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At Mexico’s Tourist Resorts, Exploitation Is the Bottom Line

Every winter, thousands of North American tourists flock to sunny destinations in Mexico to be served by workers on poverty wages. The Mexican government has promoted tourism as a route out of poverty, but the profits from the industry are flowing away from local communities.

The Grand Velas resort in Riviera Nayarit, Mexico. (Velas Nayarit Oceanfront Resort / flickr)

Every winter, thousands of Canadian and American visitors flee the cold for Puerto Vallarta in Mexico. Over the last fifteen years, the destination’s popularity has spawned a tourist enclave called Riviera Nayarit, north of Puerto Vallarta along the Banderas Bay.

Filled with luxury resorts, gated communities, and condo buildings, as well as world-class golf courses and other amenities, this destination was developed to appeal to international visitors — and investors. Between January and June of 2019, Riviera Nayarit received more than four hundred thousand international visitors — about 10 percent of Mexico’s total — and four out of five were from Canada and the United States.

According to its official website, people should consider moving to Riviera Nayarit “to improve your quality of life” while reducing the cost of living. But this is not how it plays out for the local workers, who earn low wages and lack protections. According to Numbeo, the monthly cost of living for a family of four in the Puerto Vallarta region is $1,657 USD, not including rent. In 2020, the monthly median salary in Riviera Nayarit was about $500 USD, less than one-third of that figure.

Raking in the surfeit money of the rich and the hard-won dollars of the vacationing middle classes, Mexico’s tourism industry takes advantage of the disjunction between low-wage workers and high-wage customers. It justifies the dire working conditions of its resorts with hand-waving appeals to the rules of the free market.

The Cost of Doing Business

To remain competitive and attract visitors from the United States and Canada, the Mexican tourism industry relies on precarious labor and exploitative practices — and on the willingness of its employees to accept such conditions in the usually forlorn hope of getting a better deal down the line. As Felipe Rubí González, a lawyer and researcher at the University of Quintana Roo, notes: “Employers are cashing in on a reduced payroll — and workers accept it happily.”

In 2010, after spending two years in Vancouver perfecting his English, Javier Gradilla moved to Riviera Nayarit searching for work opportunities. Armed with a bachelor’s degree in economics, he applied for an administrative job at a hotel but was offered a role in reception instead. “Obviously, I wanted to be a manager,” Gradilla says jokingly. He had to adjust his expectations because, as he notes, administrative job openings are hard to come by: “You can wait for an opening if you want, but otherwise you can start at a lower level, learn about the hotel, and, at some point, managers will help you move up.”

Eager to work, Gradilla “accepted the challenge” and took the job in reception. “Hotels have a very heavy workload,” he says. The hours are long and the schedules erratic. “If a coworker doesn’t come to work, you have to fill in for them — and sometimes work double shifts.”

But even ground-floor jobs like the one Gradilla secured can be hard to attain. The requirement for English fluency is a barrier for many — Gradilla’s first interview was conducted in the language.

“If you want to grow, you must learn English first,” said Denise Jimenez, a time-share sales associate. For years, she would take an English class on her weekly day off. “But it was very difficult — I was never able to complete the courses,” she says, alluding to the heavy workload she had early in her career.

Learning English still does not guarantee workplace advantages. Currently, Jimenez does not have any benefits or a base salary at her sales job. “That’s all there is right now,” she says in a defeated tone.

Labor Squeeze

The wealth produced by workers in Mexico’s tourism industry stays in the pockets of corporations and their shareholders. Because of systematized low wages and precarious labor conditions, it does not reach the local communities or improve their quality of life.

Organized labor in Mexico has been in a steady decline since the 1980s. Unions have lost some of their bargaining power in collective contract and salary negotiations, and they have also been hobbled by allegations of corruption. “Existing unions are entirely corporate — they belong to a political party,” Rubí González notes.

