Free trade’s dark side: Child labor

[OhioChick]

Published: March 12th, 2007 01:00 AM

CHIMALTENANGO, Guatemala – Work starts early for the people of the Guatemalan countryside, sometimes as early as 5 or 6.
Not the time, the age.

Guatemalan children shine shoes and make bricks. They cut cane and mop floors. At some factories exporting to the United States, they sew and sort and chop, often in conditions so onerous they violate even Guatemala’s very loose labor laws.

“They like us young people because we don’t say anything when they yell at us,” said Alma de los Angeles Zambrano, 15, who quit after 18 months at a food processing plant to work part time for an organization trying to improve conditions for young workers.

President Bush is likely to miss this side of Guatemala’s labor market when he comes to this rural area today to visit a thriving agricultural cooperative that sells products to Wal-Mart’s stores in Central America. The president will meet with Mariano Canu, the leader of a U.S.-backed co-op that hopes to take advantage of the Central American Free Trade Agreement and hear him tell how children are in school preparing for Guatemala’s new economy.

Opening up trade, Bush argues, will ultimately raise wages and improve working conditions in Central America. “My message to those trabajadores y campesinos,” Bush said last week, using the Spanish words for workers and peasants, “is you have a friend in the United States of America. We care about your plight.”

http://www.thenewstribune.com/news/nationworld/story/6411429p-5716182c.html

[fasttense]

1. It is the same in India

Think free trade has improved the average life of a citizen in India? Think again.

"Among non-agricultural occupations, ‘masonry’ was observed to be the highest paid occupation for men followed by ‘carpentry’ and ‘blacksmithy’ occupations."

"Sweeping’ was the highest paid occupation for women as their all-India average daily wages in that occupation varied from Rs.48.52 in December, 2003 & March, 2004 to Rs.51.37 in August, 2003."

"During the year 2003-04, the all-India average daily wages of children engaged as ‘unskilled labourers’ ranged between Rs.28.97 in April, 2004 to Rs.29.72 in January, 2004."

http://labourbureau.nic.in/WRI-2003-04%20Exe%20Summary.htm

Free trade has always promoted child labor but they just don't talk about it.

[lostinacause]

15. Please explain how this says that free trade has promoted child labor.

[qwlauren35]

17. I'm guessing here.

If we restricted trade to those countries who abide by labor laws, then countries who tolerate child labor would be out of the running.

But instead, we encourage trade with countries with the cheapest products and labor. And in order to be cheapest, there will be people who get squashed. In Guatemala, it's children. In some countries, it's the women...

Keep in mind that even here in the US, there are illegal labor practices. I'd like to believe that we put a stop to them whenever we find them, but I'm not 100% sure.

http://www.hrcberkeley.org/download/hiddenslaves_report.pdf

[lostinacause]

18. The question that I was asking is was there a noticable shift , in India in particular, of the

number of child laborers. The statistics say is that child labor exists. The poster is claiming that trade encourages child labor.

[fasttense]

19. Free trade promotes the removal of all regulations on capitalism.

Corporations go into a country and use this very cheap child labor. This allows the practice to expand. Child labor is still being used in India today. Free trade did not stop this exploitation.

[PDJane]

2. Free Trade

does nothing to raise wages.

This is a myth and always has been. If you look at wages in the US, they've dropped over the span of free trade agreements, and will continue to do so unless and until labour and the middle class get some time to fight back......and until we all grow less fond of "toys".

[lostinacause]

3. Free trade raises the wages in countries whose labour cost is cheap relative to their productivity.

Countries like China and India have clearly seen an increase in wages. This is evident by the growing demand for cars in China and the growing "Americanization" of youth in India. Both of these trends are being reported by reputable news sources.

Also America has had a number of policies put into place recently that have reduced the standard of living of the population. It's hard to say what effect trade has on the overall standard of living.

[fasttense]

5. Free trade did not raise the average wages of people in India

It raised the wages for a few in a few occupations but not the average wage. If it had, sweeping would not be the best paying occupation for women in India and child labor would not still be in the labor report.

I have looked for real numbers of average wages in India and all you get are occupation sector numbers on wages. Lou Dobbs had a report that clearly showed a drop in wages. Your reliable sources - not so much.

[lostinacause]

9. Actually, given the way average wages are defined clearly average wages

are increasing. Certain industries may not have seen an increase in the wage rate and some may be declining. The statistics given on the site you quote are composed of raw data and are very difficult to draw inference without compiling the data. I have neither the time nor patience to do that. But I will see if I can find a source showing that the average wage has increased. I will also try to find details on the distributional effects of wages.

[fasttense]

21. In your first statement you don't account for inflation

Inflation can and does show an increase in wages while not actually representing an increase in purchasing power. There have been declines in wages in certain sector of the economy in India. I have yet to see a study comparing real dollars then and now for average national wages in India (except on Lou Dobbs but I don't have the time to hunt through his archives).

Yes, I agree the stats in the site are hard to analyze. But it clearly indicates that "sweeping" is still the number one job for women in non-agriculture jobs in India. If this flat earth, free trade economy theory worked, would sweeping still be the number one occupation?

It also clearly indicates that child labor is common. If outsourcing is such a boom to India, would children still be required to work?

Skilled labor has in all probability seen an increase in wages in India. But people who could afford to reduce the amount of work they do and use their time to get educated, would have in all probability done well in that economy before corporations moved in.

