The Fallacy of CAFTA and Maquilas as Cure-Alls
for Salvadoran Migration
Leading up to the U.S. Congressional vote
on the Central American Free Trade Agreement
(CAFTA) last July, many CAFTA supporters explained
their stance by claiming the pact would decrease
the amount of undocumented immigration to the
United States. According to the argument, free
trade would help industries develop throughout
Central America so that more people would want
to remain to explore job opportunities in the
region, instead of opting for migration to the
U.S. This argument was used particularly in
the case of El Salvador, where out of a population
of 6.5 million, approximately 2 million already
live and work in the U.S. With such a large
percentage of the population working in the
U.S., remittances (money earned in the U.S.
which is sent back to El Salvador) have increased
steadily in the last decade and reached an all-time
high of $12.5 billion in 2004, which is approximately
17.1% of the Salvadoran Gross Domestic Product
(GDP).
The argument, however, does not hold up under
the lens of experience. One major oversight
is that the creation of new jobs does not necessarily
mean the creation of better jobs. Instead, most
new jobs will be found in export processing
factories, or maquilas, where companies use
Central American workers as a source of cheap
labor. These jobs will not effectively lessen
poverty in El Salvador, since the jobs are not
available to all Salvadorans: the maquilas generally
only hire women. Moreover, maquilas are located
in specific zones of the country, so women have
and will be forced to migrate to work. Even
with an increase in female employment within
the maquila sector, the new jobs will not decrease
the poverty rate: they do not combat male unemployment,
provide wages to support the cost of living,
or contribute to reducing the wage disparity
between U.S. and Central American workers.
Furthermore, in order for immigration to decrease
substantially, the jobs created in Central America
would need to offer wages that allow families
to purchase the basic goods needed for daily
living, and keep up with price increases following
dollarization in 2001. However, dollarization
did not help increase the standard of living
or increase the wages. As a result, Salvadoran
workers are still paid the equivalent to what
they earned in colones, but buy goods in dollars-or
the equivalent to U.S. prices, creating a gap
between earnings and the cost of basic goods
to sustain daily life in El Salvador. Until
this disparity can be reduced, the appeal of
immigration from Central America to the U.S.
will continue.
The creation of new jobs also does not mean
the continuation of preexisting jobs. A similar
argument was used by supporters of the North
American Free Trade Agreement (NAFTA) in the
early 1990s, claiming that free trade between
the U.S. and Mexico would decrease the number
of undocumented immigrants from Mexico. So far,
this has not proven to be the case. In fact,
an influx of immigration immediately after the
implementation of NAFTA is attributed to job
losses across the rural sector, especially in
corn production. Before NAFTA, there were over
3 million Mexican corn producers, whose crops
were not only sold for income, but were also
consumed as a vital portion of their families’
diets. Since NAFTA, however, the price of corn
has fallen by more than 70% due to U.S. imports.
As a result, small farmers have been forced
to give up or sell their farms and look for
jobs in other industries outside their home
communities. If El Salvador follows the same
pattern as Mexico, the effects will be devastating,
since 34% of Salvadoran men are currently employed
in the agricultural sector. Since the new jobs
created by CAFTA will largely be in maquilas,
staffed by women, the newly unemployed men will
be unable to find employment, and be forced
to migrate to the cities or the U.S. to find
work.
CAFTA does not include the necessary mechanisms
to decrease immigration. In order for a decrease
to occur, the agreement would need to include
support for labor unions, minimal working conditions,
and the Central American agricultural sector,
which cannot compete with that of the highly
mechanized U.S. Migration to the U.S. will continue
to increase with CAFTA in place; in fact, immigration
will continue until sustainable development
allows for a real closing of the gap between
standards of living in the U.S. and Central
America and the ability of Salvadorans to afford
the cost of living in their country.
Sources
United Nations Development Report 2005, http://www.desarrollohumano.org.sv/migraciones//content/blogsection/4/6/.
Wikipedia: El Salvador http://en.wikipedia.org/wiki/El_Salvador.
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