years in business next year.

A shelter operation that provides factory space, employees and legal expertise to businesses with a manufacturing presence in Mexico, Tecma had one of its best years in 2009, Mr. Spoon said. The company signed five new clients and netted an estimated $45 million in profits.

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Yes, I'm afraid that the profit is worth the risk.  But is the profit interfering with immigration reform or control of the border?  No doubt about it. We want that cheap labor and Mexico wants those remittances. We have an intractable mess of foreign and domestic and economic policy that will take years to sort out.

Meanwhile, wages in the USA are being forced down but expenses are not.  With oil at $91 per barrel, those who still hold jobs in the USA are once again beginning to feel the pinch.  We have an outlook of falling wages, high expenses and economic uncertainty.  So called economic and investment experts are blowing smoke and hot air about the markets and recovery, but does anyone actually know what is happening? I don't think so.

Welcome to the new decade of the new millennium.

Merry Christmas.