Informal Workers in Oaxaca, Mexico
As a developing economy closely linked to the USA, Mexico felt the warning symptoms of the economic crisis before its late 2008 onset. But what was unexpected, and dealt a double blow to the Mexican economy, was the outbreak of the H1N1 virus – what the media called the “Mexican” swine flu. The images that started appearing in the media in April 2009 – including fearful Mexicans in facemasks – had far-reaching economic effects in Mexico, where tourism represented 8.7 per cent of the GDP and employed over one million people formally and an unknown number informally (INEGI, National Institute of Statistics, Geography and Informatics 2006).
The worldwide warnings associated with the H1N1 flu outbreak resulted in dire economic effects for both formal and informal workers in the tourism sector. Oaxaca, in particular, contributes 16.2 per cent of Mexico’s GDP (INEGI 2006) in tourism and many informal workers depend on selling their art, products and services to foreign tourists.
In March 2009, shortly before the flu outbreak, in partnership with activists from the Self-Employed Women’s Association (SEWA) in India and economists at Cornell University, the WIEGO network organized the fourth in a series of Exposure Dialogues in Oaxaca, Mexico. The Exposure Dialogue group spent two days and two nights living and working alongside informal workers and their families. The local hosts included a baker, a brick-maker, firework makers, pottery-makers, tin artisans, and weavers.
What follows are personal accounts, based on phone interviews, of the impact of the twin crises on some of the local hosts in Oaxaca.
Struggling Through Declines in Tourism - Aida, Tin Craft Artisan, Oaxaca, Mexico
Aida is 40 years old. Although she holds a Bachelors degree in Business Administration, she was been working with her husband making tin handicrafts in Oaxaca for a few decades now.
Her husband’s hands tell the story of hard work, creativity and persistence. With the help of their three children and Aurora, a university student who rents a room from them and helps the family paint the tin crafts, they were getting ahead. They were selling their products in Oaxaca and working on some orders they had received from exporters.
But now Alan, the oldest of Aida’s children, has moved far away to attend university, and Aurora is moving to a different town. The business will reflect this loss of help, plus there will be additional expenses for Alan’s education, and the loss of revenue that Aurora brought as a tenant.
In March 2009, they were making tin craft for individual clients, a shop, and a government museum. They were able to hire two people to help in the workshop, who would stay with them the whole day. Aida feeds them breakfast and lunch.. In June 2009, they were still charging the same prices as in March – but they are struggling because they are not receiving what they are owed.
“We have to worry about payment to employees, paying the bills such as electricity and telephone. We pay more for the telephone service as we need to call clients because they don’t pay, and we have to keep reminding them. For example, the government’s museum hasn’t issued our payment for three months and we are calling them every day to get information. We also need to pay more for electricity as we work until very late at night. We have made more tin models, with the hope of having good sales,” Aida explains.
“Sometimes I think our employees are the ones making the gains, because they do not buy equipment, or pay for the costs of producing the crafts, and yet they earn a salary for their work without spending money on anything else. We haven’t seen any gains as our gains are currently stored as pieces of tin crafts and we have the hope that one day a client will take them and we’ll get some money.”
Oaxaca is heavily dependent on foreign tourism. Since the H1N1 flu outbreak and the economic crisis, many stores have closed down and there are no sales or tourism in the city. “There are other vendors selling in the few remaining stores at very low prices. They were probably working abroad before, saving money so they could come back here and start a business.”
By October 2009, materials (such as in, paint, thinner, lacquer, brushes, paintbrushes, gas welding, packaging) have become more expensive but the products sell at the same price. Payments continue to be delayed from the government museum that closed temporarily due to protests in downtown Oaxaca.
“The museum doesn’t want to pay because they had to close due to the blocked streets… They paid me in September what was owed for June – no payments since then. With the store that I sell to, it’s the same story, even worse. They don’t pay me because they don’t have tourists. We have had a really, really tough time. There is so much competition from other artisans and many of them are simply exchanging their work for something to eat.”
Things had not improved much by June 2010. The family was still making tin craft with the help of two hired workers. Some bulk orders had come in since January from traders who began to export tin craft after the decline in tourism. Production for export has not increased their earnings significantly but has increased their working hours.
“We have not been able to increase the price of our products, and our costs keep increasing … I keep worrying about the type of life we give to our children because it is not fair! We can’t go out or on vacations, the children should be playing outside with their friends but, instead, they are here working, painting, cutting sheets of tin or making the grapas(staples that hold together several sheets of tin). I can’t complain because the children are very understanding; when they come home from school, they don’t even ask me what to do. They just start working.”
Brick-Maker: wife intermittently sells tortillas or roasted corn, earning around 30 pesos per day
- March 2009: making bricks @ 1100-1300 pesos per 1000
- June 2009: clearing land for construction projects + building poultry and pig sheds at local farms
- October 2009: making bricks @ 750-850 pesos per 1000 + planning to start making thinner bricks, which sell for higher prices
“I have a big pile of bricks lying [unsold] in the front of my house. The bricks have gone down in price, but the price of materials is still the same. I know where to find good and cheap materials, and that is why I do OK. We eat chilies, beans, and vegetables – we do not eat meat and never have, and that is why we don’t feel a difference.
“Everyone around is complaining that there is no money, and then you see many construction sites left unfinished because there is no money to finish the projects. It is very bad, many people have no work.”
- November 2009: working in a construction company loading and unloading materials as brick prices and sales had dropped
- June 2010: making bricks @ 750 pesos per 1000 + working longer hours
“Since the famous crisis, things have been really bad…The price of brick has gone down and many businesses are selling bricks at really low prices and we have seen lots of competition. Many people have gone to the US to find work because here in Oaxaca you don’t find opportunities… The price of raw materials is the same. What has changed has been the price of the finished bricks… What has really changed is the amount of work (i.e. demand for bricks)… When will this crisis end? The situation in Mexico is very difficult, and crime has made things worse. Every day I wake up in the morning and pray to God to have mercy on all of us.”
Pottery Makers: husband and wife team
- March 2009: making pottery (son had recently lost job in a craft shop and joined his parents in making pottery) + planning to build a new kiln to fire pottery with lead-free glaze
- June 2009: making pottery for same prices as in March – but fewer sales – slim profits re-invested in business
- October 2009: making pottery but fewer sales and lower prices – little (if any) profit
“We have not sold enough products. There is no comparison to past years. This year, sales are very low, tourism dropped tremendously… We live off tortillas, beans, and rice. Sometimes our daughters-in-law bring some vegetables from the markets and that is how we survive, day after day.”
- June 2010: making pottery (son rehired by craft shop but on part-time basis and for half his earlier salary) for the same prices as a year ago – but stock of clay purchased before the crisis is running out
“We are making the same products. Sometimes we see the volume of sales drop but we can’t increase our prices because everyone has piles of the same products which they are selling at very low prices. Sales are low and tourism has also dropped… Last year we had lots of clay stored as I always made sure to spend some of my earnings to buy it, but this year things will change as we are running out of everything and we will have to add the cost of clay to our business expenses… But we are confident that things will improve because the government is currently working on a new, very beautiful archaeological site two kilometers away… We are sure it will attract tourists.”