Chapter Seven:
Boom in the Midst of the Bust: Well-Being in Tijuana
René M. Zenteno Quintero & Rodolfo Cruz Pineiro
Chapter Seven: |
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Introduction
Although certain macroeconomic indicators have been used to illustrate that the Mexican economic crisis began prior to the crucial events of 1982,[1] it is also true that the past decade will be remembered as one of the most critical periods of the economic history of Mexico.
One of the differences between the 1980's economic crisis and earlier ones is that unlike earlier economic downturns, the crisis of the eighties compelled the radical transformation of national policies of economic and social development, and led to the negotiation and signing of a free trade agreement between Mexico, United States and Canada. The social and economic dimensions of this transformation need detailed study at the national level. What has been overlooked, however, is the impact that the crisis had on Mexico's different regions.
Impact of the Crisis on the Regions.
In this chapter we will not analyze the impact of the crisis on the rural areas of Mexico, since acute problems in the rural economy and the difficult social and economic conditions of the countryside have been going on for much longer than one decade. In addition, it has not been until very recently that radical policies to transform rural Mexico have been instituted, and the effects of the two most important, the modification of Article 27 of the Constitution to permit the privatization of the ejido, and the free trade agreement with the U.S. and Canada are still too recent for their effects to have taken hold or to be known. The Mexican economic crisis of the eighties affected the cities and their populations, and this chapter concentrates on them.
From the detailed study of the most important social and economic indicators that define the crisis, or recession,[2] one can see that those cities were the most affected whose economies were most dependent on manufacturing the development of which had been based on the protectionist policies of the import-substitution model, as well as on the industrial growth policies of the Mexican state. Most of our information shows that the 1980's economic crisis most affected the three most important Mexican metropolitan areas (Mexico City, Monterrey and Guadalajara) [3]. Surprisingly there are not a great number of case studies of cities where manufacturing has not been the engine of development, economies, and few enough studies of different regions of Mexico. And it is important to take regional differences into account when trying to extend the analysis of the crisis from the national to the regional level, and particularly to regions whose economic structures have historically developed based on a logic of capital accumulation and model of consumption rather different from the rest of Mexico. This is the case of the border region of Baja California and of its main urban center: Tijuana.
During the last decade, the economy of Tijuana overcame the relative economic stagnation it experienced during the seventies. During the 1980s, when the rest of Mexico was "in crisis", it entered upon the most important boom of its history. This does not mean that the economic crisis and the austerity policies outlined by the Mexican government did not have negative effects upon the economy and population of Tijuana, rather that, while the national and border economic policies during the seventies had restrained growth in this region, important changes in these policies during the 1980s made possible the improvement of Tijuana's economy by enabling it to take advantage of the border location during the period when most of the rest of the nation was in full recession.
In our discussion of Tijuana in the 1980s, we want to show the following:
* we illustrate how the interaction between national and regional
economic policies produced discrepant economic outcomes in Tijuana during the
last two decades,
* second, we show how the economic boom of Tijuana had positive effects,
reflected in increased incomes for both individuals and households, and, at
the same time, we show how increased income has to be viewed relative to other
social indicators, given the particular situation of the city,
* third, we show that the relative attractiveness of Tijuana was
correlated with increased migration to this border city, in line with the fact
that Sinaloa replaced Jalisco as the most important place of origin of this
immigration,
* and finally, we show that, although the population of Tijuana enjoys
higher salaries than other national urban centers, it still suffers from
considerable backwardness in terms of other living standards such as housing
conditions.
Development and Economic Growth of Tijuana: Regional and National Interaction
Before commenting on the development and economic growth of Tijuana during the last two decades, a brief understanding of the economic history of this border city is necessary. For its first years of existence, Tijuana was completely dependent on the United States, and not at all economically integrated with the rest of Mexico. This period of isolation did not end until the 1930's. As Piñeira (1985:169) has pointed out, the history of Tijuana during this period was a period during which Tijuana did not have an independent existence but was dependent on the political economy of the American state of California.
Tourist services for the population of southern California were the first important economic activities in the city. The passing of the "Volstead Act" (1919) in the United States, which prohibited the production and sale of alcoholic beverages, produced a great deal of economic growth of the Mexican border cities, and resulted in the well known "golden period" of tourism in Tijuana.[4] However, the repeal of prohibition in 1933 drastically changed its situation. A large majority of the businesses that had been based on U.S. prohibition (liquor stores, bars, casinos, etc.) moved back to the United States, which greatly increased unemployment. At the same time the economic crisis was became worse because the area could not produce enough to satisfy its needs and the distances and isolation from the rest of Mexico produced acute shortages.
The isolation problem was alleviated by the Mexican government's establishment of the Perímetros Libres Experimentales (Provisional Free Trade Zones) for Tijuana and Ensenada in 1933. Under this law merchandise could be imported duty free if it was consumed or used within the zone. This initiative provided a basis for the development of commercial activities in Tijuana. Prior to the establishment of a free zone, the inhabitants of Tijuana had to buy food, clothes and other goods from the American border city of San Ysidro and smuggle them across the border. The free zone act allowed people to buy cheap, good quality products not only from Asia and Europe in Tijuana, but also American merchandise cheaper than in the USA. In 1937, the privileges of this custom system were renewed with the creation of the "Baja California Duty-Free Zone" for a ten year period. The duty-free regime has been renewed several times since and it is currently in effect.
