Analyzing Child Labour in Supply Chains: Economic Impact and Solutions

This case study examines the complex issue of child labour within global supply chains, arguing against a complete ban due to its economic role in developing countries and the potential for worsening poverty. It highlights the dependence of industries in low-income nations on child labour to meet international demands and the role it plays in supporting economic development by improving infrastructure and living conditions. The report suggests that banning child labour without addressing underlying poverty issues could lead to more dangerous situations for children. Recommendations include focusing on poverty reduction, providing quality education, and regulating low-tier supply chain activities to ensure fair wages for adult workers. The study concludes that child labour, while ethically problematic, is currently essential for the economic stability of many regions and that alternative solutions should be prioritized before implementing a ban. Desklib offers a platform for students to access similar case studies and solved assignments.

Child labour in supply
chains

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY ..................................................................................................................................3
Role of child labour in supply chain ..........................................................................................3
Essential nature of child labour ..................................................................................................3
Impact of banning child labour on children in extreme poverty ................................................4
Recommendations.......................................................................................................................5
CONCLUSION ...............................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Child labour is defined as activities which strip children from enjoying their childhood,
their potential and self-worth and damage their physical and mental well-being (Munala and
Moirongo, 2017) . Child labour is practices in global supply chains and various humanitarian
organizations and governments have taken steps to ban child labour internationally. The present
report provides argument against ban of child labour from global supply chain.
MAIN BODY
Role of child labour in supply chain
Currently more than 152 million children are engaged in child labour in global supply
chain supporting economic progress of developing regions (Next steps to end child labour in
global supply chains, 2020). A large portion of child labour in global supply chain occurs in
lower tiers including activities which are not part of actual manufacturing of different products.
This concludes activities such as raw material, extraction, agricultural activities making due
diligence, traceability difficult. 19.6% of child population in Africa is employed in child labour.
On the other hand 7.6% of child population in Asia engages in child labour. The global fashion
industry is highly dependent on child labour for maintaining smooth functioning of their supply
chain as 51 low income countries utilize child labour in a least one part of their garment or
jewellery supply chains (Child Labour in the Fashion Industry, 2021). The statistical data
surrounding child labour makes it evident evident that child labour in developing or low income
countries support supply chain and initiates economic development. Industries in developing and
low income countries are dependent on child labour to produce goods and respond to
international demand. The local labour markets engages in recruitment of child labourers
because they can be employed at minimum remuneration to produce goods quickly. On the other
hand recruitment adults is costly compared to child labour and adult workers can also demand
higher wages and improvement in working conditions by forming unions (Aygün and et. al.,
2021). Child labourers can be easily controlled which increases the benefits of recruiting child
labourers for low tier business firms who gain low profits from international industries.
Essential nature of child labour
Child labour is essential for low income and developing countries but also plays an
important role in global economic development. Global supply chain are dependent on cheap

labour provided by child labour practices to ensure economic growth and satisfy global demand
for various goods. Another factor which depict is necessary evil is that high levels of child labour
in an industry impede economic development (Bende-Nabende, 2017). This economic
development helps uplift lifestyle of individual suffering from extreme poverty as governments
improve public infrastructure. In this way child labour plays an important role in improving
working conditions of individuals at the lower end of economy. One of the primary reason
behind child labour is poverty and banning child labour will not solve this problem in many
economically weak countries. It will create more problems for children who are extremely poor
because they will lose their only source of survival and economic stability. Children will be
forced to enrage in dangerous occupations or will not be able to survive health issues caused by
extreme poverty (Iversen and et. al., 2017). In addition to this banning child labour in couturiers
which are ravaged by termism and civil war will deprive poor families from valuable income
provided by children. Children will be dependent on the low income of the adults in their
families and children without any families will not be able to survive dangerous regions such as
war zones. Banning child labour will prove to be deadly for children from poor families.
Impact of banning child labour on children in extreme poverty
The primary impact of banning child labour will be economic downturn in lower income
countries as main part of their workforce will be deemed incapable of working. This will reduce
the speed of global supply chains and increase cost of various products (Oelze, Gruchmann and
Brandenburg, 2020). This will create inflation and higher inflation decreases the share of bottom
quantile and the minimum wage. This will drive more individuals and families towards poverty
which will worsen living conditions for large number of children on global scale. In addition to
this increasing poverty will create dangerous situations for children as they will not be able to
seek material for survival such as food, water and shelter easily. The short term impact of child
labour is that it increases the ability of poor households to survive for long time period. This is
because maximum number of individuals of the household are providing income and food. In
addition to this children living without parental support will not be able to gain income on their
own and will be forced to take shelter with exploitative individuals (Karhula, Lehti and Erola,
2017). This will worsen situation for children from economical weak sections of the society on a
global scale instead of giving them opportunity for better future.

Recommendations
 One of the main reasons banning child labour worsens situation for economically weak
children is the presence of poverty. It is suggested to take steps towards reducing poverty
on global scale before taking steps towards banning child labour. This is valid
recommendation as uplifting families from poverty enables children to seek education
and build better future.
 It is important to provide quality education to children in economically weak and
developing countries so that they gain opportunities to utilize their potential for better
future. Poor families will also accept sending their children to school if they gain shelter
food and development opportunities (Oelze, Gruchmann and Brandenburg, 2020). This
will discourage child labour in a way which does not have negative impact on poor
families.
 Low tier activities in supply chain need to be regulated so that workers gain proper wages
and are able to support their families. This will discourage families from engaging their
children in child labour as their basic needs will be covered by income from adults.

CONCLUSION
From the above report it is concluded that child labour is essential foe economic
development of the world. Lower income countries and global supply chains rely on child labour
for fulfilling consumer demand and economic prosperity. Banning child labour is not beneficial
prospect as it does not eliminate poverty of families engaging in child labour. This can worsen
conditions for children suffering in extreme poverty as their source of gaining food and shelter is
taken away.

REFERENCES
Books and Journals
Aygün, A. and et. al., 2021. Keeping Refugee Children in School and Out of Work: Evidence
from the World&Apos; S Largest Humanitarian Cash Transfer Program.
Bende-Nabende, A., 2017. Globalisation, FDI, regional integration and sustainable
development: theory, evidence and policy. Routledge.
Iversen, M. L. and et. al., 2017. Danish women's experiences of the rebozo technique during
labour: A qualitative explorative study. Sexual & Reproductive Healthcare. 11. pp.79-85.
Karhula, A., Lehti, H. and Erola, J., 2017. Intergenerational scars? The long-term effects of
parental unemployment during a depression. Research on Finnish Society. 10. pp.87-99.
Munala, G. and Moirongo, B.O., 2017. The need for an integrated solid waste management in
Kisumu, Kenya.
Oelze, N., Gruchmann, T. and Brandenburg, M., 2020. Motivating factors for implementing
apparel certification schemes—a sustainable supply chain management
perspective. Sustainability. 12(12). p.4823.
Online
Child Labour in the Fashion Industry, 2021. [Online] Available through
<https://www.commonobjective.co/article/child-labour-in-the-fashion-industry>
Next steps to end child labour in global supply chains, 2020. [Online] Available through
<https://www.ilo.org/global/about-the-ilo/newsroom/news/WCMS_735420/lang--en/
index.htm>