Abstract
Maquiladoras, or manufacturing plants in Mexico, have become Mexico’s major economic powerhouse, driven by Mexico’s international tariff programs [1]. Maquiladoras have significantly impacted workers’ quality of life, including their well-being, professional development, and working conditions [2]. However, a lack of enforcement of industry standards and professional codes leads to labor malpractice and continued marginalization [1]. Thus, engineers and employers must consider these ethical issues when optimizing systems and developing new workplace technologies.
Introduction
A maquiladora is a factory located in Mexico or Central America that is owned by a foreign entity [3]. The word “maquiladora” comes from the Spanish word “maquila,” which means to assemble or process [1]. While the maquiladoras along the U.S.-Mexico border link global retailers through large-scale manufacturing, those in interior Mexico and Central America offset businesses’ high labor costs in the U.S. and Europe [2]. Beyond these economic advantages, however, this multinational maquiladora model faces many complex ethical problems [2]. For example, maquiladoras workers often face abuse, safety hazards, and systemic discrimination. These issues illustrate how global expansion can sacrifice worker welfare and broader economic system stability in pursuit of economic growth [1, 2].
Background
Maquiladoras operate in several Central American countries, including El Salvador, Honduras, and Guatemala, as well as in other Latin American nations [4]. Although nations such as Japan, South Korea, Germany, and China maintain a significant presence in the industry [5], the United States remains the primary stakeholder, owning 80% of Mexico’s maquiladoras [6]. As a result, the maquiladora industry follows a structure in which U.S. parent companies manage manufacturing operations in Mexico [3]. The maquiladora industry encompasses automotive, electronics, medical devices, textiles, and clothing, exporting goods either directly as finished products or indirectly as components shipped to other factories for further assembly [3, 7].
The Mexican government first established the maquiladora program in the 1960s to increase foreign investment and reduce unemployment [8]. Later, the establishment of the North American Free Trade Agreement (NAFTA) in 1994 made maquiladoras extremely popular. NAFTA empowered maquiladoras by removing quotas and allowing products to enter the U.S. and Mexico without restrictions [9]. In 2006, Mexico further boosted the maquiladora sector by introducing the Industry for Manufacturing, Maquiladoras, and Export Services (IMMEX) program that provides tax and customs benefits to foreign companies [9]. The rise of international trade agreements also significantly impacted the maquiladora industry by allowing the import of manufacturing materials and equipment into Mexico tax-free [8]. As a result, between 2016 and 2021, IMMEX companies generated an average of 55.8% of Mexico’s total exports and 43.3% of its total imports [10]. In the current global economy, maquiladoras continue to thrive as international companies leverage them and related trade agreements to streamline production and exports [3].
Maquiladoras have been the driving force behind Mexico’s rapid economic growth, with a current GDP of $1.8 trillion, making Mexico the world’s 15th-largest economy [11]. With 12 trade agreements across 44 countries, these factories have unified Mexico and other Latin American countries as key competitors in the global supply chain, making them crucial to Mexico’s export manufacturing industry [8, 9]. In the modern global marketplace, competitive pressures force companies to lower costs and increase production [12]. Leveraging trade programs such as IMMEX, maquiladoras can import raw materials into Mexico tax-free for manufacturing, reducing companies’ tax burden. Maquiladoras’ proximity to countries such as Canada and the United States also enables lower shipping costs, shorter transit times, and greater supply chain efficiency [12]. As a result, maquiladoras offer one of the world’s most competitive manufacturing cost structures, approximately 25% cheaper than the U.S. and 6% more affordable than China [12].
Due to their lower costs and greater efficiency, more than 3,000 maquiladoras are currently operating along the 2,000-mile-long U.S.-Mexico border, employing one million workers and importing over $51 million in supplies into Mexico [13]. Maquiladoras offer lower labor rates than China and other countries, with an average worker wage of $4/hr compared to $22.45/hr in the U.S. [13]. These low wages further reduce production costs, allowing businesses to sell products at competitive prices, especially in the U.S., where Mexico’s proximity provides a cost-effective manufacturing that keeps goods affordable for the American public [13].
