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INFO RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE
RUEHXI/LABOR COLLECTIVE

UNCLAS SECTION 01 OF 02 MEXICO 000921 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR DRL/AWH ILCSR, WHA/MEX AND PPC, USDOL FOR ILAB 
 
E.O. 12958: N/A 
TAGS: ELAB ECON PGOV PINR MX
SUBJECT: FEDERAL CIVIL SERVANTS UNION REELECTS LEADER AND 
DEBATES PENSION/HEALTH CARE REFORM 
 
 
¶1. SUMMARY: On February 16, Mexico,s federal civil service 
union federation, (the Federation of Unions of State Workers 
) FSTSE), held a national convention to elect, or more 
specifically, unanimously reelect its Secretary General, Joel 
Ayala Almeida.  This will be Ayala,s third term as the 
national leader of the federal civil service union 
federation. During the convention Ayala expressed his 
opposition to salary caps for federal civil servants and to a 
Mexican government plan to promote voluntary retirement as 
way of eliminating jobs.  Other items on the convention 
agenda were the admission into the federation of 13 
previously unaffiliated public service unions and the 
formation of a union select committee to study proposed 
reforms to the federal employees, pension and health care 
systems.  The pension and health care system debate could 
have broad implications for the Mexican government,s federal 
budget and for the 1.6 million civil servants that FSTSE 
claims to have on its union membership rolls.  END SUMMARY. 
 
 
UNION LEADER REELECTED 
---------------------- 
 
¶2.  On February 16, Mexico,s federation of federal civil 
service unions (Federation of Unions of State Workers )- 
FSTSE) held a national convention.  The main purpose of the 
convention was to elect an individual to the federation,s 
top leadership position of Secretary General. As expected, 
the convention reelected Joel Ayala Almeida to his third term 
as FSTSE Secretary General.  With this reelection, Ayala is 
scheduled to serve as the leader of the federation until 
February 2013. In addition to being reelected as FSTSE 
Secretary General, at present Ayala is also a PRI Federal 
 
SIPDIS 
Deputy (equivalent to a US Congressman) in Mexico,s current 
national legislature.  Ayala previously served as a Senator 
for the PRI (Institutional Revolutionary Party) in the 
previous session of the national legislature. 
 
¶3. Joel Ayala,s reelection to the position of FSTE Secretary 
General was a foregone conclusion as he essentially ran 
unopposed.  Ayala reportedly received the unanimous ballots 
of all 800 of the delegates eligible to vote in the FSTSE 
elections. As is customary in many union elections in Mexico, 
the FSTSE conducted the balloting for the office of Secretary 
General via a process known as an &economic vote8; 
essentially a show of hands. 
 
¶4.  During his acceptance speech, Joel Ayala pledged to 
continue doing everything possible to promote the interests 
of federal civil service employees.  As an example of his 
efforts on behalf of FSTSE Ayala noted that when he took over 
the federation in 1998 the base average monthly wage for 
public employees was 1,536 pesos (USD 142.00) and now, thanks 
to the federation that average wage has risen to 4,550 pesos 
(USD 421.00) a month.  Ayala expressed his firm opposition to 
salary caps for federal employees (an idea strongly favored 
by Mexico,s recently inaugurated President, Felipe Calderon) 
and to a GOM proposal to offer (early) voluntary retirements 
as a way to eliminate public service jobs. 
 
 
OTHER ITEMS ON THE CONVENTION AGENDA 
------------------------------------ 
 
¶5.  In addition to electing a new Secretary General, the 
FSTSE national convention had two other major items on its 
agenda. 
The first was a vote to expand the federation franchise. 
During the convention 13 other, previously unaffiliated 
public service unions were admitted into the federation. 
Prior to the admission of these new unions the FSTSE was 
composed of 86 individual public employee organizations, 
which, according to the federation, claimed to represent some 
1.6 million federal civil servants throughout Mexico.  Now, 
with the addition of the 13 new federation members, FSTSE 
claims it will represent over two million federal employees. 
 
