Tuesday, April 16, 2013

Child Labor

Written by: Gjergji Gega

If child labor as a mass phenomenon occurs not because of parental selfishness but because of the parents’ concern for the household survival, the popular argument for banning child labor loses much of its force. However this assumption about parental decision-making coupled with the assumption of substitutability in production between child and adult labor could result in multiple equilibria in the labor market, with one equilibrium where children work, and another where adult wage is high and children do not work. (Basu, Van, 1998).
Child labor has been a persistent problem throughout the world. Though restrictions on child labor exist in most nations, many children that live in undeveloped countries do work and leaves them open to exploitation from foreign corporations. The International Labour Office reports that children work the longest hours and are the worst paid of all laborers (Sadiqi and Patrinos, 1998)
Africa and Asia together account for over 90 percent of total employment (Basu and Van, 1998). Underdeveloped countries such as Ghana, Tunisia, Burma, and Cambodia have a really high unemployment rate and a corrupt government that does not enforce child labor laws. This makes it very appealing for companies that want to cut costs down and increase revenue. Companies such as Hershey’s, one of the largest companies in North America are raking in over $6 billion in annual revenues (Bloxam, 2012). After looking at the revenues of these companies, it is not surprising that they are paying workers at an extremely low rate and using child labor.

Attributes to Child Labor
Child labor is especially common in rural areas. For example, 66 percent of the officially employed children aged 6 to 14 years in Peru work in the countryside (Basu and Van, 1998). There are many reasons why child labor occurs in undeveloped countries. The most important reason for child labor is poverty, and the induced pressure upon them to escape from this world of slavery. Schooling is another contributing factor to child labor. All parents would like their children to get an education. When there is no access to school, or there might be a low quality of education, parents will want their children to find ways to make money or learn new skills such as agriculture to bring income to the family. This vulnerable state leaves children prone to exploitation.

Exploitation of underdeveloped countries
During the past decade the economics of the whole world has been in a declining state. Due to the declining state of our economics and prices have kept rising. Companies have found different ways to cut costs down. Some ways that companies have been able to cut costs down are outsourcing and using child labor. Even though this may not be legal or ethical in the United States some companies do capitalize on child labor. Companies such as Nike, Apple, Microsoft, and Hershey’s exploit the lack of laws from underdeveloped countries.
Just this month Whole Foods Market said it has halted orders of Scarffren Company’s artisan chocolate brands over concerns about child labor in Hershey’s West Africa supply chain (Stevens, 2012). Another example of a famous company exploiting child labor is Nike. One of the plants (Subakumi Plant) in Indonesia, say that supervisors frequently throw shoes of them, slap them in the face, kick them, and call them dogs and pigs. It’s understandable that child labor laws are not the same throughout the world. This fact does not mean that company’s such as Hershey and Nike don’t have responsibility for every supply chain or plant managers that break those laws. These companies have to be held responsible, but at the same time need to find solutions and ways to reduce or completely abolish child labor. Most companies have begun to work to find ways to make life better and fair for workers in underdeveloped countries.
Solutions for Child Labor
Abusing human rights can be costly and can have a negative image on a company. Most companies are changing policies and trying to find ways to help workers. Nike is one of the companies that is taking a big step forward and is allowing outsiders from labor and human rights groups to join the independent auditors who inspect the factories in Asia, interviewing workers and assessing working conditions (Cushman, 1998). Another company that is committed to eliminating child labor is Hershey’s. Hershey’s has committed to sourcing 100 percent certified cocoas for all its products by 2020 (Stevens, 2012). Hershey’s also introduced a program called COCOALINK. COCOALINK distributes information about climate and pest control (DuBois, 2012). . Programs such as COCOALINK help farmers double their crop yield in a couple of years (DuBois, 2012). All these different programs and solutions will educate managers to provide better conditions for workers and at the same time, eliminate child labor.
Employers have always capitalized in underdeveloped countries where they know that laborers cannot legally form unions, and where child labor laws are not enforced. This does not make it morally or ethically right for companies to exploit children in poor rural areas. Companies such as Nike and Hershey’s need to lead by example, by following not only the laws of that country but also international laws of child labor. If laws are not forced, then child slavery will continue and these children will be deprived of the simple joys of childhood.

Siddiqiq, Faraaz, Patrinos A., Harry (June 1998). Child Labor: Issues, Causes, and Interventions.

Basu, Kaulshik, Van H., Pham. The Economics of Child Labor. Vol. 88, No 3 (June., 1998), 412-427.

Fallon, Peter,Tzannatos, Zafiris. (February, 1998). Child Labor: Issues and Directions for the World Bank.

Stevens, Harry (October 19,2012). Child Labor Concerns Across Hersheys Supply Chain Prove it Pays to be Proactive   .GreenBiz.

Cushman, H., John, (May13, 1998). International Business; Nike pledges to End Child Labor and Apply U.S. Rules Abroad.

DeBois, Shelley. (February 7, 2012). How Big Chocolate Plans to Save its Cocoa Supply. CNN Money.

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