The Child Labor Problem and the Need for International Labor Standards
Palley, Thomas I., Journal of Economic Issues
Child Labor as a Problem of Labor Markets and Economic Development
The problem of exploitative child labor has received much attention in recent years. According to the International Labor Organization (ILO) there are approximately 250 million working children aged between five and fourteen, of which at least 120 million are involved in full-time work that is both hazardous and exploitative. Such labor is spread throughout the developing world. Measured in absolute terms, Asia has the highest incidence of child labor (152.5 million), followed by Africa (80 million) and Latin America (17.5 million). Measured in proportional terms approximately 40 percent of African children work, while 20 percent of children work in Asia and Latin America respectively. (1)
Driven by public outrage in developed countries, the issue of exploitative child labor has received increasing attention. Yet solutions remain elusive, and they are made more complicated by the fact that the extent of child labor reflects a country's level of economic development. This means that developed country calls for prohibition can seem hollow in the eyes of developing countries, which maintain that the developed countries themselves relied extensively on child labor when they were at a similar stage of economic development.
Given this contentious environment there has been a tendency to promote policies of unofficial voluntarism whereby private producers adopt codes of practice that bar the use of child labor. These voluntaristic practices are exemplified by private labeling schemes, such as Rugmark in the carpet industry, which certify to consumers that a product has been produced without child labor.
Such labeling policies focus exclusively on child labor and implicitly treat it as a stand-alone problem that can be addressed by independent stand-alone policies. This paper argues for a profound reformulation of the child labor problem whereby it is viewed as a labor market and economic development problem. Child labor is intimately connected to the operation of labor markets, and solving the former therefore depends on solving problems that afflict developing country labor markets. Child labor is also connected to economic development, and addressing the child labor problem therefore also requires policies that foster development. Labor market dysfunction and under-development are the root causes of exploitative child labor. Viewed in this light, the ILO's core labor standards become a critical instrument for solving the child labor problem because they tackle both of these root causes.
Finally, there remains a place for voluntaristic codes of conduct, but it must also be recognized that such codes cannot address the underlying roots of the problem. More sunshine is always better than less, and voluntaristic codes can serve an extremely valuable function in galvanizing public opinion to move against child labor and labor market exploitation. However, it is important that codes not be presented as a substitute for official core labor standards. (2) If this happens, voluntaristic codes will make a negative contribution by fracturing understandings and diverting support away from core labor standards.
Labor Standards and the Link to Institutional Economics of the Progressive Era
Before turning to specific analysis of the problem of child labor and its relation to labor standards, it is worth noting how today's debate over labor standards has clear links with the early twentieth century Progressive Era-thinking of American institutional economists. One notable link is with John Commons' (1909) theoretical concept of "competitive menace." Commons developed the notion of competitive menace in his history of American shoemaking, describing it as operating through the marginal producer who is used to bid down standards and wages throughout an industry. …