The structure of economic development during the first fifty years of Tijuana is reflected in the distribution of its economically active population in different sectors of the economy. By 1940 the population census showed the importance of the service sector in the city's economy , with 45% of the economically active age group employed in the sector while 23% were working in commerce (Zenteno, 1992).
The second important period in the modern history of Tijuana, as well as in the Mexican northern border as a whole, was the period of the bracero program (1942-1964). American entry into World War II (1941-45) required the construction of an important military base in San Diego for the Pacific campaign. The economic activity generated by the base combined with the wartime growth of the American economy and of southern California, led to explosive population growth in Tijuana and its emergence as an important urban center. Tijuana benefited from a large increase in American tourism, largely of naval personnel waiting to go to the war, or returning from it. As well, the U.S. need for labor in order to sustain economic and military production led to the signing of a series of agreements between the governments of Mexico and United States (known as the bracero program), in order to provide Mexican labor to the U.S. economy.[5]
The bracero program was key to the population growth of Tijuana and other border municipalities. The expectation of being hired in a labor market at higher wages produced explosive migration flows northwards.[6] Furthermore, many Mexican workers, once hired to work in the United States, had their families move to the Mexican border cities to live there while they were in the U.S.[7]
The rapid increase in the population of Tijuana (and the rest of Baja California) resulted in the enlargement of the regional market on the Mexican side. Baja Californian entrepreneurs, who had experienced financial success during the Prohibition period and during the following commercial boom, began to invest in manufacturing to substitute for American imports, as well as exporting to the US. Fiscal advantages granted to "duty-free zones" permitted the importation of capital goods and raw materials. Thus, between 1940 and 1950, the economically active population employed in the manufacturing sector of Tijuana doubled, and manufacturing became as important as commerce. Also significant was the increase of the number of workers in the construction industry during this period. At the same time services continued to be the most important branch in the economic structure of Tijuana (Zenteno, 1992).
The Failed Integration
The Bracero Program, which had permitted the legal hiring of thousands of Mexican workers in the U.S. labor market, ended in 1964, signaling the beginning of important changes for Tijuana and the rest of the Mexican northern border. Thousands of Mexican workers had to return to Mexico due to lack of employment opportunities in the USA, just as they had been obliged to during the time of the great depression. Some cities along the Mexican border increased their population because of the returnees.[8] But the economy of the border cities was incapable of absorbing this labor, in spite of the fact that many Mexicans continued to work in the United States.[9] The Mexican government was obliged to consider alternative policies to stimulate the development of the northern border, and at the same time achieve a greater integration of the border economy with the rest of Mexico. Political and policy attention was directed at the border and a spate of new policies emerged in the hopes of satisfying the needs of the border population at the same time as increasing its integration with the rest of Mexico.
The most important federal policy was the "Border Industrialization Program" (BIP) which was put into effect in 1965. The BIP was a project for the utilization of the unemployed labor force along the border.[10] The program enabled all "duty-free zones and perimeter areas" to import raw materials and capital goods with no restrictions, and to create enterprises with 100% foreign capital, if and only if all products were exported. Given the advantages which the border region already enjoyed, and given the advantageous customs policies of the USA, the BIP brought a surge of international capital investment to the Mexican Northern border region.[11] In this way the maquiladora export industries in the main border cities were born.[12]
Tijuana had one hundred maquiladora establishments in 1974 (see Table 1). The started fast but languished in the seventies. The number of jobs created by the maquiladora export industries in Tijuana grew only 17% from 1974 to 1979; that is, it only contributed 1,600 job opportunities during this period after having generated 9,000 during the eight years prior to 1974. The cause was the American economic recession which took place in the mid-seventies, and forced several maquiladoras to close down.[13] Furthermore, the Mexican economic policy of overvaluing its currency was maintained almost throughout the 1970-1980 decade, which increased the dollar value of Mexican wages and stopped the Mexican labor force from being as attractive in the world market. This policy of overvaluing the currency, as will be seen later, had serious implications in the economic development of Tijuana.[14]
Border development aimed at economic development outside of the maquiladora sector were not very successful either in Tijuana or in Baja California as a whole. The growth which manufacturing had experienced prior to BID during the 1940's and 1950's abated in the sixties and seventies. One of the principal problems had to do with the assumption of the border industrialization program that region had no industrial infrastructure or activity, which was simply untrue. Baja Californian industrialization had started many years before. In fact, by 1970, Baja California had 60% of the total border manufacturing production, while having only 36% of the border population, according to the data of the Secretaría de Industria y Comercio (Alonso, 1988:101).