Furthermore, workers who do organize or litigate against their employer risk losing the opportunity of being hired in the upcoming high season. As Rubí González explains: “Corporate groups know each other, and they can say, ‘Hey, this individual sued me,’ or ‘This individual is unruly.’”

Instead of organizing to better their conditions, tourism workers at Riviera Nayarit attempt to leverage the “unique growth opportunities” provided by their employer. “People have been upgrading their skills,” Gradilla said. “You can find people who started as a janitor and now they manage the building maintenance department.”

According to Elsa Urrea, a casino manager, workers have plenty of opportunities to improve their skills. “There’s a lot of schools that offer educational development programs with flexible schedules — there are classes even in the middle of the night,” she says.

However, Rubí González contends that these programs are part of the problem, since they increase the availability of skilled labor and bring down the remuneration of the work: “Because of supply and demand, there are more folks ready to accept any work conditions.”

Propping up the Market

The Mexican state promotes tourism from the top down, with promises of jobs and opportunities, as a large part of its bid to boost foreign investment. The success of the tourism industry, according to the government’s theory, will help alleviate poverty in marginalized regions. The federal government coordinates the planning and development of tourism enclaves, provides subsidized loans to private operators, and streamlines the land-acquisition process to attract foreign investment.

Since 2000, foreign direct investment has skyrocketed at Riviera Nayarit. Today, more than half the population of Riviera Nayarit works directly in the tourism sector. But the bulk of jobs are in low-paying service-sector employment.

Due to the seasonality of tourism, many jobs in these fields are outsourced to companies that hire workers on short-term contracts or as independent contractors without benefits. This practice was illegal until 2012, when an amendment to Mexican labor law — rationalized as a move to promote flexibility and competitiveness — gave employers free rein to legally strip workers of their rights.

Last September, Mexico’s president, Andrés Manuel López Obrador (AMLO), introduced a bill to ban outsourcing in the tourism industry. Corporations and business associations have fiercely opposed the bill, claiming that it will be a “barrier to competitiveness.”

Both permanent and short-term tourism workers are at constant risk of losing their contracts. In her last job as a sales associate at a resort, Jimenez would work twelve-hour days, six days a week, during the high season. “We worked so many hours that obviously weren’t paid,” she recalls.

Jimenez was paid in commissions, which would dry out during the low season. “All the money we earned during the high season, we spent in the low season — paying the rent and such,” she explains. Jimenez kept her position for ten years for fear of losing her permanent contract, but in the end, she gave up on it — the toil was not worth the reward.

Business After the Pandemic

When the pandemic hit last year, nearly 10 percent of the permanent workers in the state of Nayarit lost their jobs. At Riviera Nayarit, employers laid off eight thousand permanent workers and did not renew the short-term contracts for temporary workers. Jimenez’s husband, who worked on a short-term contract as an entertainer at a hotel in Puerto Vallarta, was one of the casualties.

“Hotels tried to keep staff for as long as they could,” Jimenez says. “But in the end, they just kept the permanent staff, the workers who were hired in the old system.”

While the pandemic has been a blow to the livelihoods of the locals, international resorts seem to be cashing in. Two new luxury resorts opened last fall at Riviera Nayarit, and four more are expected in 2021. When the COVID-19 restrictions slowly started to lift in June, many permanent workers were called back to their jobs, but independent contractors are still waiting.

Tourism businesses, meanwhile, are feeling sanguine about the future. “The Riviera Nayarit continues to attract national and international hotel groups, which contributes to its growth in terms of tourism offerings,” Marc Murphy, managing director of the Riviera Nayarit Convention and Visitors Bureau, said in the destination’s official blog last summer. “We’re very happy, because despite the pandemic, investors continue to place their faith in the destination.”

Hotel resorts in Mexico need an organized response to the exploitative practices of tourism. Without it, global hotel chains will continue to pay locals peanuts. The trickle-down theory of economic development has always been a comforting myth: without deliberate intervention to direct the flow of wealth downward to workers and communities, the great tourism rip-off will carry on regardless.