- The Effect of Mexican Workforce Migration on the Mexican Maquiladora Labor Market
The Mexican maquiladora is a major source of growth in the Mexican economy.1 Consequently, the maquiladora industry influences the country’s shifting migration patterns, as maquiladoras spread out from their traditional enclave in the north and workers gravitate to maquiladora centers in search of better employment opportunities. This paper measures two forces that act as determinants of the wages and employment of skilled and unskilled workers in Mexican maquiladoras: Mexican interstate labor migration and international return labor migration.2 We examine the impacts of these two forces for a low-value-added sector of the Mexican maquiladora industry, which should be particularly sensitive to wage changes. We then speculate on the ability of Mexican workers to withstand competition from lower-wage Chinese workers.
New migration patterns developed in Mexico in the 1990s. Urban-to-urban migration supplanted the earlier phenomenon of rural-to-urban migration, a process the National Population Council (CONAPO) termed the new geography of migration. In addition, industrialized centers developed in the central and southern states as the maquiladoras shifted from their historic northern geographic locations. For example, from 1990 to 2000, maquiladora [End Page 179] textile employment grew by 145 percent in the border regions, compared with 918 percent in the nonborder regions. Consequently, the border region’s share of textile employment fell from 49 percent in 1990 to 17 percent in 2000.3
The majority of maquiladora employees are interstate migrants. Fernández-Kelly finds that 70 percent of the maquiladora workers in her sample are so classified.4 In a similar study, Young and Fort report on interviews of 1,246 women in the labor force in Ciudad Juarez, Mexico.5 Of these, 46 percent were employed in the maquiladoras, 26 percent in commerce, 20 percent in services, and 8 percent in a variety of other industrial sectors. The authors conclude that the maquiladora workers were more likely to have migrated to Ciudad Juarez than were the women working in other industries (72 percent versus 43 percent). Of the maquiladora workers, 82 percent were interstate migrants, almost double the 45 percent share of non-maquiladora workers.
A study of migration patterns and their impact on the wages and employment of maquiladora workers is timely, given that numerous U.S. firms have left Mexico in the last few years and relocated to China. This exit is commonly attributed to relatively higher wages in Mexico vis-à-vis China.6 However, interstate migration in pursuit of employment in manufacturing assembly plants can either reduce or increase the market wage for unskilled and skilled workers, depending on a number of factors. Immigration should shift labor supply. If immigration occurs without an increase in the turnover rate, the labor supply will shift right as a result of the increase of workers in a given skill category. This causes the equilibrium wage to fall. Immigration could shift the labor supply to the left, however, if immigrants exhibit high turnover rates. Two patterns of employment that have been traced to internal migration in Mexico may increase turnover and hence employers’ costs. First, maquiladoras absorb workers in transit to the United States. Second, they employ young, inexperienced females and males from rural areas. Therefore, the assembly plant’s labor pool is largely composed of individuals with a high tendency to switch jobs, migrate to the United States, or, in the case of women, exit the labor market for childbearing. Picou and Peluchon estimate that the annual turnover rate in the maquiladoras routinely exceeds 100 percent.7 Sargent argues that high turnover not only imposes significant personnel costs, but also inhibits the [End Page 180] installation of sophisticated manufacturing facilities that demand substantial worker training.8 Higher turnover rates will shift the labor supply curve to the left, and the equilibrium wage will rise.
Borjas, Freeman, and Katz, as well as Card, address the issue of how an influx of immigrants can lead to an outflow of natives.9 In theory, if the native labor supply curve is upward sloping or perfectly inelastic, then an influx of immigrants would decrease the supply of native...