The Political Economy of Child Labor and Its mpacts on International Business

Business Economics, July, 2000 by S. L. Bachman

EXTERNAL: A firm or enterprise plays a part--beyond its direct business interests--in shaping opinions and policies concerning child labor in the local economy.

For reasons of altruism, image or other motivations, some firms play active roles to shape local-economy attitudes toward child labor and the educational institutions and social services that affect children. This third dimension has increased in prominence as global economic integration has led international business to playing a larger role in shaping the public policies of governments around the world.

What is Child Labor?

With these three dimensions in mind, the next thing that must be tackled is the question: What is "child labor"? The answer is fraught with anomalies and contradictions, reflecting a tangle of international standards, national laws, cultural practices and social expectations. The lack of a single answer complicates the process of formulating business responses to the issue.

It is important to note at the outset that the old stereotype of "child labor"--small children dwarfed by clanking machines in the textile mills of the early Industrial Revolution--fits only a small minority of child labor as defined today in international agreements or debates. To sum up, the phrase "child labor" today is a pejorative term that differs from the broader and less value-laden "child work." In general, "child labor" refers to children under 18 years old who work in both the formal and informal sectors, in conditions that are harmful or potentially harmful to the child. Underpayment of children for their work and other forms of exploitation, are also included.

One confusion surrounding this modern definition of child labor concerns the subject of age: At what age should a child be allowed to work? In what kind of job? One international standard, the ILO's 1973 convention on "minimum age" of work (Convention 138) sets the bar in adolescence. It declares that children should be allowed to work in most jobs if they are fifteen and older, in developed countries, or fourteen and older in developing countries. (The convention also approves of light work and apprenticeships for children as young as thirteen in developed countries or twelve in developing countries.) [11]

But Convention 138 has not been ratified by many Asian countries, where children's ages are hard to determine or where a large number of children begin to work at an earlier age and the government cannot--or more often, has not -- taken action to keep them in school longer. In an attempt to come up with a more universally acceptable standard, in 1999, the ILO adopted a new convention defining and calling for an end to the "worst" forms of child labor. Convention 182 defines the "worst" forms of labor to include several forms of illegal work (prostitution, forced labor, bonded labor and slavery) as well as jobs that are harmful to a child's mental, physical or moral well being. This narrower standard was adopted unanimously by the ILO's membership, comprising representatives from governments, business and labor unions. A recommendation, passed concurrently, lists the types of work that might be included in each state's definition of labor that is or might be harmful to a child's mental, physical or moral well -being. [12]