Federico Lozano, MBA ’09: Finding Legitimate Jobs Abroad for Semiskilled Workers

Puentes Global, begun with an inaugural Social Innovation Fellowship, aims to save laborers from poverty or worse with positions in developed nations.

July 10, 2009


Hlin Grung, Federico Lozano (founder of Puentes Global, MBA ’09), Yoel Bank Feldman (MBA ’08), and Debbie Turquie at the Hispanic Business Students Association Latino Leadership Banquet

Semiskilled workers, stuck between the poorest of the poor and the middle class, account for some 70 percent of the Latin American population. They possess valuable skill sets that are in high demand at numerous companies around the world.

Yet many semiskilled laborers in Latin America are unemployed or underemployed, working for meager wages. Moreover, hundreds of Mexicans, in particular, die each year while illegally attempting to cross the U.S. desert in search of a viable livelihood.

International recruitment agency Puentes Global, or “Global Bridges,” is working to alleviate poverty by connecting poor semiskilled laborers from the developing world with jobs in the developed world. The nonprofit will launch its efforts by finding jobs in Spain for Mexican workers such as machine operators and repairmen.

Puentes Global will take advantage of labor laws in Spain that welcome specific international workers, the government’s urgent need to increase the country’s worker base amid demographic and cost pressures, and Spanish companies’ demand for low-cost labor. Simultaneously, the organization will serve Mexico’s many poor yet skilled workers, and address the wish of the Mexican government to increase remittances — income transfers from workers abroad to their families back home, which represent the country’s second-largest source of foreign revenue.

The Problem

When Federico Lozano was traveling in rural Mexico in 2002, he came upon a funeral procession with three coffins bearing the sign “Llagaron al otro lado” — “They made it to the other side.” The deceased were three young Mexican men who had perished from exposure in the Arizona desert after crossing the border illegally in search of work.

“The sign meant they had made it not just to the United States, but also to heaven,” says Lozano. “I never got that sign out of my mind.”

Many semiskilled laborers in Latin America are unemployed or underemployed, working for wages of between $8 and $18 a day at best. Those who try go elsewhere in search of a viable livelihood frequently put their fates in the hands of drug rings that charge exorbitant fees in exchange for safe passage and lucrative jobs — many of which never materialize. Some of these individuals end up in the sex-slave trade.

Each year, hundreds of Mexicans die while attempting to enter the United States clandestinely in an effort to find work and ease their economic desperation. Those who do make it through often must leave behind spouses and children. While their families endure their absence, the immigrants themselves face language and other cultural barriers in their new homes.

The Novel Idea

The semiskilled workers who make up the majority of the Latin American population are willing and able to do the dangerous, difficult, and dirty jobs that most people in developed countries no longer want. Such jobs can thus provide a valuable ticket out of the cycle of poverty.

Lozano, MBA ’09, and Concepción Galdon co-founded Puentes Global to alleviate poverty by empowering semiskilled workers in the developing world to work in the developed world. It also offers labor-intensive companies in the industrialized world an alternative to delocalizing their labor forces in today’s era of global competition.

“Puentes Global is taking an underground industry — the transportation and recruitment of semiskilled labor — and making it legitimate while lending dignity to the individuals involved,” says Lozano, Puentes Global’s CEO. “It’s when no official solution is available that the worst of human trafficking and exploitation is to be feared. This is about making the best of a difficult situation.”

The organization is focusing its initial efforts on connecting the vast pool of Mexican workers with jobs in Spain. This European country is in many ways the ideal destination for such workers, since the demand for their services is great and the government is anxious to increase the nation’s labor base. Spain’s laws allow Mexicans to enter the country for work and to bring in their families to establish legal residency within a year, minimizing the trauma of dislocation. The similarities in culture and language between Mexico and Spain allow for relatively smooth transnational transitions in many cases.

Lozano sees opportunities for workers such as industrial machine operators, welders, elevator repairmen, sheet metal laborers, and electrical linemen. Even with the current economic downturn, Spain still has a great need for labor in areas including the maritime industry, where machinists, cooks, and other workers are in high demand. Meanwhile, Mexico has a surplus of trained individuals who have been employed at the country’s large ports. This industry will thus likely be Lozano’s first area of concentration.

Puentes Global is taking an underground industry and making it legitimate while lending dignity to the individuals involved.
Federico Lozano

Lozano chose to establish Puentes Global as a nonprofit in order to help develop the necessary relationships with governments and nongovernmental organizations, as well as the other kinds of partners that he is looking for.

“Establishing deeply rooted trust with workers, companies, and governments is absolutely essential,” observes Lozano. “This industry has been marred by unscrupulous actors. Our nonprofit status will help us reach out and collaborate across many sectors effectively.”

At the same time, the organization is being managed with the rigor of a business. The model requires few assets and infrastructure; the main investment up front is transportation and housing costs for the workers, which they will eventually pay back. Puentes Global’s primary income, in the form of commissions from hiring companies, will allow it to be self-sustaining.

Lozano explains: “We’re essentially a non-dividend company; the only differentiating factor between us and a for-profit business is that we rechannel our profits back into the organization. This will help Puentes grow and offer more and better services to an increasing number of workers and hiring companies going forward.”

He plans to expand the model to several other countries once it is successful in the Mexico-Spain corridor.

Puentes Global promises to create wealth in developing and developed nations alike. According to the World Bank, a mere 3 percent influx of workers to high-income countries from 2001 to 2025 would increase global income by $356 billion. Much of this would accrue to households in poorer countries, but $139 billion would benefit those in the developed world, as well. By legitimizing an activity that has traditionally exploited those who are already suffering, and addressing real business needs, Puentes Global’s model promises to lead to wins all around.

The Innovator

Lozano, whose father is Mexican and whose mother is Spanish, has been haunted by the suffering of Mexican immigrants all around him since he was a child.

“Growing up in San Diego as an immigrant myself, I saw the conflicts, tensions, and tragedies that come with economic disadvantage and forced immigration,” he recalls. “However, unlike the vast majority of migrants, I was fortunate enough to have been born into a family that offered me a great education.”

“I knew that someday, I would address this terrible social and economic problem,” Lozano says.

He became a world traveler and global businessperson thanks in part to an international education. He carried out undergraduate work in international relations, political theory, and sociology in Boston and Barcelona, Spain, earning full tuition and serving as valedictorian of his class at Universitat Ramon Llull-La Salle in Barcelona. His thesis, on the link between international migration and development, won a prize for best undergraduate thesis.

When he entered Stanford GSB’s MBA program in 2007, he shared with classmates and professors the idea for an organization that would pair disadvantaged workers with jobs, garnering significant support in the form of contacts, information, and other resources. A summer serving as a strategic business development intern with D.light Design, a global social enterprise run by Stanford graduates, provided further knowledge and exposure. Now, after building a business plan for the past two years, Lozano is ready to launch Puentes Global, his own social venture.

Federico Lozano received an MBA from Stanford GSB in 2009. That year, he was awarded one of the first two Stanford GSB Social Innovation Fellowships, which provide up to $180,000 in funding, along with advising and support, to graduating students who want to start a nonprofit venture that addresses a pressing social or environmental need during the year after graduation.

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