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RIGHT OR WRONG, PERCEPTIONS THAT GLOBALIZATION LEADS TO EXPLOITATION OF CHILDREN ARE BECOMING AN IMPORTANT PROBLEM FOR INTERNATIONAL BUSINESS.
Child labor is linked to global business directly and, more commonly, indirectly. Critics blame increased trade and financial flows for increased child labor, and those criticisms have undermined the legitimacy of further trade and financial liberalization. Companies-including multinationals such as Nike, Wal-Mart, Ikea and the Brazilian subsidiaries of U.S. and European automobile manufacturers-have responded with a range of initiatives. Unless business responses alleviate the worst forms of child labor, the legitimacy of continued trade and financial liberalization will continue to be undermined by perceptions that liberalization disproportionately hurts children, especially child workers.
Children have worked for as long as families have needed all hands to pitch in. Beyond defining work as a means of survival, however, defining what work is appropriate for children and what (if anything) to do about inappropriate work involves more complex judgments-especially for firms doing business in the global economy.
The International Labor Organization estimates that around the world 250 million children between the ages of five and fourteen work, about 120 million of them fulltime.1 Some of these children work in factories and other workplaces in the formal economy, but the vast majority work in informal enterprises, agriculture and in homes. International firms are part of this economy not only if they hire children, but also if they buy goods or services from children or from companies that make such purchases.
International business has come under increased pressure from social activists, trade unions and others to help find new solutions to end exploitative work for children and to help them get the education and training they need to become productive adults. Companies in the spotlight include respected multi-national corporations as well as many other lesser-known businesses.
Child labor has been a concern of the formal, industrial economy since the beginning of the Industrial Age. By the end of World War II, however, most developed countries had passed laws against child labor, at least in industry. Child labor had declined in developed countries in any case, due to a combination of several factors. These include the increasing sophistication of technology in the workplace (reducing the demand for low-skilled workers), greater...