Lack of Safety Protocols
Maquiladoras tend to have poor working standards, leading to repetitive stress that develops over weeks to years among maquiladora workers [14]. This stress tends to accumulate into work-related musculoskeletal disorders (WMSDs), including problems in muscles, bones, blood vessels, and nerves [14]. These work-related injuries further lead to decreased productivity, absenteeism, and higher costs for businesses and public health systems [15]. The International Labour Organization (ILO) identifies WMSDs as the second leading cause of disabilities, contributing to occupational diseases that cost around 4% of Mexico’s gross domestic product, or $2.8 billion USD [16].
Maquiladoras’ poor working conditions increase the risk of sexual and physical abuse, posing a significant threat to workers’ safety [2, 17]. Some maquiladoras subject women and minors to harsh working conditions, working 20-hour shifts with no weekends [17]. While Guatemalans require $5–6 a day for basic needs, the average maquiladora worker earns less than $1.59 [17]. The working environment is often described as extremely poor, with limited windows, fans, and emergency exits [16]. According to a Guatemalan economics professor, even with poor working conditions, factory jobs remain the ‘best employment’ option for Latin Americans [17]. However, Guatemala has faced criticism for being labeled the ‘most repressive’ country in the Western Hemisphere, where some reports indicate that certain maquiladoras’ conditions are comparable to slavery [17].
The issue of worker safety has persisted for many years. One of the worst tragedies is the 1911 Triangle Shirtwaist Factory Fire in New York City, killing 146 sweatshop workers who mainly consisted of immigrants [18]. This incident led to improvements in working conditions and regulations in the United States. However, stricter safety laws and higher labor costs made U.S. manufacturing more difficult, prompting companies to relocate their operations abroad. By operating abroad, companies can avoid strict labor regulations and high labor costs [17, 18].
The harsh working conditions and business pressure to minimize costs demonstrate the reality of the maquiladoras’ global manufacturing model: an exploitation that continues to result in severe physical, emotional, and societal damages for workers.
Rights and Common Good
From a rights-based ethical lens, every worker has the right to be free from workplace harm [19]. Respecting this right requires written contracts for all employees to guarantee basic rights—such as vacation, profit sharing, and nondiscrimination—and mandates employer compliance to ensure fair labor practices [20]. Article 123 of the Mexican Constitution also mandates that companies are responsible for providing workers with a safe work environment and upholding basic human rights [21]. This constitutional mandate affirms that workers’ dignity should be respected, not just as a legal obligation but as a societal responsibility, as its impact can have a domino effect on entire communities [21]. However, compliance is the main problem, as there is no effective enforcement to ensure factories maintain fair employment practices [20]. Weak regulatory oversight and occasional official corruption exacerbate these problems. By exploiting weak oversight, companies treat legal rights as optional expenses rather than obligations. This choice prioritizes profit over worker dignity, failing the company’s basic duty to protect human rights and community stability.
Similarly, the common good ethical approach emphasizes the connection between individual well-being and the welfare of society. This approach implies that an individual’s prosperity inherently benefits society [22]. Workers’ working conditions in maquiladoras can have a direct impact on their families, the community, and culture [2]. The conditions under which people are born, raised, employed, and live shape everyday life, with macro-level impacts.
Interventions such as improving working conditions, training, and work breaks can effectively reduce work-related disorders [14]. Prevention measures can lead to longer, healthier lives for maquiladora workers, but require companies to invest in their workers. Thus, many companies oppose this investment, as it would undermine the goal of manufacturing overseas: reducing costs [14]. However, increasing investment in worker well-being might actually reduce operational costs. Employers who invest in workplace safety and health are likely to see fewer fatalities, injuries, and illnesses [14]. This increased safety will result in cost savings, including workers’ compensation, medical expenses, reduced replacement-staff costs, and accident investigations [14]. These changes not only benefit individual workers but also promote the overall prosperity of society by fostering healthier, more productive workers.
