Protecting the innocent or protecting special interests? Child labor, globalization, and the WTO.

• Jurisdiction: United States
• Date: 22 June 2005
• Author: Samida, Dexter
• Published date: 22 June 2005
• Author: Samida, Dexter

INTRODUCTION

For those in wealthy countries, the idea of children toiling in factories or fields seems like a relic from a bygone age. However, for too many children in the world this is still a sad reality. Many children work in hazardous conditions. There were an estimated 211 million children working worldwide in 2000. (1) Of these 211 million children, approximately 8.4 million were involved in child trafficking, forced and bonded labor, armed conflict, prostitution and pornography, and other illicit activities--the worst of the worst forms of labor. (2)

Poverty, income variability, debt, lack of access to credit, and lack of educational opportunities are cited as causal factors. (3) This article focuses on the oft-suggested link between trade and child labor.

This article considers two strategies that the international community might consider in order to reduce the prevalence of child labor. Part I considers whether countries can combat the scourge of child labor by becoming less open to foreign trade and globalization. Specifically, this part of the article looks for empirical evidence supporting or negating the link between globalization and child labor. Part II considers the potential effectiveness of a unilateral U.S. trade ban and whether such a ban would be legal under World Trade Organization law.

1. GLOBALIZATION AND CHILD LABOR

   The fact is that the [World Trade Organization]'s policies are creating conditions for the accentuation of poverty and the decline in the condition of workers everywhere. Child labor is one manifestation or effect of the demands being placed on the majority of the world's population under a neo-liberal economic regime. (4) If globalization is responsible for vast increases in the prevalence of child labor then more restrictive trade policies should enable developing countries to combat the growth of child labor. This argument relies on the assumption that globalization is in fact causing more child labor. Many commentators are convinced there is a link.

   For example, Madeleine Grey Bullard, in her award-winning journal article, (5) argues that "[g]lobalization could offer children an escape from lives of toil and drudgery, but instead, it draws more children into servitude." (6) In nearly identical words, Bullard's source for that assertion claims the same thing. (7) Interestingly, neither article has figures demonstrating that an increase in child labor has in fact occurred, irrespective of the cause. (8)

   Other commentators claim that there is evidence that "increasing numbers of children migrate from their natal homes as opportunities for work expand in nearby towns or distant cities." (9) For example, in early American society, families moved to areas where child labor was in demand, even if this tended to reduce wages earned by the adult wage earner. (10) It is in this way that some perceive the export sector to be the most direct link between child labor and globalization. (11) This is a possible connection, and it is one of the critiques of the North American Free Trade Agreement. (12) Furthermore, some argue that opening up the export sector increases the opportunities for unskilled labor which could in turn draw children into the workforce. (13)

   However, this argument glosses over the fact that the child who relocates in order to find work in the export sector may have previously worked at a less desirable job. Export jobs are not the only source of employment for child laborers--only the most visible. (14) In reality only a small percentage of child laborers work in the export sector. (15) Given this, even a large increase in the size of the export sector will have only limited effects on the number of child laborers. (16)

   Moreover, globalization and foreign trade tend to increase incomes. (17) To the extent that trade increases family incomes it may lessen families' reliance on child labor and may move children from the workplace into the classroom.

   1. Recent Trends

      Linda Golodner, President of the National Consumers League, asserts that "[t]he problem of child labor has grown along with the expansion of the global marketplace." (18) An article by Timothy A. Glut seems to provide evidence for this assertion. He claims that the number of child laborers has increased by 112 million in only eight years. (19) He states:

      In late 1994, the International Labo[u]r Organization (ILO) estimated that there were 200 million child laborers in the world's work force.... These statistics contrast sharply with earlier studies. In 1986, the ILO estimated that there were only eighty-eight million child workers. This dangerous increase in the amount of child labor illustrates the ineffectiveness of current measures to curtail child labor. (20) Glut, however, neglects to cite any actual ILO studies. Instead the author cites newspaper articles in the Detroit Free Press, L.A. Times, and the Washington Post. (21) His inattention to the actual numbers hides the great improvements that have been made and creates the impression that something drastic needs to be done.

