Wednesday, 8 May 2013

Child Labour: Why?

Over the last year or so there have been a few instances of companies in the UK selling products which have been found to be manufactured using child labour, in such countries as India for example.  The predictable response from the UK has been collective horror at the conditions such children work in and their age.  This blog is not about that, nor is it in any way supportive of such a practice.  What this blog is about is one possible reason that child labour is used in some countries and not in others.

The first thing to define is the concept of societal norms.  In the UK in recent years Prime Ministers have apologised for the role of the UK in the slave trade, and for the treatment of Alan Turing - the celebrated wartime codebreaker - when his homosexuality came to the attention of the police.  Obviously in a modern society both behaviours are abhorrent to us, and rightly so.  However, they were normal for the society of the time, and thus the apologies were for acts which the majority of society accepted at the time.  So, we have the concept whereby one society, separated by time or distance, will deem a behaviour acceptable, whilst another will not.

My grandfather started work in a Welsh coal-mine in 1925.  He was aged 12.  This is the genesis for my theory about the reasons for child labour.

In any country there is a minimum standard of living (SoL), and a cost associated with that standard - Cost of Living (CoL).  Each household income has to match the CoL in order to achieve the minimum SoL for all the household members.  In a household where income falls short of the CoL there are two options:

  • Apply for benefits from the Welfare State.
  • Increase the household income by getting more members into work - assuming those in work cannot get a wage increase.
If however you live in a country which has no Welfare State there is no option.  Assuming also that all adults in the household are in employment, the only course of action to increase the household income is to gain employment for any minors.

This was the case in the South Wales valleys, and many other communities, in the United Kingdom as recently as the early 20th Century.  When the parents were unable to earn enough income for an acceptable SoL the children, such as my grandfather, were pressed into service.  Almost a century later this is the case in countries such as India.

There are two ways in which this situation can improve.

  • National increase in wages, without an accompanying increase in cost of services.
  • Introduction of a Welfare State.
Neither is an easy course.  If a country relies heavily on foreign business and exports and they increase their labour costs, they will have to increase the prices of their products and services; this may have a detrimental effect on business by making them less attractive to purchasers and investors.  This will have the counter-productive effect of losing jobs in the country concerned as employers lose foreign business.  However, if the majority of their business is internal they may be able to achieve their goal.  The major caveat is of course the increase in services and if they increase at the same rate all that happens is the status quo is maintained.

In the latter course the Welfare State must be funded somehow, and that would naturally be via taxation.  However, if the lower earners are taxed there may a situation whereby those who were previously slightly above the CoL threshold are now pushed below it by taxation and now require assistance themselves, and we enter a Catch-22 situation.

Therefore there are pros and cons for both courses of action.  However I hope I have illustrated my belief that while we in the UK sit by and decry child labour in other countries, we are only separated from that reality ourselves by less than a century.