The Political Economy
of Child Labor and Its
RIGHT OR WRONG, PERCEPTIONS THAT GLOBALIZATION LEADS TO EXPLOITATION OF CHILDREN ARE BECOMING AN IMPORTANT PROBLEM FOR INTERNATIONAL BUSINESS.
By S.L. Bachman
S.L. Bachman is a visiting scholar
at Stanford University's
Asia/Pacific Research Center. She
has written for newspapers and
magazines in Asia and the United
States, including the San Jose
Mercury News and taught at the
Graduate School of Journalism at
the University of California,
Child labor is linked to global business directly and, more
commonly, indirectly. Critics blame increased trade and
financial flows for increased child labor, and those criticisms have undermined the legitimacy of further trade and financial liberalization. Companies—including multinationals such as Nike, Wal-Mart, Ikea and the Brazilian subsidiaries of U.S. and European automobile manufacturers—have responded with a range of initiatives. Unless business responses alleviate the worst forms of child labor, the legitimacy of continued trade and financial liberalization will continue to be undermined by perceptions that liberalization disproportionately hurts children, especially child workers.
Business Economics • July 2000
hildren have worked for as long as families
have needed all hands to pitch in. Beyond
defining work as a means of survival, however, defining what work is appropriate for children and what (if anything) to do about inappropriate work involves more complex judgments—especially for firms doing business in the global economy. The International Labor Organization estimates that
around the world 250 million children between the ages of
five and fourteen work, about 120 million of them fulltime.1 Some of these children work in factories and other workplaces in the formal economy, but the vast majority
work in informal enterprises, agriculture and in homes.
International firms are part of this economy not only if they hire children, but also if they buy goods or services from
children or from companies that make such purchases.
International business has come under increased
pressure from social activists, trade unions and others to
help find new solutions to end exploitative work for children and to help them get the education and training they need to become productive adults. Companies in the spotlight include respected multi-national corporations as well as many other lesser-known businesses.
Child labor has been a concern of the formal, industrial economy since the beginning of the Industrial Age. By the end of World War II, however, most developed
The Political Economy of Child Labor and Its Impacts on International Business
countries had passed laws
against child labor, at least in In some cases, international firms have been initially industry. Child labor had
declined in developed coun- unaware that their production has a child-labor comtries in any case, due to a combination of several factors. ponent. Even in the United States, children have been These include the increasing found to provide products to major corporations. sophistication of technology in
the workplace (reducing the
sion will sum up lessons about international business and
demand for low-skilled workers), greater productivity and
consequently higher wages (reducing the need to send
children to work instead of school) and higher school
Int erna tional Business and Child Labor: Three
attendance (reducing the supply of child labor).
Child labor re-emerged as a public concern in the
Business’ role in the economy of child labor has at
1980s and 1990s. This time, worry was expressed across a
least three dimensions, both in the formal and informal
broad spectrum of opinion—from United Nations ageneconomic sectors. The three dimensions are: cies, to non-governmental organizations, educators, social
workers, trade unions,...
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