      Data from the International Labour Office, compiled in Table 1, tells a much different story. (22) In 1960, twenty five percent of world's children worked. (23) That same year, 39 percent of children in Sub-Saharan Africa worked, as did 38 percent of children in East Asia and the Pacific. (24) By 2000, the percentages of children working in the world and Asia had dropped to 11 percent and 8 percent, respectively, while the percentage of children working in Sub-Saharan Africa had dropped to 29 percent. (25) None of these areas has seen an increase in the prevalence of child labor. (26)

      Table 2 looks at the prevalence (expressed in percentage terms) of child labor and the total numbers of child laborers in: the world; more developed regions; less developed regions; and the ten countries that in 2000 had the highest prevalence of child labor. It illustrates how child labor has declined overall since 1960. Even in countries that have increased numbers of child laborers the ratio of child workers to non-workers has fallen, in some places dramatically.

      Furthermore, as illustrated in Table 3, the countries that had the biggest expansion in their export sectors also had the biggest reductions in the prevalence of child labor. (29)

      Some commentators rightly suggest that child labor is difficult to define, find, and measure. (30) Nevertheless, these commentators are content in claiming that child labor is a serious and increasing problem. (31) The ILO itself cautions that it is difficult to make comparisons over different years. (32) While one should be cautious in using this data in empirical models, it would be wrong to exempt the claims of anti-globalization writers from empirical scrutiny simply because the data is difficult to collect.

   2. Previous Empirical Studies

      Trade liberalization has had a positive effect on the prevalence of child labor in Vietnam. One examination of the country indicated that trade liberalization in the rice market moved one million children out of child labor by increasing family incomes. (33) The declines were greatest for secondary school-aged girls, who were consequently more likely to attend school. (34)

      As for a cross-section of countries, a recent study found no evidence that greater openness to trade led to higher levels of child labor. (35) The authors concluded that while greater openness is correlated with a lower prevalence of child labor, this effect was statistically insignificant once the study was controlled for income differences across countries. (36) They also concluded that there was no evidence that increased trade leads to product demand changes which in turn leads to increases in child labor. (37) They found no evidence that child labor is related to the heterogeneity of skill endowments, capital scarcity, or the signing of anti-child labor agreements. (38) Additionally, they concluded that child labor is not driven by increases in exports of products made by unskilled labor. (39)

      Other authors agree with this evaluation. One critique concludes that high levels of child labor might be attributable to an absence of globalization, rather than to too much of it. (40) The article uses the Sachs-Warner index of openness, along with a number of control variables. (41)

      A cross-sectional study of countries by Robert Shelburne came to similar conclusions. (42) Shelburne's article used imports and exports as a percent of GNP as a measure of openness, along with a number of control variables. (43) He found that countries that are small, poor, and less open to international trade have a greater prevalence of child labor. (44)

   3. New Regressions

      This Article builds upon the work of Shelburne. His model of child labor is represented by the following equation:

      CHILAB = α[(PCI).sup.β.sub.1] [(OPEN).sup.β.sub.2] [(GNP).sup.β.sub.3] ζ

      CHILAB is the percentage of children not in the workforce; PCI is per capita income; OPEN is imports and exports as a percentage of GNP; and GNP is gross national product. (45) An exponential function was utilized for this Article because that was the functional form chosen by Shelburne. (46)

      Some believe poverty increases child labor. (47) If true, child labor should decrease as per capita income (PCI) increases. (48) Shelburne uses OPEN to test the influence of openness on the amount of child labor. (49) Shelburne hypothesizes that in a closed economy the introduction of child labor will, on net, benefit the non-child-labor factors of production (although with varying distributional effects). (50) In an open economy the benefits of child labor accrue to the children (or their parents), which suggests that open economies will tend to have less child labor. (51) Shelburne uses GNP as a measure of economic size. (52) Shelburne argues that for large, open economies the introduction of child labor changes the terms of trade, making the non-child-labor factors...