Ignoring these differences between the interior of the border region and the conditions on the frontier in the free zone, meant that the subsequent measures taken to stimulate other industrial areas of the Northern border, namely, the decree of March 15th, 1974, was nothing more than the ratification of privileges formerly granted to the duty-free zones which permitted the customs-free imports of capital goods and raw materials.[15] The same decree also established strong restrictions on the industrialization of the border as Jorge Alonso (1988:100) mentions:
...besides "granting" privileges already in effect under the status of "free zones", it denied the privileges enjoyed by industry in the rest of the county, and did not formally allow border industries to develop production facilities or make sales in the interior of the country. It seems this decree was meant to protect the industry in the interior, rather than to stimulate non-maquiladora border industrialization.
Another important structural element that explains the low level of economic activity in Baja California was the overvalued peso during most of the seventies. The peso-dollar exchange rate is important for the duty-free zone, since it is the fundamental factor regulating the flow of goods and capital to and from abroad. The policy of overvaluing the Mexican currency had a significant restraining effect on the development of the non-maquiladora industry of Baja California, because the policy guaranteed greater comparative advantage to both durable and non-durable goods produced in the United States whose costs were comparatively cheap.[16] Although overvaluation was beneficial to the border consumers (and also to many in the interior of the country) who could acquire cheaper and often higher quality goods and services in the U.S. market, it failed to motivate trade and industrial investment along the border; even less in the economy of Tijuana where restrictions on imports of goods have been almost nonexistent.
The Border Commercialization Program (BCP, 1971), like the policies designed to stimulate border industry, failed to innovate or stimulate the economy of Tijuana. Tax exemptions on imports which had been reserved for commercial establishments were extended to the entire population. The program had two objectives. First, to increase the number of commercial establishments and as well as employment in the border cities by making commerce in foreign products attractive and profitable. Second, to increase the presence of national goods in the border markets by insisting on a peso's sales of Mexican goods for every peso sale of imported goods, thus building a modern commercial sector in the border.[17] But the duty-free zone of Tijuana was not obliged to sell Mexican goods, and so could carry on as before. Local entrepreneurs did not find real motivation for greater economic activity because of the BCP, although they did take advantage of the measures aimed at aiding the construction, enlargement and operation of shopping centers.[18]
Overall, the seventies were not one of the best periods for the economy of Tijuana. The local economy, like that of the rest of Baja California, was comparatively stagnant relative to the boom in the nation as a whole; economic growth, and did not grow as quickly as it had during the previous twenty years. As Alonso states (1988:65)
From the review of the available information it seems that the economy of Baja California found itself in a real impasse in the seventies, in an unusual downturn in economic activity. A sectoral breakdown of the gross domestic product shows that the growth rates in those most important for economic growth [commerce and manufacturing] were lower on the border than they were in the country as a whole.[19]
The Failure of National Integration
Paradoxically, at the same time that Mexico experienced the deepest economic crisis of its post-revolutionary life, Tijuana experienced perhaps the strongest economic boom of its history. The strategic geographical location of Tijuana, the change in the model of industrial development, from import substitution to export led growth, the privileges granted by the special customs regime of the area, and the fixing of a more realistic exchange rate for the Mexican currency, are the more important elements that enabled the economic transformation of Tijuana.[20] Raúl Fernández (1989:39) has described the situation:
...the country's gross domestic product had contracted by 3.7 percent during 1986. Nevertheless, one city in the border was a showcase of growth. Tijuana's economy expanded by 7 percent in 1986 and boasted a one percent unemployment rate. Attracted by the relative cheapness of labor, border industry has continued to boom, attracting international capital not only from the United States but from Japan, Spain, and other European countries. The growth in industry, coupled with the low rate of unemployment and increased tourism, has led to a construction boom as well. There has been high demand for offices, factories, and warehouses, as well as luxury residences for entrepreneurs arriving from Mexico City, Guadalajara and Monterrey.
Tijuana had its problems at the beginning of the eighties stemming from macroeconomic instability in the years 1982-83 because of the drastic devaluation of the peso, but despite this has turned into one of the nation's most economically dynamic urban centers. It became an excellent platform for the new export-led growth model and the opening of the economy that the Mexican government has instituted in order to overcome the crisis. The maquiladora export industries grew during the 1980's at rates never seen before (Table 1). The number of maquiladoras quadrupled between 1980 and 1990, and jobs in this industry increased 5.3 times in the same period. The maquiladora sector generated a little more than 65 thousand jobs in Tijuana by 1990. In 1987, Tijuana was ranked as the most important Mexican municipality in number of maquiladora establishments (27% of the total), followed by Ciudad Juarez (18%). (Nevertheless, Ciudad Juarez employed 33% of the labor engaged in the maquiladora export industries in Mexico, while Tijuana had only 12% (Grupo Bermúdez, 1987).
Although low salaries have been a relevant factor for the international subcontracting of Mexican labor, recent research has shown that it is not as important as previously believed in international firm location decisions. Factors associated with international competition have been playing a relevant role in location decisions of maquiladoras in the last ten years. Ramírez and González Aréchiga (1989) have underscored the importance of four factors in the development of high technology industry. These are: 1) the increasing use of flexible technology by the major enterprises of the United States, Japan, Europe and Korea which gives offshore manufacturers flexibility of choice in the location of production sites; 2) location decisions made for the purposes of market entry and development; 3) the attitude of national governments, particularly in the way in which they extend protectionist privileges or subsidies to national companies because of their own priorities, as for example for military projects; and 4) the growing importance of economies of scale achieved through the centralization of suppliers and the use of flexible technologies (Ramirez and González Aréchiga, 1989:9-10).
