Consider the Source: Can We Tolerate Child Labor in Our Supply Chains and Closets?

BY CAITLIN RYAN

Stepping into a makeshift convenience store in Hanoi peddling toiletries and cleaning products, I immediately felt uncomfortable. In a shop smaller than a two-car garage with several rows of tall shelving, a dozen teenagers milled around as if waiting for a task. Numerous security cameras captured the room from different angles and an older woman monitored the video feed on multiple screens. Three girls in the toothpaste and cosmetics aisle told me they were employed at the shop; they were fifteen and had come from the Thai Binh province in the north of Vietnam. One girl said she left school at age eleven to start working. They all lived together in an apartment rented to them by the shop’s owner.

But they were not in school.

I had so many more questions. Did they ever go to school? Did the employer treat them well? What career did they aspire to? Before I could ask, my interpreter signaled that it was time to leave; the woman at the monitors had taken notice of our conversation and was glowering our way.

I met these girls on a trip to Vietnam in December 2015. I went to conduct research for Sports Philosophy, a new company based in London that seeks to simultaneously produce sportswear and fight child labor. As the company’s first impact consultant, my goal was to meet child workers and learn from their experiences. After years of working on various anti-modern slavery initiatives, the underlying question for my research deeply perplexed me: if children must work in some parts of the world, is there an ethical way to employ them?

 Child Labor: Global Definition and Scope

According to International Labour Organization (ILO) estimates, around 168 million children around the world are engaged in child labor, more than half the population of the United States.[i] The forms of child labor outlawed by international treaties fall into three categories:

(1) Labor that is performed by a child who is under the minimum age specified for that kind of work by national legislation;

(2) Hazardous work or labor that jeopardizes the physical, mental or moral well-being of a child; and

(3) The unconditional worst forms of child labor, which are internationally defined as slavery, trafficking, debt bondage and other forms of forced labor, forced recruitment of children for use in armed conflict, prostitution and pornography, and illicit activities.[ii]

This three-pronged definition leaves troubling gray areas. Millions of young people legitimately perform work that is appropriate for their age and level of development. Through working, young people can gain skills, grow their families’ income, and contribute to their countries’ economies.

Case Study: Child Labor in Vietnam

The case of Vietnam provides useful insights to better understand the nuances within child labor.

On a policy level, Vietnam ratified The Worst Forms of Child Labor Convention (No. 182) in 2000 and The Minimum Age Convention (No. 138) in 2003.[iii] Under these conventions, students must stay in school until age fifteen and may not perform hazardous jobs before eighteen.[iv] Vietnam’s Labor Code (2012) prohibits employing minors under fifteen. However, the Code also outlines detailed guidance for employment of minors including those as young as thirteen.[v]

Despite Vietnam’s Labor Code, 1.75 million children (ages five to seventeen) are engaged in child labor.[vi] According to a National Child Labor Survey conducted in 2012 by Vietnam’s General Statistical Office in cooperation with the Ministry of Labour, Invalids, and Social Affairs (MOLISA) and ILO, one-sixth of Vietnam’s 18.3 million children perform some form of economic activity.[vii] The vast majority of child workers (86 percent) lives in rural areas, and most work in agriculture on small-scale family farms. In addition to agriculture, home-based subcontracting is on the rise; manufacturers reduce labor costs by employing women and children in local households.[viii] Only a fraction of these children qualify as child laborers under international standards.

While in Vietnam I visited many stores; I did not encounter child workers that fit into the ILO’s categories—children under the minimum age of fifteen or working in hazardous conditions. Yet my market visits revealed several teens working in precarious situations. Teens also work in the many garment factories in southern Vietnam. These young people typically drop out of school at young ages, travel to Hanoi and Ho Chi Minh City from rural provinces, and live in housing owned by their employers. While further investigation could potentially uncover harmful working conditions—excessive hours, night shifts, physical exertion, or exposure to hazardous toxins—children older than fourteen working in the market and garment factories would not be considered child laborers under current laws.

Causes of Child Labor

Through conversations with representatives from the Vietnamese government, the ILO, and non-governmental organizations (NGOs), I sought to understand more about the factors contributing to child labor in Vietnam.

