Exploitation of child labor in Asia within multinational organizations

Exploitation of child labor in Asia within multinational organizations

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Introduction

According to Arnold and Hartman 2005, controversies on child global labor practices are raising various concerns. Various scholars and critics seek regulations to control child labor in various multinational organizations (Arnold and Hartman 2005). Due to diversification and internationalization of organizations, various companies tend to keep their production costs low. According to Neumayer and Soysa 2005, the internationalization skeptics argue that enhanced market access and trade openness encourage under-developed countries to reduce their labor costs and one method is through child labor. This is a reason to argue that globalization has various negative repercussions on children in Asian countries. This paper assesses the exploitation of child labor in Asia within multinational organizations. This paper, therefore, examines various effects of child labor of multinational organizations on production wages and working conditions in Asia. This paper is important in following various concerns on whether or not multinational companies are exploitative, pay low wages, subject employees to forceful labor, have unsafe working environment, and unhealthy conditions (Brown et al., 2002).

Arat 2002 asserts that child labor has been disadvantageous on various counts, ranging from health, welfare and child’s physical integrity as well as wages. According to ILO 2002’s statistics (globally), about 211 million children between five to fourteen years have participated in given some economic activities. However, only 25 million children among these are considered of right age. According to statements by Basu 1999, Grote et al, 1998 and Srinivasan 1998, the effects of globalization raised various public and academic debates, and have also evoked passions since it has brought together individuals concerned about child labor exploitation.

Increased trade openness in various Asian countries, characterized by unskilled labor, does not only have effects on child labor but also effects on income.

Rodriguez and Robrik 2000 argue that even if liberalization in developing countries does not contribute positively to a country’s economic growth, it raises relative return of forced labor. The availability of jobs for children can reduce schooling, assuming that school and children’s leisure respond positively to price change. In fact, Basu and Van 1998 state that there exists a possibility of multiple equilibria in labor market in developing countries. Suppose the income the parents feel that the income effect is strong, they will see no need to take their children to school and when the income effect is weak, the substitute school to work. To argue, internalization might create two equilibria, between high and low-skilled workforce. Low-skilled workforce will occur when many children are sent to work, while high-skilled workforce is when many students are sent to school. Becker 1997 asserts that through globalization, developing countries for example Asia countries can have an inducement to devote in education. The trade openness in Asian countries could have therefore led to decreased child labor incident.

The other reason for increased incidence of child labor in Asia, as Ranjan 2001 and Jafarey and Lahiri 2002 argue, is through enhanced credit access and low interest rates. The reduced interest and easy credit access makes education loss value and therefore increased child labor as many employees are needed. Various scholars like Arnold and Hartmann 2005 have however argued against the assertions disadvantages of possible and increased child labor. According to the two scholars, child labor exploitation allows undeveloped nations to enlarge their export activities and enhance their economies. Arnold and Hartmann 2005 assert that through economic growth, more jobs are created resulting to tightening of labor market and therefore prompting organizations and business to improve workforce’s working conditions so as to attract more employees. This is contrary to various scholars’ arguments that increased trade leads to increase labor demand and more companies, in seek of cheap labor, employ children. In their arguments, Arnold and Hartmann 2005 claim that internalization increases company’s success and assist in improving the working environments. The trade openness further provides undeveloped countries with easy access to cheap products and services, and as a result, creating opportunities of exploiting cost advantage in external markets. Jim 2002 is of similar argument as he empathizes that it is through globalization that a company is able to better workforce.

Determinants of child labor in Asia

It is shocking in various Asian countries that parents send their children to work instead of school (Neumayer and Soysa, 2005). However, Grootaert and Kanbur 1995 argue that it is improvised parents that engage in this act for the family’s sustenance. Poverty has been responsible for creating various child labors in Asian countries (Ahmed 1999).

Though various parents do not like having their children work full-time, extreme poverty has pushed various parents to consider having full time employment for their children. The extra income brought by the children is important for family’s sustenance. In Asia and as witnessed globally, according to Baland and Robinson 2000, due to limited access to credit for poor families, they are not able to get capital for their family maintenance and so send their kids to work. In the start, it acts as temporary work but eventually, as family demand increase, children ought o have it as full employment. In given cases, Neumayer and Soysa 2005 explain that some children loss interest in school, or even lose their school capabilities to go on with schooling. As argued by Neumayer and Soysa 2005 and other scholars, poverty is the main factor resulting to child labor.

Though secondary to poverty, the costs of schooling and conditions and the availability of other options in life have also increased incidences of child labor. In specific, the family’s opinion to send a child to school or to work highly depends on the available options. Contrary to this, Basu and Tzannatos 2003 state that in various developing countries, there are higher chances of educated parents having their children acquire higher education. This opens a possibility of only selected few attain given educational level and standard. As argued above, any factors that deter education increased chances of child labor. The open trade and internalization in the undeveloped countries can lead or decrease chances of child labor depending on the parental perfection. However, the increased job openings an opportunity in the market also leads to increased child labor as more improvised parents tend to send their children work rather than school.

The other factor that enhances child labor is availability of many money-earning opportunities in the rural areas. Ahmed and ILO 2002a argue that in rural areas, the existence of agricultural activities acts as incentives for children to engage in child labor. In Bangladesh it is approximated that more than 80% of economically active workforce (majorly children) are working in agricultural sector similar to India in other Southern Asian countries. In rural areas, educational standards tend to be poor and poor chances of getting formal employment in rural areas also encourage children to take a role in life. Additionally, parents and family members in the rural areas, majority, have low educational levels and thus little encouragement to their children (Edmonds and Pavcnik 2002). Lopez-Calva 2001 also notes that in rural areas, cultural and social norms are more traditional and so high chances o acceptability and child labor.

The other reason for increased child labor is due to their cheapness. Various organizations in increasing their profitability by reducing production costs tend to employ children to reduce the labor cost. Children are also preferred because of their less demand for other services and rights like getting pension and medical insurance. Children are also believed to be tolerant to bad working condition (Bachman 2000).

It is evident through the analysis that through increased trade openness, the high workforce demand has led to increased child labor. Additionally, due to internalization, the stiff competition has led to decreased prices and thus the need for companies to lower their production costs. One method employed in lowering production cost is decreasing labor cost and some organizations have employed instead. One of the greatest disadvantages of child labor is decreased product and service quality. Majority of children are inexperienced and so compromise the product qualities. Children are less productive compared to experienced workers.

Conclusion

The process of internationalization cannot be directly assumed to contribute to increased child labor. Globalization somehow enforces poverty. Child labor is a symptom of sincere poverty. Finally, it can be said that there exists a connection between globalization and child labor. Internalization is a process enforced by various companies in their attempts to maximize their profit and customer base.

Although child labor force participation is highest in Africa, Asia contains the largest number of child workers. According to ILO, more than 300 million under aged workforces are in between ages of five to fourteen years old children contribute to 21.6 million or child workers. Regardless of the critics of internalizations, there are various advantages that globalization has offered to the job market. It is through globalization that labor market has been improved. Various companies have been formed to improve their conditions and wages to compete the international companies. Through various redesigns of company’s operational strategies, various jobs have also been created and thus its importance.

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