What Happens to Workers When Governments Divest? Labor in the Privatization of Mexican Railroads

The discussion about the relevance of railroads in Mexico goes beyond its economic dimension. For historical reasons, the debate is typically charged with an enormous amount of ideological & political content. When the privatization decision was made in 1995, under President Zedillo, all these i...

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Bibliographic Details
Published in:Gestión y política pública 2003-06, Vol.12 (2), p.253-289
Main Authors: Andalon Lopez, Mabel A, Lopez-Calva, Luis F
Format: Article
Language:Spanish
Subjects:
Labor Relations
Mexico
Privatization
Railroads
Wages
Workers
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Summary:The discussion about the relevance of railroads in Mexico goes beyond its economic dimension. For historical reasons, the debate is typically charged with an enormous amount of ideological & political content. When the privatization decision was made in 1995, under President Zedillo, all these issues were brought into the discussion. The labor union, FNM, had always given important support of the official party, the PRI, & had a good deal of political weight in the public sphere. However, the financial conditions of the company, as well as its productivity indicators, were clearly an objective factor in favor of privatization. Its relevance notwithstanding, there is almost no systematic analysis of the labor restructuring process, partly due to the difficult access to good data. When the privatization process started in 1996, FNM had around 43,000 active workers, out of which only 23,300 were rehired after privatization. Those who were not received the equivalent of 10,000-25,000 dollars as severance payment. The evidence shows that those workers who stayed in the company tend to earn higher wages, though the skilled to unskilled salaries ratio also increased after privatization. 13 Tables, 3 Graphs, 2 Appendixes, 14 References. Adapted from the source document.
ISSN:1405-1079