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UNCLAS SECTION 01 OF 03 MEXICO 000079 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR DRL/AWH AND ILCSR, WHA/MEX, USDOL FOR ILAB 
 
E.O. 12958: N/A 
TAGS: ELAB ECON SOCI PGOV PINR MX
SUBJECT: MEXICAN LABOR UNIONS (SORT OF) UNITE TO PROTEST 
PRICE HIKES 
 
REF: (A) MEXICO 0013 (B) 07 MEXICO 0391 
 
¶1.  SUMMARY: Many of the factions within Mexico,s 
&official8 labor unions recently used the anniversary of a 
little known labor event to protest anticipated price hikes 
in gasoline and in items considered part of a basic basket of 
goods. The unions called on Mexico,s Secretaries of Labor 
and Economy to meet with them to determine ways to compel 
food producers and merchants to maintain current prices on 
basic items. According to the unions, the producers and 
merchants are reneging on an agreement with the GOM not to 
raise prices. The unions were critical of the Secretary of 
Economy for not doing a better job of controlling the costs 
of basic items and of the Secretary of Labor for not doing 
more to support workers in negotiating the recent increase in 
Mexico,s minimum wage (Ref A).  The gathering of the various 
union factions was a significant event because of who 
attended the meeting and who did not.  Most media outlets 
that covered the event devoted as much attention to the 
divisions within Mexico,s organized labor movement as they 
did to the call for government action to control prices. 
Considering that Mexican unions have been protesting the 
expected price rises for several months, when these increases 
do take place there is little indication the GOM will react 
in any meaningful way to the calls for action from a divided 
labor movement closely tied to one of the country,s main 
opposition political parties.  END SUMMARY. 
 
 
OFFICIAL UNIONS COMMEMORATE OBSCURE LABOR EVENT 
--------------------------------------------- -- 
 
¶2.  On January 7, a relatively broad faction of the various 
groups that comprise Mexico,s &official8 labor unions 
gathered to commemorate the 101 anniversary of the &Martyrs 
of Rio Blanco8, one of Mexico,s first organized labor 
protests.  Rio Blanco, in the southeastern coastal state of 
Veracruz, was the site where Mexican workers in a French 
owned textile factory (in many ways a precursor of present 
day Maquiladora plants) launched a strike to protest low 
wages and poor working conditions.  The strike was violently 
suppressed by the then government of Mexico and since the 
country,s revolution the anniversary of the event has become 
a symbol of the workers, struggle for social justice. 
 
¶3.  The groups commonly referred to as Mexico,s &official8 
unions are labor organizations formally linked to the 
country,s former ruling party, the Institutional 
Revolutionary Party (PRI).  The PRI, many of whose members 
continue to see the party as an agent for social justice, is 
now one of Mexico,s two main opposition political parties 
and the official unions thus very much see themselves as a 
part of what would be described in the US as the loyal 
opposition.  Perhaps because of the significance of the Rio 
Blanco incident to Mexico,s &official8 labor unions the 
commemoration of this event was used to protest what they 
view as a part of a modern day struggle for social justice; 
specifically they objected to anticipated price hikes in the 
cost of a basic basket of consumer items. 
 
 
VOLUNTARY AGREEMENTS PERCIEVED AS GOVERNMENT FAILURES 
--------------------------------------------- -------- 
 
¶4.  For the past few months nearly all of the labor 
organizations in Mexico, both the official unions and the 
non-official ones, have become increasingly vocal in 
expressing their concerns about anticipated price increases. 
Numerous producers of essential goods claim that market 
conditions are leaving them no other choice.  In early 2007 
when many sectors blamed price spikes for tortillas and other 
basic food items on unscrupulous speculators, the then 
recently inaugurated government of President Felipe Calderon 
took steps to address the situation.  Among the steps taken 
were increased food imports and, most significantly, limited 
voluntary price caps (Ref B).  Now, almost exactly a year 
later, producers are increasingly reluctant to hold the line 
on what they view as unsustainably low prices. 
 