The more realistic Mexican policy on currency exchange rates has resulted in the decline of demand for American goods and services along the border, and an increase in sale of Mexican goods. Moreover, the economic crisis has produced a contraction of local demand inland, and encouraged the producers of Mexican goods to search for overlooked markets on the border, which has had the effect of expanding the commercial and service sectors there.[21] From 1980 to 1986, more than 6,000 commercial establishments and nearly 9,000 service businesses were opened in Tijuana (COPLADE, 1987).
These circumstances explain the low level of open unemployment in Tijuana (Table 2), including during the years of the greatest economic downturn in the rest of the country such as in 1986. The highest level of open unemployment of the work force in Tijuana during the second part of the eighties was 2.6% in 1985, a level which neither Monterrey nor Mexico City had reached by 1990 (where the lowest open unemployment rates recorded in these two cities were 3.2% and 2.8% respectively).[22] This does not mean that obtaining employment is easy in the labor market of Tijuana, since the level of open unemployment of the most recent cohort of male immigrants in Tijuana, in 1986, was 7% (Zenteno, 1992).
According to data from the Encuesta Socioeconómica Anual de la Frontera Norte (COLEF, 1987), 26% of the economically active population was employed by the secondary sector (maquiladoras, manufacturing and construction) in 1987. It is interesting to note the high proportion of women employed in the maquiladora industry (one out of every five females). The high degree of tertiarization of the urban economy of Tijuana is represented by the fact that 25.9% and 44.6% of the economically active age group is employed by the commercial and service sectors respectively. The same survey notes fairly high growth in the construction sector in recent years, which is as important an employment source as the maquiladoras.
Monthly income measures, obtained by analyzing the wages of the principal occupations of the labor force participants, illustrate the economic advantages of living in Tijuana (Table 3). The incomes of the inhabitants of Tijuana, many of whom work in the U.S., average a little more than three minimum salaries in 1989, equivalent to $345.40 (U.S.) monthly. This was 20% higher than in Ciudad Juarez, and 58% higher than in Mexico City.
Table 3 also shows that wage difference in the lower income groups between Tijuana and the rest of cities is not as clear. Conditions of extreme poverty are almost as severe and prevalent in Tijuana as in the rest of the cities considered in the analysis. However, the top three quartiles show the advantages of living in Tijuana particularly the wage advantage, since the top quartile of the economically active age group of Tijuana earned at least $414.40 (U.S.). The lower bound of the income of the top quartile in Mexico City, by way of contrast, was Tijuana's median.
There is an irony here: for more than forty years the political rhetoric of the center was aimed at integrating the isolated border region into the national development scheme. But, many of the federal policies designed with this purpose in mind ended up isolating the region and slowing economic growth. Surprisingly, today everything seems to indicate that the conditions of development that characterized the "disintegrated" border region for many decades, turned out to foreshadow the new road to urban development in the whole country.
II. Households, Incomes and Employment: the Binational Factor.
The high incomes of the economically active age group of Tijuana reflect the capacity of its population to capitalize on the advantages offered by the labor market of the other side of the border. Although the economy of Tijuana has substantially improved in the last years, a significant part of household incomes continues to depend on employment in the United States. To illustrate the magnitude of this and other situations, the households of Tijuana were stratified in four income groups (Table 4)[23].
Wages per worker of the household with at least one economically active member in Tijuana was $648.80 (U.S.) per month in 1989. The difference between the household incomes of the lowest and highest stratum was $975.10 (U.S.). The high average household income in the fourth quartile, at $1,241,6 (U.S.) per month, explains the high overall average household income in Tijuana. The top quartile in Tijuana earns, on average, twice as much as the third quartile.
As can be seen in Table 4, high incomes are positively correlated with employment in the United States. According to the data from the Encuesta Nacional de Empleo Urbano (ENEU), 13% of the households in Tijuana include at least one worker who works in the United States, and these workers generate 18% of the wage income of the households. Only 4% of the households in the two lowest strata have a member working in the United States, and these workers contribute little to the household (approximately 2% of the household's income), while 31% of the households in the top quartile have a member working in the U.S. and they contribute 31% of the income.
Employment in the United States is important not just for the survival of households in Tijuana, but also to enable them to earn higher incomes; but there are other characteristics of the better off households that bear mentioning. Table 4 includes some relevant data. One may note that the lowest and the highest quartiles show the highest percentages of households where a members works more than 48 hours a week (20% in the first quartile and 21% in the fourth quartile)[24]. It seems fair to conclude that the workers in the better off households are induced into the work force to increase their standard of living with those of the lowest quartile are driven into it to make ends meet, a phenomenon that is not dissimilar to what González de la Rocha (this volume), Kim (1987) and García and Oliveira (this volume) have found for the female work force in urban Mexico before and during the crisis respectively.
