People who argue that international businesses exploit children by employing them amaze me. Despite the fact that every industrialized society went through a period where child labor was widely accepted, many people believe child labor is unnecessary and abusive. However, this is clearly not the case – child labor is often necessary.
Businesses are often accused of unfairly taking advantage of children by employing them in factories throughout the developing world. What is not mentioned is that the alternative to these children working in factories is often far worse.
For instance, a well-known German garment maker, under domestic and international pressure, laid off 50,000 child workers in Bangladesh. As the wealthy, allegedly progressive citizens of the developed world cheered, the children suffered. Tens of thousands of formerly "exploited" workers turned to prostitution, begging or crime, according to Oxfam, a British charity organization. Without a stable income, many perished from starvation. The good intentions of uninformed Westerners left thousands of kids dead.
It makes sense that kids want to work. Often, if they don’t, they’ll go hungry or face much worse. Since when has paying someone for a job they wanted to do ever been abusive? If someone wants to work and a company wants to hire, the person’s age shouldn’t matter when deciding if its exploitation. The term "exploitation" should be reserved for forced servitude such as slavery, not the Marxian interpretation that concludes all voluntary employment is exploitation.
Why can’t we assume that these individuals are economically rational? If they take the job, it’s probably because the alternatives are worse. If all transactions are voluntary, why can’t we assume that the transactions would be beneficial for both employer and employee? It’s easy to assume that since Americans have it easy, everyone else does too.
Some ask, can’t businesses just pay a bit more? It is worth noting that corporations often do pay substantially higher than alternative jobs do. This should be obvious because otherwise businesses wouldn’t be able to convince people to work for them.
Such a question is flawed because it fails to recognize why businesses invest in developing countries. The driving factor of most investment is the relatively low cost of labor. If the cost of labor increases, it deters companies from investing in developing countries, leaving thousands without jobs. Remember the basic economic logic we learned in Introduction to Macroeconomics, as preached by Milton Freidman, that holding a wage over the equilibrium price leaves more unemployed and, in this case, victims of starvation.
Just more than a century ago, child labor was prevalent in the West. Anti-child labor laws of the Western world provided no recourse to children who needed to survive by working. These governmental interventions forced children either into insufferable poverty or working for older factories that were off the beaten path and immune to governmental regulation, and also where the conditions were notably worse.
We will see the end of child labor and poor working conditions when the productive capacity of all individuals is unleashed, when it is economically unnecessary for child labor and when free market alternatives exist. Child labor and poor working conditions will not be solved through legislative fiat, but only through an increase in the standard of living.
Politicians and factory inspectors were not the solution in the West, nor will they be the solution in the developing world. Investors and manufacturers, whose efforts in development lead to a rise in real wages and the standard of living, will be the real emancipators.
The more an economy grows, the less dependent it becomes on child labor. Though the short-term implications may be initially unappealing, it is quickly evident that child labor benefits both those employed and those employing.
Gilson, a business sophomore, can be reached via [email protected].