Supply

On the supply side, the availability of children to perform labor is a symptom of larger problems.

Poverty

The lack of adequate income-earning opportunities for adult family members is a root cause of child labor. Household poverty pushes children into the labor market. According to the ILO, “children’s work in many cases contributes a substantial fraction of household income, usually around 20 percent. For these households, the child’s income is necessary to bridge the gap between survival and starvation.” [ix] Further, by limiting access to higher education and skill development, child labor perpetuates household poverty across generations and slows national economic growth.[x] However, child labor also persists in households earning above the national poverty line, indicating poverty is not the only cause. A World Bank study in Ghana found that beyond poverty, reasons for high incidence of child labor included “the country’s agricultural dependency, demographics and social norms, as well as the geographic isolation of Northern children and no returns to rural basic education.”[xi] Further quantitative studies are needed in contexts such as Vietnam to better understand the factors alongside poverty that contribute to child labor.

Geography and Migration

While poverty is a major contributor, the whole picture is more complex. Parents in poor rural areas often face a difficult decision: seek employment in the city and leave the kids to tend to the farm or send the kids to work in the city. In Vietnam, many children in urban centers come from poor fishing and farming villages where economic opportunities are limited. Because income is often not sufficient for family survival, farmers migrate to urban centers for work. With low incomes, poor benefits, unstable employment, and far from traditional family support systems, young migrants are particularly vulnerable to exploitation and encounter prostitution, drugs, and HIV/AIDS infection. Life is not easy for the children left behind, either. When young children are tasked with tending to absent parents’ household responsibilities, their own education and future opportunities may be stunted.

Demand

Demand for cheap labor (supplied by child workers) can be broken down into several components.

Low Wages

As of 2014, Vietnam had one of the lowest minimum wages in the garment and textile industry. ^[xii] Despite producing for some of the most profitable companies in the world, workers in Vietnam’s textile-garment industry work for poverty wages, under harsh conditions, and many take on excessive overtime work. Research on clothing and shoe manufacturing in Albania and cottonseed growing in India demonstrates a correlation between low prices paid by purchasing companies and use of child labor. [xiii]

Complex Global Supply Chains

Every year the US Department of Labor assembles a list of goods believed to be made with child or forced labor in violation of international standards. The 2014 list includes 136 goods from seventy-four countries, including bricks and garments from Vietnam.[xiv] These items are made available domestically, but may also end up in global supply chains. Within the complex supply chains of the garment and textile industry, it is difficult for companies to control every stage of production.[xv] This complexity makes it possible to employ children without major brands and consumers ever knowing.

Lack of Regulation in the Informal Sector

Regardless of sector, child labor is largely prevalent in the informal economy, which is beyond the reach of official regulatory institutions including labor inspection services.[xvi] Like many other industries, over the past few decades, global garment manufacturers have outsourced production to developing countries in order to cut costs and remain competitive. In these countries, increasingly work is done in the informal sector; middlemen are responsible for distributing unfinished garments into individual households and then returning finished products back to the factory. Today, a significant part of piece work—stitching, hand embroidery, finishing processes—is done in homes without any sort of oversight.[xvii]

Thinking about demand brings me back to my core research questions: What standards are acceptable to companies seeking to produce apparel and other goods in a climate where there is such uncertainty around employing young people? And as consumers, are we comfortable with the idea of fourteen-year-olds dropping out of school to make our clothes and shoes?

TPP: An Opportunity to Rethink Approaches

In coming years, we will likely be seeing “Made in Vietnam” on a lot more of our apparel purchases. With the Trans-Pacific Partnership (TPP) now signed, Vietnam is projected to experience more growth than the eleven other countries under the trade deal. Over the next decade, expanded trade through TPP will likely boost Vietnam’s GDP by 11 percent, or 36 billion USD.[xviii] Total exports could grow by a third, and apparel and footwear exports by half.[xix]

Much of the debate around the TPP in the United States has been around the deal’s impact on labor. TPP proponents see the trade deal as an opportunity to promote international human rights. The deal commits the Vietnamese government to passing new laws that ensure better wages and working conditions, and would allow workers to freely unionize and strike.[xx] Skeptics express doubt about whether the government would enforce any new laws.