COVID-19 Pandemic and Working Conditions
The global COVID-19 pandemic led to the deaths of millions of people at a rapid pace [23]. In response, on March 31, 2020, the Mexican government declared a health emergency and prohibited all non-essential manufacturing, but maquiladoras refused to comply with the mandate [23]. During this period, the maquiladora industry experienced an increase in human rights violations [24]. Many factories in the border region continued to operate even after the two-week shutdown notice had passed. As a result, COVID-19 spread in these facilities, and the maquiladoras industry continued production without safety protocols despite claiming to pause operations [24].
The companies operating maquiladoras failed to uphold basic ethical principles such as compassion, responsibility, and justice [25]. Their ignorance of employees’ health constitutes a breach of corporate duty to provide workers with a safe environment. Corporate Social Responsibility (CSR) is the concept that a business has a responsibility to the society around it [26]. These companies’ disregard for CSR reveals a clear power imbalance in the maquiladora industry, where businesses exploit low-wage workers and disregard their basic human welfare [26].
The maquiladoras system’s prioritization of profit during a global pandemic illustrates its lack of responsibility. The industry’s drive to maximize revenue left its workers in vulnerable financial and health situations. These businesses neglected ethical business practices, prioritizing profits over their workers’ welfare. Companies must respect their social obligations and treat workers fairly and with dignity to prosper in an economy. A global economy cannot thrive with workers being exploited [26, 27].
Limited Career Development
Not only does the current maquiladoras industry lack proper working conditions, but it also offers limited career advancement opportunities [28]. Human capital refers to the collective knowledge, skills, health, and experience of a workforce and is the most critical resource in any organization and economy [29]. The lack of opportunities to build human capital confines individuals to jobs with minimal professional fulfillment, rendering it unethical not to provide employee development [30]. The maquiladoras’ work environment restricts opportunities for advancement, leaving workers in roles with little to no upward mobility.
Work is meaningful if it allows people to improve and use their individual skills [23]. It will enable people to acquire a range of skills, benefiting themselves and the community. Meaningful work also supports cognitive development, self-determination, and self-worth [28]. Unlike routine work, skilled jobs make life more fulfilling, as they involve personal development [28]. However, work in maquiladoras is often repetitive, tedious, and tiring, with limited opportunities for skill development. These repetitive tasks fail to stimulate intellectual growth or boost self-esteem [2, 28]. As a result, they stagnate professional development, ensuring that workers remain locked into low-wage tiers without the transferable skills necessary for upward mobility, thereby perpetuating inequality [28]. This phenomenon creates a continuous cycle of exploitation that limits workers’ potential [31].
In a moral economy, economic and interpersonal relationships focus on justice, mutual respect, and ethical ideals rather than merely on profit. It calls for a balance between making a profit and social responsibility. Moral economy implies that the current moral imbalance between profit and morality results from social and political choices [31]. Thus, workers’ inability to change their circumstances reveals a deep ethical failing in the maquiladora structure, which benefits those in power at the expense of workers’ rights. While the primary purpose of the maquiladora industry was to boost economic development and reduce unemployment in Mexico, the drive for cost savings led to the exploitation of cheap labor to maximize profits. Once companies witnessed the financial benefits, the demand to maintain low-cost, high-speed production continued. The desire for profit and quality products overrides ethical concerns about workers’ development and well-being.
Improving the current career development system for maquiladora workers requires changing practices. For example, corporations can advocate for changes in the political and economic frameworks and support better policies that mandate workers’ rights. The current repetitive work under maquiladoras provides limited opportunities for workers’ personal growth [15]. Thus, corporations can also improve repetitive work design by incorporating diverse tasks and rotation, which would allow maquiladora workers to develop their skills for upward mobility. Without these systemic changes, workers will continue enduring a cycle of exploitation and limited opportunities for advancement [31].