Another indicator that reflects a certain backwardness in the living conditions of Tijuana is the low percentage of the work force with social security: the data of the ENEU shows that 55% of the economically active age group of Tijuana does not receive IMSS, ISSSTE or private medical insurance[25]. Surprisingly, the lack of social security does not seem to be a characteristic related exclusively to low income, since 66% of the households with higher incomes are included in the high percentage of the economically active age group without social security. This is very difficult to explain because no other urban center of the ENEU for which we have this data shows such high percentages. A possible explanation is that the high proportion of economically active age group that works in the United States has social security on neither side of the border, or may have it in the US, but does not know about it. Still, high frequencies of employment in the United States are not sufficient to explain the low frequencies in Tijuana.
One last characteristic of Tijuana households needs to be mentioned: the high prevalence of female headed households among poorer quartiles (cf. Glaser, 1987; Rosenhouse, 1989; Chant, 1991, Selby et al. 1990, 1994 and this volume). As can be seen in Table 4, Tijuana is not an exception, for example, as household income decreases, the percentage of female headed household increases: looking at those households below the median on household income, 22% of the households in the strata of lowest quartile had a female household head; as did almost one of every four households in the second quartile, twice the rate of the third and fourth quartiles.
III. Change in Patterns of Immigration to Tijuana.
Starting in the 1930s, migration has been the most important factor affecting population growth in Tijuana. From 1940 to 1970 immigration to the city was at its highest, and population changes were very sensitive to changes in U.S. policies on immigration particularly the signing and the subsequent cancellation of the bracero agreement between Mexico and the United States.
The difference in wages, living conditions and social circumstances affected rates of emigration to the United States, and since Tijuana is the principal point of border crossings, it has become increasingly attractive as a jumping-off site for Mexicans wishing to enter the U.S.. Mexicans of the interior have come to Tijuana in increasing numbers in the past decade. A previous analysis showed that immigration to Tijuana increased during 1980-1986, after a decrease during the previous decade (Zenteno, 1992). In the same study we pointed out that the replacement of Jalisco by Sinaloa as the most important state place of birth and origin of immigration had taken place because of changing economic circumstances. Now, census data of 1990 (INEGI, 1992) clearly reflect the impact of this new pattern of immigration in Tijuana: 23% of the population of five years and older residing in Tijuana in 1990 did not reside in Baja California in 1985. This figure is almost double the figure for immigration in Ciudad Juarez (12.2%)[26]. The relative popularity of Tijuana as a destination suggests that the city has more to offer immigrants besides maquiladora employment, as is the case for Ciudad Juarez. This extra attractiveness is, presumably, the prospect of employment in California.[27]
Data to show that the patterns of emigration to Tijuana have changed are to be found in Table 5 which shows place of residence, in 1985, of the population of Tijuana that did not reside in Baja California that year. The data show that Sinaloa and the Federal District have replaced Jalisco, historically the most important place of origin of immigration to this region. If the State of Mexico and the Federal District (basically the metropolitan area of Mexico City and Toluca) are considered together, they are the most frequent origin of immigrants to Tijuana. Michoacán, Sonora, "Other Country" (principally the United States), Nayarit and Guanajuato are equally important places of origin of the new immigration to Tijuana.
IV. Housing Conditions.
In the last section of this study we emphasize the lack of improvement of living conditions in Tijuana in spite of the economic recovery of the last decade. This situation is extremely critical because urban infrastructure has always been undeveloped in Tijuana, and now, in recent years it has had to cope with the demand for services generated by the arrival of new immigrants. Unlike indicators such as income and employment which can be understood within the binational context of labor markets, housing is largely related to political choice and the economic capacity of the Mexican government, because, in Mexico, the government is responsible for developing public services like sewers, drinking water and electricity, as well as adequate housing for the poor.
In analyzing the allocation of public services in some border cities, Guillén (1990) has pointed out how housing conditions of the border population are of an inferior level to those found in cities in the interior of Mexico, even controlling for socioeconomic stratum. The history of the lack of an adequate urban infrastructure on the northern border, and especially in Tijuana, is aggravated by the new demands generated by immigrants. Census information shows a 66.6% increase in the number of dwellings in Tijuana during the past decade. Housing in the metropolitan zone of Monterrey increased 44.7% during the same period (Table 6). This increase in housing was accompanied by a decrease in the average number of residents per dwelling in both cities.
The past decade was a period of substantial improvements in the frequency with which households had access to sewer connections, drinking water and electricity in Monterrey. In Tijuana, on the contrary, the percentage of houses with these improvements have not changed in the same period. Moreover, there was an significant increase in the frequency of dwellings without electricity. The statistics speak for themselves: 33% of the Tijuana's dwellings lack proper sewer connections; 42% do not have running water; and 14.2% do not have electricity. These figures contrast sharply with those for Monterrey where the percentages are all higher.
Other indicators related to the construction of the dwellings and the use of space also illustrate the unfavorable socioeconomic condition of the population of Tijuana. A large percentage (69%) of the dwellings in this locality are constructed with roofs of poor quality materials (thatch, wood or laminated sheets of steel or of cardboard); 7% of them have dirt floor and walls made from laminated steel , cardboard, bamboo, thatch or wood. Finally, Tijuana, although not much different from Monterrey, also has a significant percentage of dwellings where the members use the kitchen as a bedroom (approximately one of every ten dwellings).
