Why Mexican unions lost power: Globalization, intra-elite conflict and shifting state alliances

Abstract

This study explains why, beginning in 1976 and continuing into the 1980s, unions lost power in Mexico. The recent loss of power in Mexico is consistent with a worldwide convergence towards declining union power. Few would dispute that declining union power is related to globalization. But how does globalization affect union power? This study demonstrates that the prevailing approach to globalization and union power, the market pressures approach, cannot explain why labor unions lost power in Mexico. This suggests that in countries, such as Mexico, where unions rely on political support rather than organizational resources to attain power, increased exposure to market pressures may not explain declining union power. Only unions in advanced industrial societies enjoy the market conditions that make it possible to gain power via their organizational resources. I propose that, in countries where organized labor derives its power from its relationship to the state, globalization affects union power via the domestic instantiations of globalization. The way that global economic shocks and the interests of foreign investors shape the interests of domestic economic elite constitute the domestic instantiations of globalization. My approach builds on the International Political Economy research tradition. This study shows that labor lost power in Mexico for two nested reasons. First, labor lost power because it lost access to decision-making in the state. Second, labor lost access to decision-making because global economic crisis and new foreign investment strategies created a new internationalist elite oriented towards foreign credit and global markets. Disillusioned with the existing political leadership and their "national" economic project, the internationalist elite promoted the rise to power of new political leaders that favored neoliberal economic reforms. Bureaucrats, allied with the internationalists, undermined labor along with other advocates of the "national" project, as part of a struggle for power. This study delineates the aspect of the state-labor alliance in Mexico that granted labor unions power historically and reveals the importance of globalization in determining labor's recent fate in Mexico. It contributes a new model of globalization and union power, raising questions about how sociologists conceptualize globalization and state-society relations more generally.