While it is broadly accepted that foreign trade benefits developing countries, short-term benefits and costs are distributed disproportionality between different groups within society. One group that will most certainly be impacted by the increased labor needs of Vietnam’s garment sector is child laborers. In the roll out of TPP, companies have an opportunity to examine their impact on child labor. 

The Goal: Eliminating the Worst Forms of Child Labor—or Developing the Best?

Whenever possible, companies should pay adults fair wages to avoid family reliance on supplemental income from children. Government efforts to crack down on child labor must be coupled with viable economic options. The Vietnamese government recently developed a national plan to eliminate the worst forms of child labor, which should be approved in coming months.[xxi] Companies can help reinforce these efforts through policies and employment practices. For decades, multinational companies have tried to strike the right balance. To highlight one approach, Swedish furniture manufacturer IKEA implemented a “zero-tolerance” policy in Vietnam in the early 2000s, threatening to cancel all contracts with suppliers in Vietnam if a single incident of child labor were detected.[xxii] Yet in many parts of the world, factors of poverty, migration, and demand for cheap labor converge to create conditions where child labor continues to thrive.

In 2014, the government of Bolivia turned a new corner in the child labor debate by legalizing work for children as young as ten years old. For children ages ten to twelve, work is allowed if they attend school, are self-employed, and obtain parental permission. Remarkably, it was children—as members of the Bolivian Union of Child Adolescent Workers (Unatsbo)—who drove this change.[xxiii] Some children in Bolivia believe that an all-out prohibition of child labor prevented the implementation of any legal protection and made young workers more vulnerable to abuses by employers. Other Bolivian children oppose the new policy; they feel working during their developmental years will prevent them from obtaining an education and reaching their potential.

If we accept that some level of child labor will occur in the developing world, at least for the foreseeable future, efforts to protect children must shift from ineffectual zero-tolerance-based platitudes to actionable harm-reduction models. Zero-tolerance is not a feasible strategy. So what can companies like Sports Philosophy do? While elimination of child labor ought to be the ultimate goal, perhaps the interim goal should be reducing harm to those children who are already working.

A young man sleeps in Hanoi’s Dong Xuan market, December 2015. (Photo Credit: Caitlin Ryan)

Toward a Harm-Reduction Approach

Companies have an opportunity and obligation to develop programs that reduce risks to children who are unable to quit working. Further research and innovation is needed to find solutions that consider the best interests of working children. Here are some starting points.

Work and Learn Models

Working children have the opportunity to break out of a family cycle of poverty only if they can develop marketable skills. In the United States, the Jesuit Cristo Rey schools offer an interesting model to employ and educate inner-city youth. Through Cristo Rey’s Corporate Work Study Program (CWSP), high school students work five days a month in entry-level jobs in the community. In return, employers pay for 70 percent of educational costs. The CWSP not only covers the school’s operating costs, it provides students with valuable work experience and empowers them to finance their education.[xxiv] Boldly innovative employers operating in Vietnam or other developing countries could adapt this model to fit the local context.

Reduce Information Asymmetry

Many laborers in the developing world, including child laborers, are disadvantaged due to a lack of information. Better knowledge about employment opportunities and risks could be shared with migrant worker populations. In one example, Contratados.org offers migrants from Mexico working in the United States an avenue to create and read Yelp or TripAdvisor-like reviews of employers and labor recruiting agencies. Through the website, workers can warn others of employers to be avoided.[xxv] Developing such tools would help fair employers attract and retain a sustainable workforce.

Conclusion

My field research showed that definitions of child labor do not appear so black and white in practice. New solutions must meet families where they are today; protecting the best interests of the child may not always mean removing him or her from work. Further research is needed to understand all the difficult factors beyond poverty that a family weighs when deciding whether to send a child to work.

I think about the young women I met in the shop in Hanoi. I wonder whether there could be a pathway for the girls to work and to also pursue a decent education. As a student of public policy, a consumer, and a global citizen, I still have many questions about how to ethically employ children. But perhaps traditional zero-tolerance policies are missing the mark.