A(Nother) Modest Proposal – Child Labour and the Global Market

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It’s a depressing thought for anyone who travel through this world, when they see the streets and malls crowded with homeless beggars followed by numerous children, bothering every passerby for charity. These beggars unable to work for a living are forced to beg sustenance for their helpless infants who either turn into thieves for lack of work, or leave their dear native country to fight for wars they’d find lucky to return from.

Therefore whoever could find a fair method of making these children useful members of society would deserve a monument. But the intention of this paper is not to discriminate against the homeless, it includes a solution for all children who are born of parents little able to support them.

Photo by ILO Asia and the Pacific, CC.

Photo by ILO Asia and the Pacific, CC.

The population of this planet is around seven billion strong. There remains a number of roughly one billion that can be considered children of poor parents. But unlike Jonathon Swift, who proposed the argument towards eating children, I doubt there is a better use of the younger population aside from productivity.

The question becomes then, what is the best way of motivating children for the public good? As I have recently said above, it is utterly impossible and illegal in most countries to cannibalize the younger population. Cannibalism should not be encouraged within our societies. However we can’t employ children within complex service role; nor can we trust their ability to produce technical blueprints or compete athletically.

Instead, consider the profitability these unproductive children can provide within the global supply chain. Unable to find work in more fulfilling fields, nor able to complete an education due to either their lack of access or lack of resources, the beggar class of children provide endless manual ability.

Many statistics prove that the use of child labour, especially amongst poor children, has provided more than 800 percent financial returns. Why then if the sole purpose of profitability, should businesses worry about the responsibility across their operations? In fact, businesses can provide better opportunities for children by teaching them the necessary skills in building a pair of runners for star athletes or teaching them how to cultivate and pick cocoa beans.

Perhaps the answer to why businesses should care about child labour lies within the reason that, although profits increase we are effectively eradicating the lives of children globally, either through death or the elimination of future prosperity. These trapped children are often invisible within the global supply chain, with many of our actions affecting them gravely. Whereas a system that discourages manufacturers and suppliers from employing children, while also providing stronger options for education, would greatly improve the quality of their future years.

According to a 2005 MIT report, high-quality early education creates future citizens who earn more, pay more taxes, and commit fewer crimes. In fact, the dollar return of investing in quality education can be understood as 1:13. Every $1 invested would result in saving taxpayers $13.

I would even posit that supply chains using child labour are effectively destroying themselves, because they are surrendering opportunities for increasing their profit margins. According to a 2014 Nielsen report, more than 50% of consumers would pay extra for products and services from companies that commit to corporate social responsibility.

Photo by The Advocacy Project, CC.

Photo by The Advocacy Project, CC.

In fact, ethical supply chains can have positive effects throughout the entire organization. A common argument against sensible labour reforms involves anti-competitiveness. In essence, business professionals globally fear loss of revenue because labour becomes expensive, thus they are no longer attractive against cheaper competitors.

However companies, especially consumer-facing companies, should understand that they are able to wield incentives such as price against competitors. For instance, Starbucks is able to wield strong revenue flows due to their ability to wield price against their suppliers. Starbucks is willing to pay more for their coffee beans if it is provided by agricultural producers that are committed to ethical trading (Blowfield, 2004). Ultimately this provides an interesting case where both the supplier and the retailer can profit amicably from ethical practices.

Without much doubt it can be seen that ethical sourcing can have positive effects for both businesses and society. The concerns against removing child labour throughout supply chains does, however, raise honest concern. Blind bans and implementation of control can effectively force manufacturers and suppliers to comply with larger businesses (and their push for ethical practices). However, blind bans can lead to other problems including pushing children out of hard labour and into riskier work.

Organizations must understand that attempting to solve the issue of child labour cannot be tackled as a one-off issue. In fact the problems that contribute to child labour are vast and can represent problems regarding human trafficking or economic necessity. Economic necessity can be defined, in this case, as involving poor families around the world finding a necessity in having their offspring work. At this point it becomes a cloudy question of whether Western enterprises should have any say in the governance of labour standards in vastly different cultures and social systems.

Yet the problem remains that perpetuating a system of child labour, regardless of cultural difference, does not prepare those children to contribute to the intensifying service and knowledge dominated economy. Social mobility is improved with access to education.

Global enterprises thus have a dual-responsibility within their corporate social responsibility programs. The first responsibility involves standardizing global suppliers to comply with ethical practices. One way of doing so is by rewarding global suppliers with better price options. The second responsibility involves providing programs or funding for improved childcare and education to those regions.

The business case involves highly positive marketing global campaigns, which create an increase in willingness by consumers to pay. The business literature is resilient when approaching ethical practices, and what I have proposed may not be the only way of approaching ethical practices. It is, however, one area of hurt that we can try to solve.

Photo by  Greg Westfall, CC.

Photo by Greg Westfall, CC.

 

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About Author

Michael Fournier

Michael Fournier is a Brand Manager at Procurify whom focuses on bringing the most relevant topics regarding supply chain management and eProcurement to light. When Michael isn't writing blog posts or working on campaigns he enjoys a nice cup of coffee. And Michael enjoys his coffee like his shirts, pressed.

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