Final Considerations
In this chapter we have shown that the economic crisis of the eighties has not necessarily produced the same effects in different regions and localities. Our general point is that national trends can have contrasting results as in this case of the border region of Baja California. The available information shows that the policies of national and border development slowed economic growth in Tijuana during the seventies, and that important changes in these policies allowed for economic recuperation in times of profound national economic crisis one decade later.
Economic recovery in Tijuana is reflected in the high salary levels of the labor force in relation to other national urban centers. Nevertheless, even though Tijuana is a more favorable economic scene than the rest of the country at this time, a significant part of the income of the population continues to be provided by employment in the North American labor market. This consideration, in conjunction with low levels of social security coverage in employment, highest number of hours worked by the economically active age group, the high proportion of female headed households in the low-income strata, the poor conditions of the urban infrastructure and housing, leads to the conclusion that in the case of Tijuana the favorable economic conditions and the high income of its population have not necessarily been translated into other signs of well-being. As was seen in the analysis of housing conditions, the historical lack of an adequate urban infrastructure in Tijuana appears to be aggravated by the increasing demand for services generated by the increase in immigration.
Undoubtedly, the northern border region of Mexico is an important region for the development of the present economic policies of the Mexican government. What is clearly necessary from the central government is the development of a social policy that rescues the region from its backwardness in its urban infrastructure, and which will promote the general well-being of the community. Unfortunately, although there exists a clear tendency towards the decentralization of economic activity in Mexico, a similar policy that changes political centralism in the distribution of national social spending does not appear to exist, nor do we see even the beginnings of a national employment policy, which is so badly needed not only for the border where we have been studying it, but for the country as a whole. Perhaps we can glimpse encouraging signs in the acceptance of the Jalisco election results of 1995, where the opposition victory was not contested by the official party, and in the democratization efforts of the present administration, as Mexico enters the third stage of its economic crisis in the middle of the nineties.
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Mendoza Berrueto, Eliseo (1982) "Historia de los programas federales para el desarrollo económico de la frontera norte". in Ojeda Mario (ed.) Administración del desarrollo de la frontera norte. Mexico City: El Colegio de México.
Piñeira, David et al. (1985) Historia de Tijuana. Semblanza general. Tijuana, B.C.
Universidad de Baja California y XI Ayuntamiento de Tijuana.
Ramírez, José Carlos and Bernardo González-Aréchiga (1989) "Los efectos de la competencia internacional en el funcionamiento de la industria mnaquiladora de exportación en México" Tijuana: El Colegio de la Frontera Norte. Frontera Norte 1:2:5-33.
Rosenhouse, Sandra (1989) "Identifing the Poor: Is Headship a Useful Concept?" LSMS Working Paper 023-4517 (58) 1-50.
Selby H. A., A. D. Murphy and S. A. Lorenzen (1990) The Mexican Urban Household: Organizing for Self-Defense. Austin: University of Texas Press.
Selby H. A., A. D. Murphy, S. A. Lorenzen, Ignacio Cabrera F., Igancio Ruiz L. and Aida Castañeda (1994) La familia en México Urbano. México: CONACULTA.
Zenteno, René (1992) Imigración hacía la frontera norte: el caso de Tijuana, B.C. Tijuana: El Colegio de la Frontera Norte (en prensa)
Tijuana: Number of Maquiladora Plants and Number Employed
1974-1990
Year
|
Number
of Plants
|
Number
Employed
|
| 1974
|
101
|
9276
|
| 1975
|
99
|
7844
|
| 1976
|
93
|
7795
|
| 1977
|
92
|
7111
|
| 1978
|
95
|
8778
|
| 1979
|
10-1
|
10889
|
| 1980
|
123
|
12343
|
| 1981
|
127
|
14882
|
| 1982
|
124
|
14959
|
| 1983
|
131
|
17423
|
| 1984
|
147
|
23047
|
| 1985
|
192
|
25913
|
| 1986
|
238
|
30248
|
| 1987
|
317
|
40409
|
| 1988
|
388
|
51496
|
| 1989
|
478
|
58590
|
| 1990
|
512
|
65852
|
Open Unemployment Rates as Percentage of Economically Active Population
Year
|
All
Urban Areas
|
Tijuana
|
Ciudad
Juarez
|
Monterrey
|
Guadalajara
|
Mexico
City
|
| 1985
|
5.2
|
2.6
|
2.3
|
6.9
|
3.9
|
5.7
|
| 1986
|
4.1
|
0.8
|
2.9
|
5.0
|
2.6
|
4.9
|
| 1987
|
4.4
|
1.2
|
2.1
|
5.9
|
3.4
|
5.0
|
| 1988
|
3.5
|
1.0
|
1.7
|
4.0
|
2.9
|
4.0
|
| 1989
|
3.2
|
1.7
|
0.7
|
3.6
|
1.6
|
4.0
|
| 1990
|
2.5
|
1.4
|
2.0
|
3.2
|
1.2
|
2.8
|
Monthly Income of Main Job by Quartile, (1989 dollars)1
| City
|
25 percentile
|
Median
|
75
percentile
|
Mean
|
Minimum2
|
| Tijuana
|
174.3
|
248.7
|
414.4
|
345.4
|
106.0
|
| 1.64
|
2.35
|
3.91
|
3.26
|
1.003
| |
| Cd.
