Friday, January 28, 2011

Why Children Don't Work in the US

I was at a rather ridiculous Anti-WalMart protest last week in Washington DC, where a handful of folks were actually at a developer's private residence shouting and disrupting his family and his neighbors at home. It was spectacularly rude, and wildly inconsiderate... Of course. But it was also filled with people who were quite confused on the history of labor & unions in the United States, and as a result, grossly exaggerate union accomplishments..

So I just wanted to take a second and drop a history-knowledge bomb on y'all about one thing in particular: Child labor.

Contrary to popular belief, labor unions & legislation did not bring an end to child labor in the United States. Prosperity did.

I know, I know... That's not what your high school history teacher taught you. I get it... I'm, yet again, going against the orthodoxy here... But the idea that labor unions ended child labor by getting laws written to force people to stop employing children lacks a good deal of basic logic, and betrays an unsurprisingly heinous lack of understanding of economics.

Why so, you ask? Well... Let me explain.

First of all, let's drop the notion that children work because some rich businessman chained them up to a machine & forced them to.

Aside from cases of actual slavery (which most certainly do exist, and are still a big problem today - but which are not part of our current discussion), this is not the case. The fact is, child labor is still a big issue around the world, and it's truly heartbreaking... But in order to understand how to end child labor, it's pretty crucial to understand WHY children work in the first place, don't you think?

Understanding the true cause of child labor around the world is the first step to sifting through the idiotic mythology that leads people to believe that unions or labor laws ended the practice.

I know how great a villain those Robber Barons are. But, as slick and pre-packaged a narrative as that might be, it's just not the monocled fat cat at fault here. The cause of child labor is run-of-the-mill, boring, unsexy, mundane... grinding... poverty.

Not that this shouldn't be an obvious point, but studies certainly confirm. In fact, the United Nations issues a journal called "Africa Recovery" and from Vol.15 #3 of that journal, issued in October of 2001, I bring you this excerpt from its page 14 article, Child Labour Rooted in Africa's Poverty:
"Child trafficking is only one of the more pernicious aspects of a much broader problem. Africa has the highest incidence of child labour in the world. According to the ILO, 41 per cent of all African children between the ages of 5 and 14 are involved in some form of economic activity, compared with 21 per cent in Asia and 17 per cent in Latin America. Among girls, the participation rate also is the highest: 37 per cent in Africa, 20 per cent in Asia and 11 per cent in Latin America.

It is no coincidence that Africa also is the poorest region, with the weakest school systems. And among African children, those from poorer families are far more likely to seek work. A 1999 Child Labour Survey in Zimbabwe, conducted by the ILO, found that about 88 per cent of economically active children aged 5-17 came from households with incomes below Z$2,000 (US$36) per month. As family incomes rose above Z$3,000, the participation rate dropped to less than 1 per cent. Parents and guardians of working children, when asked why they let their children work, most often responded "to supplement household income" or "to help household in enterprise.""
There is no doubt what-so-ever that there is still slavery and human trafficking, and that those crimes definitely do wind up forcing children to work when it's certainly possible that if they had not been kidnapped or sold into slavery, they would not have had such miserable lives. But that is a crime, and has been for a long time. Coercion is, I hope anyone who's ever read this blog realizes, not part of the free market - which is based on the interactions of free people. As such, I'm not going to talk much about trafficking in this essay... It is a crime, it is wrong, it's intolerable. End of story.

However, as the excerpt notes, child labor isn't actually mostly about trafficking. Mostly, it's about families being unable to support themselves without the full participation of every single healthy family member contributing to the group economically.

And you thought I made that story up!
Now, this information really shouldn't come as a shock to anyone, and if you've traveled at all to poorer parts of the world, you might even have seen this. During my own limited travel to South America, I certainly witnessed children working on the streets. A trio of 8-10 year old boys actually made my trip to Costa Rica a little more interesting by acting briefly as tour guides, sloth-finders, and coconut-beverage procurers.

Now, I'll grant you that these kids weren't in a sweatshop making shoes, but Costa Rica is a little higher up on the development curve than say... Nigeria... and, these young guys were still working instead of playing soccer or going swimming like I did when I was 10. There's no question that these boys had to work.

And instead of getting weepy about this, I just paid the kids for their services (and bought them fruit drinks as well) and wished them all the best when I had to go back to my own job... I also took note of why they had to work, and I can assure you, it wasn't because I came in and exploited them and forced them to do so. These boys were entrepreneurs, plain & simple. Instead of the lemonade stand, they were in the tourism business, and they did a fine job - and I was happy to reward them as best I could...

But they were in that business because even at 10 years old, they had to earn a living. They were poor... Not, maybe, poor by African or Indian standards - but by American or European standards... Yep. Poor.

And this is why most child labor happens around the world, and it's certainly why it happened throughout the early United States!

Parents aren't making their kids work because they're evil or cruel, and employers aren't accepting a child labor force in certain parts of the world because they're slave-drivers. Kids work because their families will not be able to eat if they don't contribute, and employers accept children for some jobs because they are obviously inexpensive and they too are quite poor. Exploitation is a word thrown around a lot in these situations, but it's usually a seriously over-simplified term and only has value as hyperbole.

Without children working, in some areas of the world, under current conditions, many families would not be able to survive.

