Yesterday’s post on child labor generated some great comments, and I’d like to respond briefly to a few of them here.
Jambaramba asked whether low wages for children are a result of their poor bargaining position. I responded that you can’t raise wages nationwide through bargaining. (You might raise them in one sector, but only at the cost of lowering them in other sectors, and overall you’ll make people poorer, not richer.) The only way to raise wages is to make people more productive. This means providing them with more and better capital and giving them opportunities to trade. Manfred followed up with a super comment elaborating on this point. I promise to blog about the supporting theory and evidence sometime soon.
Harold asked about the motivation for various laws that were passed in 19th century Britain to limit child labor. There’s a fascinating story behind these laws; apparently they were generally opposed by large families but supported by smaller families who preferred not to compete with their neighbors’ children in the labor market. As families shrank, political power shifted and the (now more numerous) smaller families had their way. (Families shrank at least partly because the return to education rose, creating an incentive to limit your family size so you could afford to send the kids to school.)
Harold also raised this question:
Say the factory owner spends much of his wealth on imported goods and pays the children a pittance. If he is forced to pay the children more, or to employ adults instead, he will have less to spend on imported goods. The workers spend their money locally, so more money goes artound the local economy, making thenm all better off. I am sure I have missed something here, but what is it?
Answer: First, if he pays the children more, he will employ fewer children; it’s not at all clear that the total income of all children—or of the working class generally—goes up. Second, if the workers buy local goods, they’re going to drive up the demand for local goods and hence the demand for local labor, which is good for other workers. But if the employer buys imported goods, he has to sell local goods in order to afford them, which also drives up the demand for local goods and hence the demand for local labor. So there’s no net gain to the locals here.
In another comment, Harold (following up on a thoughtful comment from Bennett Haselton) suggests that by boycotting factories that employ child labor, we can force them to employ adults, who earn more, are made richer, and therefore choose to educate their children. He ends with “Most parents with funds do choose to educate their children (I think).”
To the last point first: Yes, the evidence is strong that people pull their children out of the labor force as soon as they can afford to; across the Third World, we see child labor falling wherever incomes rise. T”hose patterns seem to be closely mimicking the patterns we saw in the West 150 years ago. But your plan for enriching the parents through boycotts won’t work, which brings us back to the earlier point that you can’t raise wages without raising productivity. Which brings me back to my promise to blog about that soon.
Philip posted a strongly worded comment with some valuable and important facts. I am grateful for the input regarding legistlative history, the SACCS program (which I will learn more about) and Tom Harkin’s voting record (some of which was new to me, and which does paint a more honorable picture than I did). Obviously I disagree with the conclusion that I would “condemn these children to a life of poverty-ridden labor”.
There were also several good comments suggesting that the anti-sweatshop crowd might be more motivated by ignorance (or, according to Philip, by knowledge), and less by bigotry, than I gave them credit for. Perhaps that’s so.