05/12/97 REYNOSA-McALLEN: SONS AND DAUGHTERS RETURN

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REYNOSA-McALLEN: SONS AND DAUGHTERS RETURN

Some of the worst pockets of poverty in the U.S. can be found along the Texas border among the farms of the Lower Rio Grande Valley. Hundreds of thousands of people, many of them Mexican migrants or the children of migrants, live in settlements of shacks and decrepit mobile homes. In such colonias, unemployment can range as high as 30%.
More than any other part of the border, this region will test how much the economy on the U.S. side will be raised by low-wage factories on the other. In most maquiladoras, women with little more than junior-high-school education make up most of the labor force. Government labor-relations offices discourage independent unions, and tacit agreements among employers keep wages down. That limits the spending power pumped into the border economy.
Nevertheless, local officials on the U.S. side, anxious to create jobs for their own low-wage workers, realize their best bet is to persuade suppliers to set up businesses to service maquiladoras. To do that, officials in McAllen, Tex., are promoting their twin city, Reynosa, Mexico, as a prime maquiladora site. Reynosa now boasts 90 such plants, including most of Glenview, (Ill.)-based Zenith Electronics Corp.'s television production. Young people who had left the area to find jobs are returning.
Farther downriver, Brownsville and Matamoros are the easternmost border towns. Near the downtown bridge, heavily-barred currency exchange houses advertise cambio in bright lights. All along the border, on both sides, such houses do a thriving business, many of them serving as conduits for drug-money laundering, U.S. officials say.
CHALLENGE. A more solid sign of economic growth is the continued sprouting of maquiladoras in Matamoros, where Lucent Technologies makes telecommunications equipment. And neighboring Brownsville's low wages are attracting companies such as Tyco International's Mueller Div., which makes water valves. ''We're one economy,'' says Ricardo M. Luna Jr., a member of the Brownsville Economic Development Council. ''Prosperity has to go hand in hand.''
That is the challenge facing communities from the Gulf to the Pacific. In this dynamic region where First and Third worlds meet, deep disparities and contrasts are likely to persist amidst the welter of economic activity. While growth surely will lift Mexico's economy, narrowing the gap with the U.S. will take decades. Now, however, the two sides of the border are so harnessed that they can only move forward together.

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