[lostinacause]

10. See...

Why Did Wage Inequality Increase? Evidence from Urban India 1983-99 Kijima, Yoko; Journal of Development Economics, October 2006, v. 81, iss. 1, pp. 97-117

While the data is old it represents the early gains from a more liberalized economy. It states that most of the increases of inequality were associated with improved wages for skilled workers. The journal, as I understand, is well respected.

[lostinacause]

12. Here is a link to the abstract of the paper

http://www.sciencedirect.com/science/article/B6VBV-4HC0R70-1/2/df1c750cb198da7529c9256ce061441d

[lostinacause]

13. Here is a link to the abstract of the paper

http://www.sciencedirect.com/science/article/B6VBV-4HC0R70-1/2/df1c750cb198da7529c9256ce061441d

[lostinacause]

11. Montek S. Ahluwalia paints a similar picture looking at more recent

trends. This one unfortunately does not have an abstract.

Montek S. Ahluwalia (2006) India's Experience with Globalisation
The Australian Economic Review 39 (1), 1–13.

[zalinda]

4. I don't like the fact that American companies

are using poor nations as little more than slaves. But, this type of child labor is what happens in every country that is starting to grow. It happened here until we enacted child labor laws, except for farming. Every small farmer's kids have started doing chores as soon as they are able to. And little mom and pop businesses have their children doing chores at the family business. I don't know how many times I've seen owners kids doing their homework at a restaurant table during a slow period. There is nothing wrong with kids knowing how to do a job. What is wrong is that American companies are taking advantage of it.

zalinda

[fasttense]

6. So you are saying child labor is quite alright by you?

Just don't use child labor in corporations but all other child labor is fine? Working for Mom, Dad or your Uncle is a whole lot different then working for an employer who is only interested in their profits.

[zalinda]

8. Don't judge our way of life with life in other countries

Sometimes children have to work to help support the family, that is the way it is. Children in Mexico scour garbage dumps to find things to sell, to help their family survive. While it would be wonderful if no child had to work, that is not the way of the world, especially third world countries. To deny them work because people in this country think that they shouldn't, is to force them to accept our way of life, without the benefits. They do not have ANY source of support, no social services, no rich church or rich relatives. They have to live on what the family working together can provide, to survive.

So you think that you know what it is like to survive in a mud hut with a dirty floor, no running water, no bathroom, hopefully eating one meal a day of beans and rice? How American of you to know how other countries should behave. You may have the luxury of letting your children go to school, but other parents in other countries do not. Some to survive, even have to SELL their children, so that the younger children in the family can eat.

Taking that tone with me, does not change the fact that children in third world countries have to work, and they are glad to have the job. This is the reason that American companies off shore, they know that there are people who will do the job for any price, just so they can survive. We don't realize how bad it can be in other countries, because as bad as it gets here, it can be 10 times worse in another country. We are really spoiled in this country, and this is coming from someone who's income qualifies her as one of the working poor.

zalinda

[fasttense]

20. Child labor is the result of numerous social problems in that country.

If given a choice children would prefer to go to school. Without an education, they don't stand a chance of ever improving their situation. It is a self perpetuating cycle especially when corporation use child labor for their own cheap unskilled labor pool. Then child labor is frequently expanded.

Yes, children in other countries have to work to survive. But it doesn't have to be that way. The country could set up social systems to protect children but they don't. It is not an ingrained result of their social customs or social identity. It is a result of mal-distribution of wealth, lack of regulations on capitalism and serious social ills.

Unchecked capitalism just aggravates these problems.

I'm not sure what tone you object to. Because I asked if child labor was ok by you? I guess you don't like to be questioned.

[reprobate]

7. Don't confuse "Free Trade" with "Fair Trade".

Free Trade gives the investor the catbird's seat. He sets the lowest wages and worst working conditions that he can. His attitude is "Screw the environment, only profit counts." The workers have no say in anything to do with their work. It is the 21st century equivalent of Lassaiz Faire trade.

Fair Trade on the other hand sets wages to their equivalents in each nation's currency. It guarantees working conditions and environmental conditions. It is the very antithesis of capitalism, but it will be a necessary condition of globalism if it is to prosper.

[lostinacause]

14. Your idea of "Fair Trade" does not stand up in practice. First you have to consider that

no company would be able to pay workers in developing countries equivalently. Based on the productivity differential they would end up loosing large sums of money. Presumably you would have to account for the productivity differential. In doing so this would become a logistical nightmare. Things like the amount of capital of firm chooses to employ greatly affects worker productivity. This would create incentives to under invest in capital in developing nations and over invest in developed nations. Even if though some miraculous stroke of bureaucratic genius these problems were able to be solved, different transportation costs would mean that this type of system would adversely affect those who are not in close proximity to markets.

The more problematic part of your posts is that countries, even when acting in their citizen’s best interest, have different optimal levels of pollution. Countries with higher rates of poverty and shorter life expectancies should be less concerned with carcinogens then people in North America and Europe who generally already enjoy a high standard of living and can afford to implement strict environmental controls. The same follows for labor laws as was so appropriately put by Zalinda in post #8.

With that being said developed nations need to look at ways to provide the citizens of developing countries with the opportunity to pursue the appropriate degree of regulation. We need to look at ways to provide education and skill development. We need to implement trade agreements which give these countries the ability to have some flexibility in the laws that they implement.

[lostinacause]

16. I forgot to say that there is a general need to encourage institutions

that create equality and opportunity for the citizens. We should also be encouraging those.