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Lou Dobbs Tonight

CNN |  By Lou Dobbs | July, 22 2005 |  Share  | Source Article

DOBBS: Now, the economic sham some call free trade -- American corporations setting up factories overseas in their quest for cheap labor. One company, Alcoa, operates a plant in Acuña, Mexico, just across the U.S border. Workers there are paid a barely subsistent living wages by comparison to the United States. But now Alcoa is threatenig to shift the jobs there to Honduras where workers are paid even less than their Mexicans counterparts.

Bill Tucker has our report.

(BEING VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice over): Many of the people in this neighborhood work in Maquiladoras -- factories owned by multinational companies employing Mexican labor. The practice has the full support of the United States.

BUSH: It will improve -- boost demands for our goods. It'll help them reduce poverty. See, as wealth spreads out through the neighborhood, it will help create a vibrant middle class.

TUCKER: This neighborhood is three miles from the border with America. The workers we spoke to are production of workers for Alcoa. The factories they work in stand in stark contrast to the living conditions of the workers. The average wages of $1.21 an hour is not enough, the workers told us, to live on. This woman's husband has worked for Alcoa 14 years. Her family can't affort many basic necessities.

UNIDENTIFIED FEMALE, (through translator): I am unable to eat meat every day. I can't have fruits every day.

TUCKER: All of the workers we spoke to would only speak if they remained anonymous, for fear of reprisals by the company -- a fear that Alcoa told us is unfounded. Still the workers are afraid, afraid because the company has made it clear that labor cost are cheaper in its new plant in Honduras, where two workers can be hired for price of one here in Acuña. 

UNIDENTIFIED (throught translator): They've been threatening us all along, every time we talk salaries, that's what they come up with, threats.

TUCKER: To make up the differece between their paycheck and their bills, some workers at the Piedras Negras plants sell their blood across the Rios Grande River in Eagle Pass, Texas, where they can make an additional, $45 a week. In response, Alcoa defends its wages saying that it pays among the highest wages in whatever regions it operates. The company characterizes itself as being very aggressive on cost control, because if it doesn't keep pressure on wages and drive down costs, it will lose business to competitors who will undercut them, and have competing factories in the same regions.

TUCKER (on camera): Proponents of exporting jobs out of America to foreign countries argue that it raises the standard of living for the local workers in that country. Opponents say the only ones who benefit are the corporations.

CHARLES KERNAGHAN, NATIONAL LABOR COMMITTEE: I would say the NAFTA has failed the workers in Mexico and the United States and now they are pitting NAFTA against CAFTA. And CAFTA is going to be another step down.

TUCKER (voice-over): According to research by the National Labor Committee, wages in Honduras are 65 cents an hour, in Nicaragua, 41 cents and in Haiti, 30 cents an hour.

Bill Tucker, CNN, Acuna, Mexico.

(END VIDEOTAPE)