So it should be that we have to remember our Ludwig von Mises:
"Action is an attempt to substitute a more satisfactory state of affairs for a less satisfactory one. We call such a willfully induced alteration an exchange."
"Most actions do not aim at anybodys defeat or loss. They aim at an improvement in conditions."
People's material prosperity is the determining factor regarding the conditions under which they will be willing to work.

If your choice is starving to death or picking through trash for food, most people will pick through trash. If your choice is picking through trash or working 20 hours a day in a factory at $0.30 an hour, most people will go for the factory job. If the choice is $0.30 an hour in a factory for 20 hours a day, or 16 hours a day for $0.40 an hour... You get the idea...

Unfortunately, in much of the world, the opportunities available to people are much more limited and comparatively crappy than they are in America or in other more developed nations.

But that was not always the case! The other thing people need to consider here is that the level of poverty people experience today in the 3rd world is exactly the level of poverty experienced by everyone in the world throughout its history. Poverty is the historical norm. Prosperity is what's bizarre...

Two excellent quotes from Thomas Sowell (who grew up remarkably poor) come to mind. First:
"When Western countries in the past were as poor as Third World countries are today, these Western countries nevertheless had one big advantage: There was no large and influential class of the intelligentsia to impede their progress with unsubstantiated theories and counterproductive propaganda."
...and, also...
"It would be devastating to the egos of the intelligentsia to realize, much less admit, that businesses have done more to reduce poverty than all the intellectuals put together. Ultimately it is only wealth that can reduce poverty and most of the intelligentsia have no interest whatever in finding out what actions and policies increase the national wealth. They certainly don't feel any 'obligation' to learn economics..."
Sowell always takes jabs at academia, but rightly so, I think! For so long, academia, and "the intelligentsia" has peddled the idea that child labor is just something that happens because evil people want it to happen, but they never bother to learn the true causes - and as a result, can't figure out the real solutions.

Going back to the beginning though, why can't labor laws fix the problem? Simple: Because laws cannot override economic reality.

If a nation is so poor that the only way to feed your family is to have every member work, including your youngest child, then your children will have to work - or you starve. No amount of law-writing will feed your children. Unfortunately, far too much law-writing can impede your ability to feed your family. And that's really what Sowell was getting at.

Most of 18th & 19th Century America did not have laws against child labor, and in fact, the first laws preventing child labor that cropped up in the 1830-1840s in some states were pretty limited in scope and some were even repealed on Constitutional grounds.

But more importantly, I want to draw your attention to Wake Forest University Professor of Economics, Robert Whaples, and his article, "Child Labor in the United States" - in which he contends:
"Most economic historians conclude that this legislation was not the primary reason for the reduction and virtual elimination of child labor between 1880 and 1940. Instead they point out that industrialization and economic growth brought rising incomes, which allowed parents the luxury of keeping their children out of the work force. In addition, child labor rates have been linked to the expansion of schooling, high rates of return from education, and a decrease in the demand for child labor due to technological changes which increased the skills required in some jobs and allowed machines to take jobs previously filled by children. Moehling (1999) finds that the employment rate of 13-year olds around the beginning of the twentieth century did decline in states that enacted age minimums of 14, but so did the rates for 13-year olds not covered by the restrictions. Overall she finds that state laws are linked to only a small fraction – if any – of the decline in child labor. It may be that states experiencing declines were therefore more likely to pass legislation, which was largely symbolic."
And honestly - this is so often the case with legislation, and few people actually bother to pay attention to it.

The culture and economic environment changes first, and then the laws change. And OF COURSE it works that way. Elected officials aren't instigators of societal change, and they really can't be, simply because they are representatives of members of society into the government. In order to get elected to public office on a particular platform of ideas, people already need to sponsor said ideas... And if they don't, and you get elected anyway, then democracy has pretty much gone horribly awry.

But, seriously... You can see this pattern repeatedly. For example, cigarette smoking was on the decline already, and most restaurants & bars had either banned smoking or provided designated smoking areas long before any legislation required them to do so.

The legislation reflects the changes after they've already happened. It's incredibly rare to find a situation where laws actually created meaningful change, rather than where they solidified or forced people to do something most were already choosing to do voluntarily.

Child labor disappeared in the United States not because of labor unions or anyone making laws that made employing children illegal, but because child labor was no longer economically necessary. The massive amount of prosperity generated by minimally "fettered" markets and robust productivity gave families the wealth to be able to afford a reasonable standard of living on the labor of just one or two members where before they needed the labor of everyone.

Academics today, who so often fail to understand economics, misunderstand the reasons child labor declined in the US, and so they push misguided remedies for child labor around the world. By restricting peoples' abilities to work, and to produce, the poorest countries on the planet are often condemning their citizens to remaining poor instead of going through the ugly - but often necessary - phases of economic development that enable true, lasting prosperity.

And frankly, all the laws do is compel people into black-market conditions - and that drives up people's cost of living and working even more, and winds up being remarkably counterproductive... Making people poorer.

As I noted before, if everyone in a family must work in order for that family to be able to afford to maintain a rudimentary standard of living, then everyone will work... Regardless of what words are written on which pages of which law books.

Child labor is not good. And it can be eradicated worldwide... But the way to eradicate child labor is through productivity, capital development, mechanization/modernization, and the creation of wealth. Markets can do this... If we let them.

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