Juárez
|
136.1
|
192.8
|
331.5
|
287.6
|
106.0
|
| 1.28
|
1.82
|
3.13
|
2.71
|
1.00
| |
| Monterrey
|
107.9
|
154.2
|
246.7
|
230.2
|
97.9
|
| 1.10
|
1.57
|
2.52
|
2.35
|
1.00
| |
| Guadalajara
|
106.4
|
154.2
|
248.7
|
222.1
|
97.9
|
| 1.09
|
1.57
|
2.54
|
2.27
|
1.00
| |
| Mexico
City
|
111.8
|
152.7
|
232.1
|
218.2
|
106.0
|
| 1.05
|
1.44
|
2.19
|
2.06
|
1.00
|
Notes:
1. The exchange rate for this period of the survey was 2,593.9 pesos per dollar
2. Official minimum salaries set for period 1st July, to 3rd December, 1989.
3. In terms of minimum salaries
By Quartiles of Household Income by Worker, 19891
| Quartile
1
|
Quartile
2
|
Quartile
3
|
Quartile
4
|
Total
| |
% female heads
|
22.3%
|
24.2%
|
11.3%
|
10.3%
|
19.0%
|
| Mean
income per household (U.S. $)
|
266.50
|
482.90
|
601.00
|
1,241.60
|
648.80
|
| %
households with at least one member in US
|
4%
|
4.4%
|
11.1%
|
31.4^%
|
12.9%
|
| %
of household income from US
|
2.1%
|
2.0%
|
7.9%
|
31.4%
|
17.5%
|
| %
of work force working more than 48 hrs/week
|
2.02%
|
16.6%
|
15.4%
|
21.1%
|
18.8%
|
| %
of work force without social security2
|
63.0
|
41.0%
|
49.5%
|
66%
|
54.4%
|
1. Only those households are included that have at least one member in the work force at the time of the survey, and who have income data for all members in the work force.
2. This includes, in addition to IMSS, ISSTE and private insurance.
who Did Not Reside in Tijuana in 1985 (Data from 1990)
Total number of immigrants not living in Baja California in 1985
|
144,615
|
100%
|
| Sinaloa
|
22,734
|
15.7%
|
| Federal
District
|
18,127
|
12.5%
|
| Jalisco
|
17,539
|
12.1%
|
| Michoacán
|
10,241
|
7.1%
|
| Sonora
|
9,357
|
6.5%
|
| Other
Country
|
8,705
|
6.0%
|
| Nayarit
|
7,997
|
5.5%
|
| Guanajuato
|
6,833
|
4.7%
|
| México
|
5,922
|
3.9%
|
| Durango
|
5,664
|
3.9%
|
| Puebla
|
4,630
|
3.2%
|
| Guerrero
|
3,332
|
2.5%
|
| Other
|
23,234
|
16.1%
|
Selected Housing Conditions
Tijuana
|
Tijuana
|
Monterrey
|
Monterrey
| |
| 1980
|
1990
|
1980
|
1990
| |
| Total
Number of Houses
|
96,833
|
161,338
|
359,476
|
520,285
|
| Average
number of members
|
4.8
|
4.5
|
5.5
|
4.9
|
| %
without sewer connection
|
33%
|
34.5%
|
21.4%
|
10.9%
|
| %
without running water
|
42.4%
|
42.0%
|
21.4%
|
18.8%
|
| %
without electricity
|
8.7%
|
14.25
|
4.8%
|
1.3%
|
| %
with thatch, wood or tin roofs
|
2.9%
|
6.9%
|
2.4%
|
1.3%
|
| %
with dirt floors, walls of tin, cardboard, bamboo, thatch, wood
|
2.9%
|
6.9%
|
2.4%
|
1.3%
|
| %
using kitchen to sleep in
|
6.4%
|
11.1%
|
9.1%
|
9.4%
|
Notes:
1. The metropolitan zone of Monterrey includes the following municipios: Apodaca, Garza García, General Escobedo, Guadalupe, Monterrey, San Nicolás de los Garza and Santa Catarina.
[1]One of the more important problems has been the lack of self sufficiency in the production of basic grains.
[2] For example, two of the most frequently used indicators have been the reduction of the value of industrial production, and the dramatic collapse in real wages. This second indicator has been mostly calculated through salary changes in the industrial sector.
[3] Escobar's introduction and discussion (this volume) shows that the crisis came later to Guadalajara than it did to Mexico City and to Monterrey becuse of the structure and organization of production in that city: Guadalajara already had high levels of self employment and therefore did change as much as Monterrey, in particular, did, and it had fewer capital goods and consumer durable industries as well as less public sector employment and so was not as early and seriously affected as Mexico City.
