Coupon Counters Don't Necessarily Redeem Them -- U.S. Companies Rely On Cheap Labor In Mexico To Set Up Clearinghouses To Sort Refunds For Grocers

NUEVO LAREDO, Mexico - Most days of the week for the past eight years, Rosa Saldivar has sorted thousands of coupons, her hands putting slips of paper marked "50 cents off" or "free with purchase" into neatly arranged cardboard boxes.

Yet for all the hours she's spent poring over coupons, Saldivar, 25, has never redeemed one. She's never sampled Swiss Miss hot cocoa mix or any of the other products whose coupons she handles, never even traveled to the nearest store that accepts coupons, just a few miles from her home.

Saldivar's intimate connection with America's coupon culture comes instead from her job at a coupon clearinghouse in Nuevo Laredo, adjacent to Laredo, Texas, one of several along the U.S.-Mexico border where Mexican workers count billions of their northern neighbors' coupons each year.

In football field-size warehouses filled with long tables, computers and numbered boxes laid out in grids, thousands of people, almost all of them women, empty sacks of coupons that arrive from the United States by the truckload. They then sort and scan the coupons, calculating how much is owed to retailers who accept coupons in lieu of cash from customers.

"We're the ones who handle the coupons, but we don't use them," Saldivar said.

Since the 1994 North American Free Trade Agreement (NAFTA), a growing number of U.S. companies seeking lower labor costs have set up assembly plants called maquiladoras on the Mexican side of the border. As a result, there's a good chance your new television was put together in Tijuana, your jeans sewn in Ciudad Juarez.

But the idea of reducing costs by operating outside the United States dates to 1963, when U.S. businessman Arthur Nielsen moved his coupon clearinghouse from Iowa to Mexico.

Nielsen, better known for polling TV audiences, had begun processing coupons - buying them from retailers and getting reimbursed by manufacturers - in the 1950s. The number of coupons circulating had grown too great for the manufacturers' representatives.

The problem with the Iowa clearinghouse, Nielsen discovered, was that wages were too high to yield the profits he wanted. So he opened a plant in Nuevo Laredo.

The idea of using Mexican labor soon caught on with other companies. By the late 1960s, encouraged by the Mexican government and its desire to create jobs for migrant workers returning from the United States, more plants were opening along the border.

NAFTA made maquiladoras more appealing by lowering tariffs on goods assembled in Mexico. Today, there are 2,700 maquiladoras employing almost 1 million workers, and the U.S.-Mexico border is one of the busiest industrial corridors in the world.

"Mr. Nielsen opened the eyes of a lot of companies in the United States," said Javier Martinez, the manager of Nielsen's Nuevo Laredo plant, now owned by NCH NuWorld Marketing.

The recent growth of maquiladoras has made the border labor force more competitive and, therefore, more expensive. But with hourly wages that start at about 60 cents, it is still far more cost-effective to count coupons in Mexico than in the United States, where the minimum wage is almost 10 times as much.

"We certainly don't look at NAFTA as a negative, but we didn't see it as a significant change," said Charles Brown, vice president of marketing for NCH NuWorld.

In recent years, coupon use has declined, in part because the economy has been so good, Brown said. As a result, NCH NuWorld, which claims almost half of the coupon-processing business, has consolidated its operations, closing two of its five border plants. Still, with 5 billion coupons redeemed in the United States last year - 95 percent of them processed in Mexico - there is no shortage of coupons to count.

To help sift through them all, NCH NuWorld employs 2,500 people in Mexico, 90 percent of them women.

For all the coupons processed in Mexico, however, they've never caught on there. For a while the government outlawed them. But even now that they're legal, few companies use them. One of the reasons often cited is a lack of awareness of the promotional product.