¶5.  Although the price caps were always clearly labeled as 
being limited and non-binding in nature, many in Mexico,s 
 
MEXICO 00000079  002 OF 003 
 
 
organized labor movement apparently viewed them as long-term 
binding agreements between the government and the producers 
of essential goods. Now that the producers are signaling 
their intention to discontinue compliance with the voluntary 
agreements Mexican labor unions have become very critical of 
these private sector producers but they are even more 
critical of the GOM for failing to enforce price caps.  So 
far the unions are unwilling to accept that the caps were 
limited and voluntary and they are directing particularly 
harsh condemnation against Mexico,s Secretary of Economy, 
Eduardo Sojo and its Labor Secretary, Javier Lozano. 
Secretary Sojo is being condemned for not controlling prices 
 
SIPDIS 
and Secretary Lozano is being faulted for not siding with the 
labor unions in the recently concluded annual negotiations to 
determine Mexico,s minimum wage (Ref A).  The unions have 
urgently called on the two Secretaries to meet with them to 
determine ways to compel food producers and merchants not to 
raise the cost of basic items. 
 
 
LABOR UNITY ( SORT OF 
--------------------- 
 
¶6.  The 2007 tortilla price rise caused widespread negative 
public reaction. Nearly all of the country,s labor unions, 
both official and non-official, were equally vocal in 
expressing their concern.  The official and non-official 
unions (which see each other as competitors) did not exactly 
work together to protest potential price increase in basic 
items but both separately succeeded in getting their members 
on the streets to demonstrate and in getting the country,s 
media outlets to report on the concerns of the unions and the 
general population over consumer price hikes. 
 
¶7.  The perception of unity from 2007 is much less evident 
this year.  Then, the non-official unions who are closely 
tied to Mexico,s main opposition party (Party of the 
Democratic Revolution -- PRD), benefited from the support of 
and close association with the party,s presidential nominee 
who was only narrowly defeated in a highly contested 
election.  For their part, the official unions used a variety 
of methods to express their concerns over anticipated price 
hikes.  Not all of the official unions worked together.  Some 
joined the non-official unions in large public demonstrations 
while many others quietly but intensely lobbied their 
party,s congressional factions to try and stop the coming 
price increases. 
 
 
THAT WAS THEN, THIS IS NOW 
-------------------------- 
 
¶8.  A great deal has changed since early 2007.  After a year 
in office, President Calderon,s administration is no longer 
as concerned about the non-official unions working with the 
defeated PRD presidential candidate to undermine its programs 
and policies.  More significantly, it can now see that the 
official unions are no longer working with the non-official 
ones on the issue of price increases.  Moreover, in the year 
since the last dust up over this issue, the leadership of 
many of the official unions has followed the lead of their 
political party, the PRI, in trying to work with the Calderon 
government whenever possible. 
 
¶9.  In addition, divisions/power struggles between the 
leadership of the various unions, federations and 
confederations that make up the official unions have 
prevented them from working together.  As a result the 
official unions have not been able to lobby as effectively 
against anticipated price increase this year as they did last 
year.  Many of Mexico,s media outlets that have covered the 
official unions, attempts to pressure the GOM into 
preventing price increases have focused nearly as much 
attention on the divisions between these labor groups as they 
have on the issue of price increases themselves. 
 
 
 
COMMENT 
------- 
 
 
MEXICO 00000079  003 OF 003 
 
 
¶10.  If the amount of media attention being devoted to the 
subject is an accurate indication, then there is considerable 
public concern over the prospect of price increases in the 
costs of essential goods.  The unions may be one of the more 
vocal groups to speak out on this matter but they are not the 
only ones.  However, the unions and many labor observers in 
the media have pointedly underscored the fact that the price 
increases everyone knows are coming will be a particularly 
hard hit on workers whose wages are at or near the minimum 
wage.  The recently decreed four per cent increase in the 
legal minimum wage in Mexico will not begin to cover the 
coming prices increases (Ref A).  By most indications the GOM 
is genuinely concerned about how to lessen the shock of these 
price increases on the poor segments of Mexico,s population. 
 However, the divisions within Mexico,s labor movement means 
that the GOM will not be very hard pressed to take labor,s 
views into consideration as it formulates a plan for how to 
deal with this situation. 
 
 
 
 
 
Visit Mexico City's Classified Web Site at 
http://www.state.sgov.gov/p/wha/mexicocity and the North American 
Partnership Blog at http://www.intelink.gov/communities/state/nap / 
GARZA