IN 2012, CALIFORNIA passed the groundbreaking California Transparency in Supply Chains Act requiring large retailers and manufacturers to disclose the risk of forced labor in their supply chains, but what about countless tragedies that child workers in American multinational corporations (MNCs) endure outside the U.S.?
American MNCs are among the most successful in the world. These companies’ supply chains are globally dispersed in geographic locations outside their home country. In 2022, roughly 92 percent of the total supplies of Apple, the second richest company by market cap as of February 2024, were imported from abroad. However, a strong financial performance and sound international image belie the darker ways in which these companies make money.
According to the United Nations International Children’s Emergency Fund (UNICEF), the number of children aged 5-17 years performing hazardous work rose from 6.5 million in 2016 to 79 million in 2020. In 2023, around 1 in 5 of such children in the world’s poorest countries were used for labor encompassing human trafficking and sexual exploitation. The low wages earned by laborers in developing countries are among the key factors for roping children into the workforce. Parents are forced to bring their children to work to ensure that families have basic necessities like food, water and shelter. However, the exploitation of children for labor weakens their bodies and limits their minds. One in seven children worldwide lives in abject poverty today.
As a professor of Entrepreneurship, I have felt enriched by stories of immigrant entrepreneurs in America leveraging their transnational social networks to operate new ventures abroad. The chance experience of teaching Global Dimensions of Business a few years ago was starkly different. Animated discussions around bribery and corruption in American MNCs in almost every class exposed the grave ethical implications of offshoring by large firms doing business abroad. When one of my child-mentees and active advocate for youth rights broached these companies’ use of child labor on foreign land, it was time to call public attention to the issue.
Why American MNCs use child labor abroad
The history of American MNCs’ use of child labor on foreign soil goes back to the early 20th century when the United Fruit Company (UFC) (now called Chiquita) gained approval from the Guatemalan government to produce bananas on their plantations in 1901. The UFC capitalized on the American middle class’ growing interest in other cultures to sell their product. By the 1920s, American demand for bananas skyrocketed, pulling more laborers, mainly impoverished indigenous families in Guatemala, into the workforce.
The exploitation of children for labor weakens their bodies and limits their minds. One in seven children worldwide lives in abject poverty today.
The practice continues to this decade. According to the United Nations’ COMTRADE database, $25.15 million dollars worth of American imports from Lebanon in 2022 comprised agricultural produce that calls for more hands in the workforce, especially children. According to the Harvard Business Review, children in the Democratic Republic of Congo mine cobalt for multi-million dollar corporations like Apple and Volkswagen.
Why use of child labor is unethical
Early on, the use of child labor on Guatemalan plantations instigated horrid abuses through constant exposure to harsh chemicals. Instances of injuries and fatalities are rife on plantations employing children to this day. Child workers on potato farms in Lebanon suffer from a lack of access to toilets and water. Instead of attending school, they are stuck harvesting and lifting heavy loads in sweltering heat.
Corp Accountability Lab reports that impoverished children aged 11 and 12 on Nestle’s cocoa farms in Ghana carry bags heavier than their own body weight. According to UNICEF’s Multiple Indicator Cluster Surveys (MICS), of the 40 percent of children who attend secondary school in Ghana, only 23 percent are of the lower class. The long-term neglect of children’s health and lack of investment into their futures sets them up for a lifetime of low-paying jobs, perpetuating the cycle of poverty.
To be sure, programs centered on the eradication of child labor have surfaced. Stop Child Labor Coalition, a program initiated by UNICEF Netherlands, and Save the Children International “Work: No Child’s Business,” are key examples. Active in countries such as India, Jordan, and Mali that have the highest rates of child labor, these programs protect child migrants and address their lack of access to quality education, skills training, and other resources.
Despite these initiatives, UNICEF reports that efforts to diminish child labor halted in 2021. The COVID-19 pandemic and recent climate-related disasters and humanitarian crises have prevented children from gaining access to life sustaining resources. Joining out of necessity, the majority of children who are recruited into the workforce remain unaware of their rights.
What can be done to prevent this practice
First, the U.S. government can invest in programs aimed at withdrawing children from the workforce and placing them back in school. Such human capital investments can prepare overseas workers for skilled jobs, benefiting the U.S. economy in the long term.
Second, American MNCs can fund quality health care and public education for children. In embracing the triple bottom line encompassing social and environmental concerns over and above the profit motive, big businesses can demonstrate corporate social responsibility to their customers.
Third, grassroots advocacy is necessary. It is in our hands to campaign for legal and social change. We can donate to anti-child-labor organizations and harness the power of social media to call out companies that impose injustices on children. The recent lawsuit against the Biden administration for failing to ban imports of cocoa harvested by children in West Africa suggests that watch dogs like International Rights Advocates are willing partners in our quest for identifying and researching human rights violations. Finally, we can volunteer for underprivileged children’s education programs to immerse ourselves into their lives. With understanding comes empathy, and, with empathy, we can speak for the liberty and justice of all.
About the authors
Sarika Pruthi is an Associate Professor at the Lucas College & Graduate School of Business, San Jose State University, where she teaches courses in Entrepreneurship and International Business. She is winner of the Best Reviewer Award for two consecutive years (2022 and 2023) at the leading Academy of International Business annual conference where she presents her research, and a Public Voices Fellow with the OpEd Project.
Evani Purohit is a junior at Presentation High School in San Jose, where she is a robust advocate for youth rights, especially in underserved populations. When not in school, she enjoys dancing, painting, and writing poetry.