Lew Rockwell recently had a short blog post (http://www.lewrockwell.com/blog/lewrw/archives/52120.html) on LewRockwell.com that pointed out the criticism that some have been levying at Apple for allegations of usage of child labor in some of its factories abroad. Though Apple claims that the individuals that were supposedly child laborers are either now of age or no longer work there, controvery remains (full article: http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/7332405/Apple-admits-child-labour-used-at-its-assembly-plants.html)
But why? What is so godawful about children making a choice like that? Some critics have brought up various safety concerns related to hazardous materials nearby, and poor conditions at the factory.
The first point of this matter is that these children made a choice. Misesian praxeology allows us to understand this. The second point is that it's arguable whether these children are really "children" at all in a subjective sense. The 11 individuals in question were 15-years old, which in many countries -- China included -- are practically considered adults already. The entire standard for what is a child and what is an adult is subjective and tied directly to culture.
One individual I'm friends with on Facebook, a social anarchist, condemned this practice and among other things lamented that children like these would not have to work at all if they paid their parents livable wages. Several points can be made from this: first of all, the circumstance are different for different so-called "child" laborers. Some are earning money for their families, others for themselves, others a mixture. Secondly, unless there is government regulation/restriction/monopolization of capital that is giving certain firms monopolies/oligopolies, laborers always tend to earn their marginal value product (MVP). Companies would not pay them more without LOSING money. And of course if the all-knowing state forced them to pay them more than their MVP, this would kill off further job opportunies and -- just as Henry Hazlitt demonstrated so brilliantly in Economics in One Lesson -- create "unseen" consequences.
And not to mention the point that Rockwell made: it's a hell of a lot better these kids are gaining experience than being stuck in government-run schools learning about how the printing press is so wonderful for prosperity and how foreign wars and intervention were for the common good.
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Usually when employers resort to hiring children it is because all available adults are already employed. That is, there is more work than people to do the work and so the labor pool expands to include less desirable workers.
ReplyDeleteSo interestingly, if children were not allowed to work then the worker pool would be completely tapped. Wages for adults would start to rise.
However, rising wages would drive up the cost of supply which would at some point cap demand.
So allowing children to work results in more currency flow into that country. On average the families will make more money even though the adult wages are lower. (The amount siphoned off by corrupt governments, price fixing and creditors is more likely the real problem for the children and their families).
Profit margins not-withstanding. The demand for Apple products is somewhat more inelastic than most companies so your friend is probably right that they "could" pay a slightly higher wage and take less profit. The same cannot be said for Walmart which is at the mercy of pure elasticity.