According to the status quo, our government is the reason why we live in such a harmonious place.  The government supposedly creates order, and keeps the citizenry safe from the horrific externalities of the universe.  They somehow believe that the government is like a care bear, and it’s only purpose is to serve the people; it never has any “self interest” of its own.  We are taught this dogma in our public schools, but when you’re a younger person, you don’t really think about refuting your “masterful” all knowing teachers.  You expect that your teachers know all since they are older, and you learn earlier on that if you even think about standing up to your teacher, you would be wasting your time.  After going through the rabbit hole of libertarianism, your statist teachings become dispensable.  A lot of dubious claims were told to us when we attended these public schools, and there’s one claim that I’m choosing to refute in this article: Government and child labor laws are the reason that child labor has become a rarity.



Child labor is definitely a topic you don’t want to bring up during a first date at a nice restaurant.  The chances of you having a logical conversation about child labor are very slim.  It’s a topic that is filled with emotional outrage, and being on the contrarian side — like me — would definitely not get you a second date with the girl of your dreams.  Most people equate child labor to slavery, and they despise the practice claiming that it is dangerous and exploitative to our children.  There’s some questions that these all knowing moralists forget to ask though: Why does child labor even exist in the first place? And why do such people participate in such practices?  It’s easy to want to eradicate child labor from an ivory tower in a wealthy country like America, but if you’re a low income parent of a child in an extremely impoverished country, it’s not so simple and your choices are very limited.




Child labor is a symptom of extreme poverty; the kind of poverty where the average person lives off of a dollar a day.  These people live in conditions that make the average poor american look very prosperous.  Despite how appalling child labor may look to an average american, a job in a sweat shop might be the only chance for a child in an impoverished family to escape starvation.  In some developing countries, children can earn up to 25 percent of the family income which is extremely vital for a family.  Especially if you’re living under these circumstances.  We can easily see that one of the major reasons why children participate in these jobs; it is one of their best options for their families and themselves to survive.  These parents aren’t ignorant heartless beings, they are just responding to the cruel features of living in an extremely harsh environment.  Now the moralists would cry for compulsory schooling for children in these developing countries, but not all governments can afford such a program, and this presumes that compulsory schooling will actually benefit the children.  In very poor and rural countries, sources are very limited to schools so these schools might not be as efficient as the moralist would like them to be.



So that brings us to this question: How did child labor dissolve from the modern economy? It certainly didn’t come from bans and legislative measures.  Economic freedom, increased productivity, and accumulation of savings and wealth are the three primary factors of this phenomenal change in economic activity.  If you were to look at Exhibit 1.15 of the 2005 Economic Freedom of the World Report, countries with more economic freedom have lower percentages of children in the labor force.  It shouldn’t come as a surprised that countries with higher ratings of economic freedom generally have better literacy rates, lower infant mortality rates, and higher incomes.  As you can see from this graph, countries that exceed 12,000 dollars per capita have practically no measurement of child participation in their economies.  Making child labor illegal in a country where child labor is a persistent factor in an economy will only worsen the working conditions of children, and it will deplete wages lower than they would be otherwise.



If an economy is reliant on child labor, prohibiting the practice will be extremely useless.  The only outcome that happens under useless government bans is the creation of an underground economy where violent criminals run the show; the children suffer more than anybody under these prohibitions.  India is a brilliant example of child labor prohibitions, mandatory schooling, and other governmental interventions being worthless in the fight against child labor.  Despite all the government bans, 28 million kids are still engaging in child labor.  India enacted the Right to Education Act in 2009 which gave the government the authority to provide compulsory education to children ages 6 to 14.  A year after India enacted this amendment, they’re still 8.1 million kids that are not in school.  The Mines Act — which was past in 1952 — bans anyone under 18 from working in the coal mines.  Despite the law being in place, around 70,000 kids work in the coal mines located in Shillong, the capital of the Meghalaya region in India.  Lets take a deep glimpse into this.  From the New York Times:


“Suresh Thapa, 17, said that he has worked in the mines near his family’s shack “since he was a kid,” and that he expects his four younger brothers to follow suit. He and his family live in a tiny tarp-and-stick shack near the mines. They have no running water, toilet or indoor heating.

On a recent day, Suresh was sitting outside his home sharpening his and his father’s pickaxes — something he must do twice a day. His mother, Mina Thapa, sat nearby nursing an infant and said Suresh chose mining himself.

“He works of his own free will,” she said. “He doesn’t listen to me anyway, even when I tell him something,” she added with a bittersweet laugh. “


As we can see, these people do these kinds of jobs on their own judgement and choice.  We shouldn’t ridicule them for acting on their instincts. That is not the only child labor legislative action that has been proven to be worthless in the fight against child labor in India;  The Child Labour (Prohibition and Regulation) Act of 1986 is also another failure of good intentioned government intervention.  According to a study by the National Bureau of Economic Research :


“While bans against child labor are a common policy tool, there is very little empirical evidence validating their effectiveness. In this paper, we examine the consequences of India’s landmark legislation against child labor, the Child Labor (Prohibition and Regulation) Act of 1986. Using data from employment surveys conducted before and after the ban, and using age restrictions that determined who the ban applied to, we show that child wages decrease and child labor increases after the ban. These results are consistent with a theoretical model building on the seminal work of Basu and Van (1998) and Basu (2005), where families use child labor to reach subsistence constraints and where child wages decrease in response to bans, leading poor families to utilize more child labor. The increase in child labor comes at the expense of reduced school enrollment. We also examine the effects of the ban at the household level. Using linked consumption and expenditure data, we find that along various margins of household expenditure, consumption, calorie intake and asset holdings, households are worse off after the ban.”



