Introduction
Around 264 million children under the age of 15 years are working, 64 percent of these jobs come under the child labor category in legal terms (Edmonds, 2015). Child labor has become one of the causes and one of the consequences of limited or slow economic growth. Child labor dampens the future economic growth via its negative effect on child development and decreases the current growth by rejecting the adoption of skill developing technologies and reduces the unskilled wages. The limited economic growth in developing countries, leads to facilitation of low-paid jobs that are filled by child labor. Therefore, child labor and the speed of economic growth have cause-effect relationship with increased child labor leading to lack of economic development and limited economic growth facilitating child labor.
Relationship between Child Labor and Economy
On the global economic scale, several factors are causing child labor. Even though countries might agree on the relevance of labor standards, in reality, several obstacles remain in the implementation of child labor. The relationship exists between economy and child labor due to global competition, structural adjustment policies and free trade rules.
Global Competition
As MNCs expand beyond borders, nations, mostly compete for available foreign investment, jobs and industry. Due to international competition, child labor reforms are slowed down by encouraging governments and corporations to seek lower labor expenses by resisting the international standards and repressing activism of trade unions (University of Iowa, n.d.).
Free Trade Rules
Child labor occurs mostly due to children and their families being poor and lacking the options of education and employment. The United Nations Human Development Report has identified unfair trade terms as one of the main obstacles to economic progress in developing countries. Several developing countries are reliant on exporting their commodities that suffer from falling prices caused by increased global competition and concentration of business with a limited number of businesses (University of Iowa, n.d.). With a concentration of business and increased global competition, the nations with the cheapest labor the jobs.
Debt and Structural Adjustment
Developing nations, mostly carry huge interest payments on the development loans taken from the IMF and the World Bank. These developmental loans come with policies that require structural adjustments such as weakening the labor laws, deregulation, cutting government spending on education and public sector employment. These structural adjustments intensify the economic conditions in a country and leads to inadequate education funding and poverty, directly leading to child labor (University of Iowa, n.d.).
Cause of Child Labor
High Unemployment and Poverty Level
Poor families and children are reliant upon using child labor as a means to attain basic living necessities. According to UN statistics, more than 25 percent of the global population is living under poverty. The intensified poverty levels in several parts of Asia, Africa and Latin America are causing several children to work as child labor (University of Iowa, n.d.).
Limited Access to Free/Compulsory Education
In the year 2006, around 75 million children were out of school, leading to decreased opportunities for children and the communities. In 2009, United Nations revealed that around $10-30 billion annually were needed to achieve universal education. The irony is that the number is less than 2 percent of the annual global military spending (University of Iowa, n.d.).
Violation of existing codes and laws
Even though there are codes and laws prohibiting certain activities, violation is highly common. For instance, the manufacturing and export of commodities often require multiple layers of manufacturing and outsourcing that makes it tougher to monitor who performs labor at every stage of the process. Extensive use of subcontracting might intentionally or unintentionally keep child labor use hidden (University of Iowa, n.d.).
Inadequate Laws and Enforcement
Throughout the world, the laws for regulating child labor are mostly not enforced or come with exemptions allowing child labor to continue in a few sectors, especially domestic work or agriculture. Even in nations where child labor laws are strong, labor inspection offices and labor departments are often under-staffed and under-funded, or the courts might fail in law enforcement. Similarly, several state governments might allocate limited resources for enforcing the child labor laws (Iowa University, n.d.).
Child Labor Cases
Child labor in the developed countries is considered to be significantly low, but the 1 percent share means that the number is above 2 million. Child labor in developed countries is facilitated by unemployment of parents. The majority of the child labor in developed countries comes from ethnic minorities such as gypsies in Europe, Inuits in Canada, Maories in New Zeeland, the aborigines in Australia, blacks, Latinos and natives and in the U.S. Others come from the migrant communities, which provide a significant number of child laborers. In the United States of America, 16 percent of the children are living below the poverty line and the number of children working in agriculture is above 200,000. Another example is New Zealand where no relevant statistics are available concerning child labor, but annually one child is victim to work related accidents (Szalay, 2010).
Impact of Child Labor on Society
Welfare of Nation
Child labor has a negative impact on a country’ welfare as many children are unable to complete their education. An increase in the number of uneducated children increases the illiteracy rate, which hampers the economic growth of a country. In addition, it reflects poorly on human development (Srivastava, 2012 p. 1-3).
Unemployment
Lack of education for children also leads to unemployment after they grow up, as finding jobs is tough for them without basic knowledge and job skills. Since, lack of education leaves them without basic skills, the unemployment rate increases overtime (Srivastava, 2012 p. 1-3)
Limits Economic Development
For businesses, child labor remains one of the best ways to lower wages. This leads to lower per capita income of the country, causing slow economic growth and affecting the long term economic development (Srivastava, 2012 p. 1-3)
Other Impacts
Children unable to find employment resort to begging or prostitution, which is a common occurrence in several poor nations. Many others become thieves, just for making quick money to help their family survive (Srivastava, 2012 p. 1-3).
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Conclusion
Child Labor is a common occurrence in today’s global economy. Even though child labor is a developing country problem, many developed countries also witness child labor practices. Even though there are laws prohibiting child labor, the globalized economy is finding ways to employ child labor and ruin their future and economic development of poor countries. Child labor and economic development have cause-effect relationship as global competition, free trade rules and global debt are creating opportunities to facilitate conditions for child labor. Child labor is still exists practiced in several because of the high unemployment and poverty level, limited access to free/compulsory education, violation of existing codes and laws and inadequate laws and their enforcement. The negative impact on the society is seen through the increase in illiteracy and unemployment rate, limited economic development, and other social problems such as crime, begging and prostitution among children.
Reference List
Edmonds., E. (24 August 2015). Economic Growth and Child Labour in Low Income Economies. Available: http://glm-lic.iza.org/publications/synthesis_papers/21/economic-growth-and-child-labour-in-low-income-economies. Last accessed 26 March 2016.
Srivastava, K. (2012). Child labour issues and challenges. Ind Psychiatry J, 20(1), 1-3. doi:10.4103/0972-6748.98406
Szalay., A. (2010). Child Labour in the Developed Countries. Available: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1869170. Last accessed 26 March 2016.
