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Writer's pictureJenny Song

Post-Pandemic, Global Issues and Solutions to Child Labor

 Post-Pandemic, Global Issues and Solutions to Child Labor


In the aftermath of the COVID-19 pandemic, a significant disruption emerged within the labor market, characterized by a misalignment between labor supply and demand. Regrettably, this imbalance led to an alarming increase in instances of child labor, emerging as a pressing global concern. International human rights organizations have vehemently condemned the exploitation of migrant children, who, lacking adequate identity documentation and understanding of labor contracts, find themselves subjected to meager wages and exploitative working conditions.


The International Labor Organization (ILO) reports that approximately 70% of child labor incidents are concentrated within agricultural supply chains. This prevalence is attributed to lax enforcement of labor regulations within these chains, particularly in rural regions of developing nations where children are often compelled to labor for survival. Meanwhile, developed countries witness a significant proportion of child labor within service industries, with notable examples such as the 9% occurrence within McDonald's outlets in the United States.


For domestic enterprises, effective management of child labor risks within international supply chains is paramount. It's crucial to acknowledge that domestic firms have also been implicated in child labor incidents, notably within palm oil and automobile manufacturing supply chains. The gravity of the issue is underscored by its prominence within global human rights legislation, with nations like the Netherlands enacting dedicated child labor due diligence laws, and the European Union Council recently passing the Sustainability Due Diligence Directive, which addresses child labor as a critical human rights concern.

Significantly, data from the U.S. Labor Office reveals a concerning 44% increase in the detection of child labor cases from October 2022 to June 2023 compared to the preceding year. Consequently, Elevate, an ESG analysis firm under Goldman Sachs, upgraded the risk rating for U.S. supply chains from ‘medium’ to ‘high’ due to heightened child labor risks. Despite this, the legal repercussions for child labor offenses in the United States remain relatively lenient, with fines averaging approximately $15,000 per child employed, varying by state, without additional legal sanctions.


However, widespread instances of child labor within major corporations like Ford, Wal-Mart, and General Motors prompted swift political action. In response, the White House issued a statement condemning child labor and initiated concrete measures to combat it. Subsequently, the U.S. Department of Labor intensified efforts to crack down on child labor, uncovering 765 cases from the latter half of 2022 to the first half of 2023. Moreover, proposed legislation aims to bolster penalties for child labor offenses, potentially increasing fines to $130,000 per child and up to $600,000 in cases involving injury or death.


Amidst these challenges, diverse solutions are being developed worldwide. The Japan International Cooperation Agency (JICA), for instance, has piloted a blockchain-based platform to monitor child labor, collaborating with local schools, NGOs, and partners. By integrating labor data from local farms with attendance records from schools, the system enhances monitoring efficacy, ensuring children are not coerced into exploitative work environments at the expense of education. Concurrently, IT firms are leveraging blockchain technology to launch supply chain tracking solutions aimed at eradicating child labor. Noteworthy initiatives by companies like IBM and startups such as Source Trace hold promise in strengthening and refining penalties for child labor offenses.





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