As we can see, the good intentions of government intervention are nowhere near enough to provide the tools to fight child labor.  If there’s anything that the Indian government can do, it’s to ease or abolish these restrictions and let children work if they choose to.  Obviously, I wish there were better opportunities for these children, but in reality, you are not going to bring about these opportunities through the arbitration of the state. If you want to get rid of child labor, you need to be in it for the long haul, and it’s something that doesn’t go away over night.


Savings need to accumulate in order to acquire better equipment and tools which will supercharge their productivity.  The more productive you become, the more capital you’re able to save; the more capital you have, the more investments that can happen.  I wish getting rid of poverty and child labor was as easy as flipping a switch, but thats not the world that we live in.  Now you could say : “Vincent, comparing India and America is just like comparing apples to oranges, we needed the regulations to get rid of child labor in America.”  I would vehemently disagree with that statement also.  Let me explain more: child labor was extremely ubiquitous throughout the 19th and early 20th century in the United States; it was normal for children under 15 to be working during this period of time.  The progressive era soon came along, and the view of child labor changed dramatically.


The reasons that child labor occurred during this period of time are similar to why India still has child labor today: extreme impoverishment being the dominant factor.  According to a Department of Labor survey from 1917-1919: children made to 23 percent of family income on average.  Just like India, citizens of America relied on their children’s labor in order to survive; parents weren’t just throwing their kids to the wolves.  Prior to 1938 — before the Fair Labor Standards Act which was the first federally accepted law to deal with child labor — laws that dealt with child labor were left up to the states, and it should be noted that these laws weren’t enforced too well either.  It’s extremely difficult to configure if legal impediments had any effect on child labor as a whole since states have different laws.  Studies have shown though that technological advances played an extremely huge role in reducing child labor. From page 770 from a study done by Brown, Christiansen, and Philips — which looked at the canning industry during this period of time — it concludes:


“In the case of the fruit and vegetable canning industry, located on the political and economic borderland between manufacturing and agriculture, legal restrictions were relatively ineffective as long as most canners had a substantial economic interest in the employment of children.  The widespread exemptions for perishable commodities embedded in child labor laws and the slack enforcement of compulsory schooling laws in rural districts attest to the power of cannery owners to evade legal restrictions.  This phenomenon may have been peculiar to the canning industry, which could more easily claim the political protection and exemptions of agriculture than other less seasonal, nonfood-related industries.  For eliminating child labor in the canning industry, we found that legal restrictions were of second importance compared with economic labor demand factors, which themselves might have affected the course of legislation.  Whether or not our conclusions can be generalized to all industries awaits further study.”



I should also mention that by 1930 — 8 years prior to the Fair Labor Standards Act — the labor participation rate was at 6.4 percent for boys that were 10 to 15 year old; the labor participation rate for girls who were 10 to 15 years old was at 2.9 percent.  So prior to any federal legislation against child labor, the child labor force was practically diminished.  There’s definitely not enough evidence to claim that government legislation is the true catalyst of ending child labor, state laws had very little — if not any — impact on child labor.  We do know that if a country is poverty ridden and lowly productive that banning the practice won’t possibly work as long as there is a demand for such labor.  We do know, however, that wealth accumulation and increase productivity are the most effective tool at fight child labor.  The FLSA (Fair Labor Standards Act) was implemented at a time when child labor was becoming obsolete, so to make the claim that this legislation and other state laws were the nail that closed the coffin on child labor is not backed up with substantial evidence.  According to the Economic History Association:



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.



Now don’t let this article make you believe that I actually like these jobs for children, I truly abhorred the conditions that these children in India, and the children that were alive during the industrial revolution had to work in.  I understand that these conditions come with the sickening lifestyle of severe poverty; I understand that this is not a problem that cannot be solved with a stroke of a pen; I also understand that this is a long term battle that needs to be fought with fierce effort.  Using the legislative power of the state will either worsen the disease or not have any affect at all.  Economic freedom, wealth accumulation, and increased productivity are proven to be the best tools to fight child labor.  So when you’re about to protest sweat shops and other forms of child labor in these oppressed third world countries, think about what might happen to these children if they didn’t have those opportunities.  Child labor might look horrendous from your first world Mac book, but if you really look into the deeper aspect of it, it could be one of their best chances of achieving financial stability for these desperate people.  I wish it wasn’t this way, but life is not a wishing well; it’s a creation, and you’re the creator.