When Child Labor Is Ethical

Multinational corporations have experienced withering criticism for employing children in Asian factories. On the surface, this practice appears to be unethical. But is it?

When we study supply chain management, I engage my students in a discussion of this topic. Here is the scenario:

Industrial textile factory
Industrial size textile factory in developing country, workers on lunch break

“Major corporations with overseas subcontractors (such as Ikea in Bangladesh, Unilever in India, and Nike in China) have been criticized often with substantial negative publicity, when children as young as 10 have been found working in the subcontractor’s facilities. The standard response is to perform an audit and then enhance controls so it does not happen again. In one such case, a 10-year-old was fired. Shortly thereafter, the family, without the 10-year-old’s contribution to the family income, lost its modest home, and the 10-year-old was left to scrounge in the local dump for scraps of metal.” —adapted from  Principles of Operations Management

A student of mine from India said that the decision to hire the child was ethical; and the judgment to fire him was unethical. My student defended his position by stating that Americans do not understand the depth of poverty in India. In many circumstances, families rely on child labor, so that the family can survive. When he grew up, there was no compulsory education, so working did not deprive Indian school-age children from going to school. [In 2009, the Indian parliament legislated a compulsory education law for elementary school children.] Other students of mine who have grown up in developing countries—such as China and Bangladesh—have agreed with this line of reasoning.

After all, during the 19th century, the U.S. was once a developing country. For many years, we condoned the practice of employing children in the workplace. Once our standard of living improved—and universal, public education became a realistic objective—we passed child labor laws that prohibited this practice. So, in the present, does showing outrage at Ikea, Unilever and Nike amount to hypocrisy?

It is useful to examine public policy decisions through the lenses of utilitarianism. This philosophy states that, in all situations, you should act in a way that generates the greatest benefit for the greatest number of people. Everyone’s interests are considered equal. Thus, if utterly poor families are only able to survive when the children can work, it is unethical to prevent them from doing so. By permitting child labor, we are promoting the greatest good for the greatest number of people. The family remains intact as a result of the income received, while U.S. and European consumers obtain inexpensive goods from their retailers.

Although the philosophical justification for child labor is convincing, major corporations cannot withstand the negative publicity associated with these practices. Just this week, Apple indicated that they are going to have an independent firm audit its suppliers, because of criticisms over conditions at its overseas factories. So, from a public relations perspective, not a moral perspective, we cannot condone this practice.

Several years ago, Nike initiated a compromise solution. Children worked in their Vietnamese factories, but the company also provided them with food and a free education.

Do you think that it is ethical to employ underage children in factories located in developing countries? If a multinational corporation also provided educational opportunities, would that be acceptable?

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  • youngperson

    Interesting post. Obviously the safety nets in the U.S. and Europe are much greater than those in developing countries, so the idea that a family would rely on the wages of a child in order to be able to afford such basics as food and shelter is inconceivable to us.

    But while child labor is unfortunately necessary to the survival of many families in the developing world, I don’t think that gives Western companies a carte blanche to exploit such a reality in order to create a cheaper tennis shoe. These corporations are not simply hiring younger workers; they are often employing them in conditions that are downright inhumane. When Americans or Europeans are outraged to discover that Nike or Ikea employs children in its factories abroad, I think it is more about the sweatshop-like environments rather than the young ages of the employees alone. Perhaps that is why Nike has been able to repair its image somewhat by providing its child employees with food and education.

    Moreover, I don’t think labor practices during the Industrial Revolution absolve 21st century Western companies from applying modern standards to their employees, whether they live in the U.S. or China. As Americans, are we really being hypocritical to be outraged by inhumane working conditions in American-owned factories in Vietnam or Bangladesh simply because similar practices were once employed here? Could we not be righteously outraged by modern-day slavery, or by a foreign government that denies women the right to vote? I am not arguing that Western governments should forcefully intervene in foreign countries that do not share our values or our laws. But I think that it’s cynical to say that major corporations can exploit a lack of labor laws in developing countries without any ethical trespass.

    So while I believe that there are certain situations in which Western companies can employ children in developing countries ethically, I think that it’s something that must be done with the utmost consideration and care.

    • http://www.businesstheory.com/ Timothy Mojonnier

      Thank you for your comments and observations. I want to clarify one point where you state: “I don’t think that gives Western companies a carte blanche to exploit such a reality…employing younger workers in conditions that are downright inhumane.” In reality, it is the suppliers of the major western corporations who are most often responsible for the conditions that you cite. Currently, Apple’s current public relations problems pertain to allegedly, substandard conditions within its supplier network. No one is accusing Apple of sweatshop-like conditions within any of the facilities that it owns.

      Nevertheless, I totally agree with you—and probably should have made it more explicit—that the idea of children working in “sweatshop-like” conditions is deplorable. For that matter, it is inhumane for anyone to work in that type of environment. Western companies must rigorously enforce and audit their suppliers to root out those who are mistreating their workers.