Gender Inequality: Through a Justice Perspective
Meaningless work under the maquiladora system heightens gender inequalities. Most maquiladora factories preferentially hire women, believing that men may be more assertive and more ambitious in their career development. As a result, women make up 70% of the maquiladora workforce, and most travel long distances out of desperation and lack of job opportunities [32]. Employers may also assume that women are less likely to assert themselves and less aware of their rights [32]. Thus, employers may withhold information about their rights or frame job opportunities as a privilege [33]. Maquiladoras also mandate pregnancy tests as part of the hiring process and refuse employment to women who are pregnant.
Once hired, women in maquiladoras also face persistent workplace discrimination. Those who become pregnant while employed often face mistreatment and pressure to leave their jobs. Some maquiladoras also require women to take contraceptives as a mandatory condition for employment [33]. Organizations such as the International Labor Organization (ILO) and the United Nations (UN) have standards and guidelines that advocate for workplace reproductive rights [15]. However, if women advocate for their conditions, they can be physically and psychologically abused and blacklisted from working [32]. This workplace censorship allows companies to maintain lower wages and poorer working conditions that disproportionately affect women.
Maquiladoras’ forced contraception on women is a direct violation of individual consent and bodily autonomy [15]. This practice strips women of their reproductive rights and reveals the maquiladoras’ systemic injustice, where corporations prioritize profit over human welfare. Additionally, contraceptives include many potential side effects that endanger women’s physical and psychological well-being, further perpetuating a cycle of social inequity [32]. The idea of distributive justice requires the equitable allocation of resources and benefits within an organization [34]. However, women working in maquiladoras receive fewer benefits while enduring invasive obligations, directly contradicting distributive justice [26]. The cycle of inequality and marginalization continues as the maquiladora system also violates procedural justice, which focuses on the fairness of processes and emphasizes principles such as voice, neutrality, and respect [35]. Under the maquiladora system, not only women but all workers are prohibited from advocating for their rights due to fear of blacklisting and job termination [32, 33]. These violations persist because companies lack enforcement and accountability.
Gender inequality violates the moral principle that individuals should be treated as ends rather than means. Kantian deontological ethical theory holds that actions are morally right or wrong according to whether they follow universal moral laws, regardless of the situation [30]. One of this theory’s key principles emphasizes that all people should be treated with respect and dignity rather than used as objects to further goals [31]. This principle further emphasizes that individuals should help others achieve their goals whenever possible, recognizing that humans possess autonomy and rationality [30].
A moral law has to be universally applicable. In this case, a global issue arises if all employers mistreat their workers, pay them low wages, and show a lack of concern for their well-being [30]. This issue will affect all workers by creating a world void of respect and dignity for individuals. Maquiladoras’ low wages and poor conditions expose a deeper systemic failure to grant maquiladora workers the fundamental dignity they deserve. It is a moral responsibility not only to respect women but also to respect all maquiladora workers and to uphold their rights and dignity.
The Ethical Responsibility of Engineers
Industrial engineers have a pivotal role in the maquiladora industry. Optimizing systems for cost-efficiency and high productivity often results in significant trade-offs [36]. Every design and piece of workplace equipment must consider human factors to ensure safety and efficiency. [36, 37]. Engineers have the responsibility to uphold principles such as the code of ethics and engineering virtues.
Virtue Ethics emphasizes moral values such as courage, honesty, and compassion in decision-making [38]. Despite employers and corporations framing maquiladoras’ employment as a privilege, the maquiladora industry’s poor conditions and disregard for workers’ health reveal a lack of compassion [38, 39]. Being an engineer not only requires building technical skills but also developing ethical responsibility in one’s decisions.
All engineers have the duty to uphold civic, moral, and intellectual virtues [40]. For example, civic virtues such as justice involve being fair to others, preventing harmful actions, and actively addressing unethical behavior [40]. Likewise, moral virtues require engineers to act honestly by respecting the rights and dignity of others when making optimization decisions, such as cost savings [40]. Respect is one such moral virtue that requires engineers to treat workers with dignity [40]. Lastly, engineers should uphold intellectual virtues, such as curiosity, when addressing safety or work conditions challenges [40]. It is essential to address issues that affect human health, not just technical challenges. Incorporating these virtues is necessary not only in manufacturing settings but in every workplace.