[4] This city came to represent an excellent opportunity for American entrepreneurs associated with alcohol production, gambling houses, and prostitution. The Baja Californian entrepreneurs also entered into the "prohibition businesses" and, very quickly, Tijuana saw its disheveled streets full of bars, liquor stores, casinos, houses of prostitution and many others businesses devoted to satisfying the tireless demand of a fleeting, as well as lucrative tourism (Contreras, 1988:42-43).
[5] The Korean War and the American economic prosperity during the post-war period enabled this program to continue, though with some breaks, until 1964.
[6] Under the bracero agreements, approximately five million Mexicans were legally hired to work in the USA; furthermore there were many more who were also working in this country under the status of illegality. (Bustamante, 1975).
[7] Not all migration to the northern border can be easily associated with the demand for labor in the United States. During the 1940's and 1950's there was also great economic development in all the agricultural zones due to the boom of the cultivation of cotton there.
[8] This situation, along with the cotton harvesting crisis in the Mexicali Valley which also produced migration to Tijuana, enabled this municipality to continue to grow demographically during the sixties at a rate as high as before.
[9] The demand for Mexican labor force by American employers continues to be important nowadays. This demand is generally canalized through either the hiring of "illegal" immigrants or the granting of work permits by the American government to residents of Mexican border cities. The latter is considered "commuter" and in 1987 represented 7.8% of the total work force in Tijuana according to the data of the Encuesta Socioeconomica Anual de la Frontera Norte of El Colegio de la Frontera Norte.
[10] The objectives of this program were to create new work opportunities, to increase living standards of the local population, to introduce new manufacturing techniques, and to use Mexican raw materials in the new production processes. Details about the programs and policies for the development of the northern border can be seen in the studies of Mendoza Berrueto (1982) and Herrera Ramos (1988).
[11] Sections 9802.0060 and 9802.0080 of the Mercantile Law of the United States allow American products processed or assembled abroad to be introduced to the United States with a customs fee equivalent to the value added abroad.
[12] The world re-structuring of the production process, as well as world wide changes in technology, also persuaded foreign enterprises to take advantage of labor along the border, especially in labor intensive enterprizes.
[13] Between October 1974 and May 1976, 109 maquiladoras ceased activities along the border (Margulis y Tuiran, 1986:91).
[14] Another relevant point regarding the influence of the MEI during its first fifteen years is the fact that, from the perspective of employment, it favored a different kind of labor force, from that which it was originally meant to target. The braceros who were unemployed at the border (mainly men from rural areas) were not the ones to find jobs as laborers in the MEI, but rather young females.
[15] The decree announced that all small and medium size industries along the border were declared as beneficial to the nation, and granted subsidies to tax payments up to one hundred percent on imports of capital equipment and raw material.
[16] As shown in Graph 1, the levels of overvaluation were very high during the seventies, except for an adjustment due to a severe devaluation in 1976. Nevertheless, the Mexican currency soon became overvalued reaching even higher levels than those throughout the first half of the decade.
[17] In order to guarantee a place for Mexican goods, border merchants were obliged to purchase as much Mexican as foreign goods.
[18] Most of the policies undertaken by the Mexican government to stimulate development on the border, have been rooted in a concept of the northern border more as a "free perimeters" zone than as "free zones". The latter, especially that of Baja California, has historically maintained a particular form of economic development, so different that it demands different treatment in political terms for its development. Regarding this matter, the paper written by Jorge Alonso (1988) is recommended.
[19]The author adds that the branches that had the least dynamism were commerce and the manufacturing industry.
[20] The national economic crisis led to the cessation, in 1982, of the policy of overvaluing the Mexican currency carried on through most of 1970's, as can be seen in Graph 1.
[21] Furthermore, residents on the American side of the border should be accounted for as aggregate demand for the Mexican cities. This is specially true when the exchange rates favor -in price- Mexican goods.
[22] In this paper information from different urban centers is shown only for comparison purposes. The most used reference is Monterrey, a Northern urban center whose development and growth greatly depended on the import-substitution model of industrialization.
[23] Each stratum has the same number of cases, since it contains a quartile of the population partitioned on the basis of per worker income. The following definitions are relevant: : 1) Total household income refers only to the amount produced by primary occupations of each one of the economically active members; 2) households are strtified on the basis of total income per worker in order to control the effect of the multiple labor force participants in the same household. In this way, for example, the first quartile represents the 25% of the households with the lowest incomes per worker, and the fourth quartile 25% of the households with the highest incomes per worker; 3) all households with one or more incomes from unspecified members were eliminated from the analysis, as were all the households that did not show an economically active member. This was done, first, in order to eliminate households whose incomes were underestimated, and second, to avoid including households which had unspecifiable incomes outside the labor market.
[24] In Monterrey only 13% of the work force works more than 48 hours.
[25] The same data for Monterrey is 38.4%.
[26] The impact of immigration in both cities is even higher due to the fact that internal mobility within the state is not included.
[27] Editor's note: Obviously these data reflect conditions in California previous to the economic downturn associated with the downsizing of the defense budget.