      Having said that, we must appreciate the fact that the wages that the “tennis shoe” workers receive are helping to bring many people out of poverty and into the middle class. As long as working conditions in the factory are humane, the right thing to do may be to refrain from imposing our moral standards on a developing country, relegating the child to scrounging in the local dump.

  • Mans Carlsson


    Both Chinese and Bangladeshi laws prohibit child labour. They also have a number of restrictions on over time.

    When Western retailers find a breach, the right thing for them to do is not to terminate their relationship with the supplier. Rather, they should work with the supplier to ensure it won’t happen again and to ensure that the child in question gets the education he or she needs until he or she reaches the legal age to work and can decide for her/himself. If not, the problems will just go on and on.

    I know that child labour was rife in US and European companies and factories a hundred years ago but we in the developed world certainly have a moral obligation as we are the ones that buy the products. The reason why many retailers are located in Bangladesh is not just because the unit labour cost is cheaper there. In addition, labour law enforcement is very poor, which means factories get away with breaching a number of labour laws. There is only one word for that: exploitation. Even China is relatively good in terms of labour law enforcement compared to Bangladesh.



  • http://www.Cry.org Eithan

    Yes I agree with that Multinational corporations have experienced withering criticism for employing children in Asian factories. On the surface, this practice appears to be unethical. I think we can also help for underprivileged childrens of India by the support Cry Org. because it works for Child education India.

  • puremind

    I personally believe that child labour is a rather win-win situation, for both the company and the children, considering their economy, and countries they come from, not only from a utilitarian dimension but also, to some extent from what Rawls argues with the aid of his theories of Justice Principles, where the right to work of the children is pointed out, provided they are also benefited from their basic rights such as Education, like Nike has been providing. Also his difference Principle argues that the rights of minority should not be overlooked, and child labour is providing them with benefits,i guess its not bad. For sure, what Kant and other normative philosophies state is good, i.e exploitation of child and child labour is wrong in nature, but in conditions of developing countries, and under developed ones, if this allows them, to survive, we should make exceptions.

  • http://www.b2b.com/ Navdeep Sidhu

    You pose an interesting ethical dilemma that we don’t usually think about when you hear about child labor—is it ethical to exploit the needs of an impoverished family so your company can cut costs? Or is your company actually doing a service to your workers by providing them with an income they would not otherwise have? Which moral dilemma wins out in the end?

  • http://www.m-pro.ca/ Nik

    Interesting posts. It is unfortunate that child labor is something normal for families in developing countries. International companies just adapt to the situation and try to cover the ethical problematic by implementing such programs as the education and food for the workers. I think that it is desirable in the short-run as it helps the children and meanwhile, it reduce the risk of criticism from the public. However, I think that with the huge influence multinational corporations have in these countries, they should aim to achieve changes in the government level to solve the problematic in the long-run.

  • Wilhelm

    I don’t agree with the argument, that it is moral to employ the child while contributing to his/her education in order to avoid a worsening of the situation as stated above. The corporation should give the father or the mother a job with a salary that would allow the family a decent life instead of employing the child. As a consequence the child could go to school and maybe even have some spare time to play with its mates.

  • Graeme

    I am glad to come across this post as I prepare for my Business Ethics exam.

    I agree with pureminds analysis. The only disagreement I have is the “exceptions”. A difference between developed and undeveloped countries does not need to exist in this instance. In developed countries, children earn their “pocket money” by washing cars or cleaning tables at a restaurant or delivering newspapers. A child working in a factory to earn money should not be discouraged as it is perhaps their entitlement (Nozick, R., 1974).

    Further to this I believe education is not provided by simply sending a child to school. We see similarities with masters degrees that there is a gap between theorists and practitioners. It can be argued that the child is being educated through practical experience and real life interaction by working in the factory. In the real world, practical experience carries equal weighting (if not more) to that of a piece of paper that states one was educated in an institution.

    Tim alludes to the conditions that are inhumane even for adults. Perhaps we are concentrating too heavily on child labour instead of labour conditions. We are saying it is okay for a child to wash a car for money, but it is not okay for a child to sew for money. Perhaps our efforts should be concentrated on working hours, rate of pay, working environment rather than the abolishment of “child labour”.

    More research is required from the question Tim poses in his first paragraph because I believe there is sufficient research opposing “child labour”.

  • Wilhelm

    As far as I understand the term “education”, i believe that this concept can be hardly separated from some formal or informal type of school. Being able to read and write or to calculate something are rather basic issues of any kind of education. Insofar a distinct term should be used for things that we don’t learn in school; maybe “everyday experience”, “real-life knowledge”, “practical sense” or another better suited term. Moreover I intended “going to school” in the sense of “doing things that children do” because they have the right to be children before they become adults.