The Code of Ethics for Engineers provides established professional frameworks to emphasize workplace ethical values [41]. The code’s first fundamental principle is to ‘hold paramount the safety, health, and welfare of the public’ [41]. This principle requires professionals to prioritize protecting individuals from potential hazards by ensuring ergonomic workstations, efficient ventilation, proper wages, and adequate breaks [27]. Maquiladora workers often lack sufficient training on workplace safety precautions [27]. By ensuring the safety of machinery, workers’ well-being, and compliance with safety standards, engineers can fulfill their ethical duty to improve public welfare [41]. Individuals interact with technologies daily, expecting these technologies to improve their lives rather than harm them. Engineers must meet such expectations for workers by developing systems that prevent damage and prioritize workers’ health [41].
The Code of Ethics also commands engineers to act with “honesty and integrity,” meaning to avoid fraudulent enterprises [41]. During COVID-19, many maquiladoras violated this principle by continuing to operate despite a shutdown [24]. The code also holds that engineers should treat everyone in the workplace with respect, dignity, and fairness [42]. Women in maquiladoras have faced a long history of discrimination, such as poor wages and forced contraption [32]. Engineers must recognize these issues and take steps to enforce established standards [41]. Taking accountability and having high ethical standards will create a strong safety culture.
Future Considerations
Corporations tend not to consider morality when making business decisions, a phenomenon known as “moral muteness.” Moral muteness refers to avoiding ethical issues and hiding one’s moral beliefs, which is prevalent in technical fields [22]. Technical language can mask the ethical weight of decisions, making it difficult for engineers to appreciate the extent of harm it may cause [22]. Such language also introduces a bias for engineers to prioritize solving technical problems over addressing moral considerations [22]. A work culture that lacks ethical conversations can blindside workers, employers, and engineers [22].
Ethical engineering is beyond finding solutions to problems after they occur; it is about anticipating problems and taking preventive measures [40]. Moral imagination is the ability to be both ethical and practical while picturing innovative and creative possibilities [22]. The concept of “moral imagination” provides engineers with a framework for considering the ethical dimensions of their work [22]. Adopting this methodology can identify and mitigate potential risks before they occur.
Conclusion
Over the past century, workplace conditions have changed significantly. Working conditions have improved in the United States through better policies and practices [42]. However, maquiladoras in Mexico continue to face serious challenges. The exploitation of workers within the maquiladora industry violates fundamental human rights [2]. Transformative change is not only possible but imperative. The lack of labor policies and regulations makes it difficult to ensure workers’ well-being [43]. To achieve change, integrating strong business ethics can lead to employee well-being and prosperity, ensuring that companies do more than avoid legal issues [17].
Engineers and business professionals are at the forefront of decision-making, whether it involves cost efficiency or ethical responsibility. They have the responsibility to ensure that their choices balance both economic and moral considerations. We have the responsibility to inform and increase public awareness of working conditions to increase advocacy [17]. Despite workers being aware of the exploitation they face, limited opportunities force them to endure it to support their families [2]. Ultimately, systemic change must go beyond legal compliance and require an environment of ethical responsibility and accountability [22]. By making these changes, the industry could move towards balancing a growing economy that respects human dignity.
By Maria Belen Rodriguez, Viterbi School of Engineering, University of Southern California
About the Author
At the time of writing this paper, Maria Rodriguez was a junior majoring in Industrial and Systems Engineering. She was born and raised in Los Angeles, CA. She was involved in the Society of Hispanic Professional Engineers, serving on the transfer committee and as a Regional Student Representative.
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Further Reading Links
http://archives.cpajournal.com/old/11583331.htm, https://www.dallasfed.org/research/swe/2022/swe2203/swe2203b,
https://www.hrw.org/news/1996/08/17/mexicos-maquiladoras-abuses-against-women-workers
https://ir.law.fsu.edu/cgi/viewcontent.cgi?article=1173&context=jtlp