Child labor: The inconvenient truth behind India’s growth story

By Josh Jacobs and Reeva Misra | September 1, 2017

Seventy years ago, India gained independence. The country has since created one of the world’s largest economies. But despite its wealth, 33 million children from ages 5 to 18 are working – and almost one third of this group are under 15 according to Save the Children India, making India home to one of the highest concentrations of child workers in the world.

Economic theory suggests that child labor would be all but eradicated by growth and development. But after some successful efforts to increase the number of children in school and to rehabilitate former child workers, the national effort to eliminate the practice is losing momentum and child labor in major cities has increased significantly, according to interviews with more than a dozen child rights groups, academics and international organizations.

“People have dropped the ball,” said Joachim Theis, UNICEF India’s Child Protection Chief from 2013 to 2016. Child labor “is being seen as something which is too difficult” to stop.

Since the election of the pro-growth prime minister, Narendra Modi, in 2014, India has implemented ambitious reforms aimed at deregulating and growing its economy. Under his watch, the country at one point overtook China as the world’s fastest growing economy (although it ceded this position earlier this year), and is predicted to average an impressive real GDP growth of 7.4 percent this year and next, says a report this month from Deutsche Bank.

But the nation’s development has been segmented, and much of it has not impacted the areas of the economy where children tend to work. “India’s GDP and growth is largely oriented around a highly educated and highly skilled workforce,” said Rajeev Dehejia, professor of public policy at New York University. “This is paradoxical for an economy where most people have a low level of education.”

Conversely, most child labor is concentrated away from the skilled economy, in the informal sector that makes up about 90 percent of India’s workforce and half of its GDP, according to Credit Suisse estimates. Here, children are not subject to government inspections, legal protections or minimum wage requirements. Such industries include agriculture, small factories for carpets and clothing, brick kilns and domestic staffing.

“It is very under the table,” said Nina Smith, chief executive of GoodWeave International, which works against child labor in global supply chains. “There is a huge workforce that is unregulated, does not really benefit from labor laws, and is highly vulnerable to exploitation.”

The Indian government says that there has been a decline of 45 percent between 2005 and 2010. But most child rights groups give a more conservative estimate, as government figures do not include all children or all parts of the informal economy.

Some suggest that child labor rates have plateaued in the years since the last census, but with no new national count and the definition of child labor constantly changing, the exact number is unknown. It is a challenge to generate precise figures because of the covert nature of the practice; many children are kept in hidden workplaces, such as employers’ homes and small-scale factories.

Puja Marwaha, chief executive of Child Rights and You, a major Indian nongovernmental organization, said that child labor has redistributed as children have migrated to large cities like Mumbai and Delhi in search of work. To bolster her case, she cites government data showing a 60 percent increase in the number of children working in Mumbai in the decade leading up to the most recent census in 2011.

Mumbai is not the only case of children moving to cities for work. Across the country as a whole during this period, there was a 54 percent increase in urban areas in children aged 5 to 14 who are working, UNICEF figures show. (There was also a 27 percent decrease in rural areas, where most underage work is concentrated.)

Since the 1930s, numerous laws have been introduced banning child work and encouraging education in the country. A 2009 act requiring all children between the ages of 6 and 14 to attend school is one example. In July, the Indian Parliament passed an amendment to existing child labor legislation that imposed a widespread ban on children under 14 working and increased penalties for employers. It also contained a measure allowing children to work in family businesses which, critics say, de facto legalizes much of the child labor across India’s villages.

But such legislative restrictions have little impact in the informal economy, and a culture of impunity makes prosecutions difficult, even where children are treated violently. Only 14.3 percent of the child trafficking cases sent to trial in 2015 resulted in convictions, for example, according to India’s National Crime Records Bureau.

Many development economists think that eradicating child labor boosts long-term growth, by increasing wages (children tend to be paid less, which depresses average wages) and by creating a more skilled economy.

“There is vast literature showing that child labor impedes development,” said Sandra Polaski, who worked on child labor reforms for India as deputy director-general of the International Labour Organization from 2012 to 2016. “It certainly impedes the development of the individuals affected, but it also impedes the development of the overall economy, because your future workforce is going to be less well educated.”

It also takes jobs from elsewhere in the economy. UNICEF this year calculated global unemployment would be reduced by 200 million, if the world’s 160 million children ages 5 to 14 who are working were sent to school instead.

These predictions apply particularly to India, which has one of the youngest populations in the world, with about half of its citizens aged under 25 – a factor that will allow it to remain one of the world’s largest growing economies.

But economic arguments have not made clamping down on child labor easy, especially in such a highly decentralized and vast country. At the current rate of reduction, Marwaha said, it will take at least a century to get rid of the practice in the world’s largest democracy.

It is also about changing cultural attitudes, she feels.

“The memory of poverty is so close, because many of us in this country grew up in low income households,” she said. “People are not able to say ‘let the child develop his or her potential.’ But these children are not going to have the skills for the future of the country.”

— The Washington Post