 
¶6.  The some of the new member unions who are now part of the 
FSTSE include the Union of Mexican Navigation and Aerospace 
Service Employees; the Administrative Offices Workers Union, 
three separate unions within the Secretary of Transport and 
Communications, two separate Metro (subway) Workers Unions, 
the Employees Union of the Mexico City District Attorney,s 
Office, the Mexico City Education (teachers) Workers Union, 
and the Employees Union of the Secretary for Public Security 
of Mexico City. 
 
 
MEXICO 00000921  002 OF 002 
 
 
 
 
CONVENTION DISCUSSES PENSION AND HEALTH BENEFITS 
--------------------------------------------- --- 
 
¶7.  The second major item of business on the FSTSE agenda was 
a discussion of a pending law to reform federal employees, 
pension and health care benefits.  At present these benefits 
are provided by ISSSTE -- the Institute for Social Security 
and Security for Civil Servants.  Under the administration of 
ISSSTE federal public employees receive health care and 
pension benefits through a system that is separate from the 
ones available to most Mexican citizens or workers under the 
national pension and health care systems.  The pending ISSSTE 
reform law that the convention discussed was first proposed 
last year by Joel Ayala Almeida when he was still a federal 
Senator. 
 
¶8.  As originally proposed the reform law drew heavily from 
recommendations that the World Bank first made to the Mexican 
Government in 2001.  When first introduced to the Mexican 
Congress, the ISSSTE reform laws, and the World Bank 
recommendations on which it was based, were broadly 
criticized as being too harsh.  The proposed reforms would 
have removed some of the disparities between the (more 
generous) pension benefits available to public employees and 
these available to the average Mexican worker. 
 
¶9.  Other changes proposed in the reform law would have 
required more standardization across the board in how 
pensions for federal employees are administered.  Under the 
standardized systems a mixed board of government and union 
appointed trustees would oversee the administration of 
federal employees, pension funds.  The trustees would also 
be responsible for overseeing a system which tracts the 
benefits of individual employees more accurately than the 
system which currently exists.  In addition the proposed 
reforms would raise the retirement age of public employees 
and, starting in 2008, gradually increase the contributions 
to pension funds (over an as yet to be determined period) by 
both the GOM and federal employees from its current 3.5 
percent of base salary to 6 percent of base salary. 
 
¶10.  With regard to health care benefits, the reform law 
would continue to allow parents of public employees to have 
access to ISSSTE medical services but only if the parents 
lived with the employee and were financially dependant on 
them.  The proposed reform would cut benefits to the children 
of federal civil servants across the board.  At present the 
children of federal employees are eligible for ISSSTE health 
services until age 18 or until age 24 if they are full time 
students.  The proposal would change the maximum age for 
eligibility to health services to 16 years regardless of 
whether the son or daughter was a full time student. 
 
¶11. The delegates at the FSTSE national convention decided 
that there was insufficient time available to them debate 
(and study) the implications of the proposed ISSSTE reform. 
Consequently, the convention formed a select committee to 
review the issues involved and report back to the national 
FSTSE leadership at an unspecified date. 
 
COMMENT 
------- 
 
¶12. The reelection of Joel Ayala Almeida was fairly typical 
of the way in which most internal union elections are held in 
Mexico in that the leaders of powerful unions are rarely 
replaced unless they choose to step down.  In Ayala,s case 
he can make a convincing argument that the FSTSE has achieved 
measurable gains for its members.  Moreover, Ayala,s support 
for a reform of the federal civil servants health care and 
pension benefits systems makes him a rarity among Mexican 
labor leaders who seldom (publicly) acknowledge a need to 
reduce previously negotiated benefits under any 
circumstances.  Assuming he can persuade his public service 
employees, federation to accept the reforms of the ISSSTE 
system, (and as a member of one of Mexico,s two main 
opposition parties), he can be a valuable interlocutor on 
pension reform and other union topics for the relatively new 
government of Mexican President Felipe Calderon. 
 
 
 
 
Visit Mexico City's Classified Web Site at 
http://www.state.sgov.gov/p/wha/mexicocity 
GARZA