The Mises Institute monthly, free with membership
Volume 14, Number 9
Kathie Lee's Children
by William Anderson
Media personality Kathie Lee Gifford took quite a pounding
when the National Labor Committee, a labor union organization,
found that some of the clothes sold under her label in the U.S.
were made by children in a Honduran "sweat shop."
Union lobbyists and their paid-for politicians paraded
15-year-old Wendy Diaz around Washington to testify about how
badly the factory had treated her: long hours, few bathroom
breaks, and 31 cents an hour. The unions then insisted that no
more clothing be imported from this factory, or any similar one,
until child labor comes to an end.
Gifford, now properly contrite, has devoted her life to ending
child labor. She has endorsed the UN's International Labor
Organization bid for U.S subsidies to enforce a global ban on
employing young people and otherwise implement its socialist
charter. Gifford also promises to donate the profits from her
clothing line, now made only by adults, to a myriad of liberal
A few days after the Gifford story broke, the unions took
advantage of the attention and stepped up their campaign. They
said that basketball shoes bearing the name of Michael Jordan
were made by overseas children making even less than Kathie Lee's
But the story did not take off like Gifford's. The reason:
Nike fought back. It pointed out that the workers in Pakistan who
make Nike products earn five times the pay of other workers in
that country. Far from exploiting children, Nike is actually
doing the workers of Pakistan a great service by importing shoes.
Basic economic logic explains why. If young people and their
families in the third world would be better off idle, they would
stop working. If they could get higher wages for the same work,
they would change jobs. If they could make a better investment in
their future in some other way, they would do so. As it stands,
however, these supposed "sweat shops" are the best thing that's
happened to the third world in decades.
Let's return to the Gifford case. Ten years ago, Honduras had
virtually no assembly plants. But with a booming international
market for clothing, factories have sprung up all over the
country to offer a way out of poverty and disease. Today, the
country has 160 assembly plants that employ some 75,000 people.
Those lucky enough to work in them are doing well in a country
where per capita income is $600 a year and unemployment is 40
percent. Plants routinely subsidize lunch, offer free medical
care to employees, and are air conditioned--benefits unheard of
in other lines of employment.
As one worker told the New York Times, "This has been
an enormous advance for me, and I give thanks to the
maquila [factory] for it. My monthly income is seven
times what I made in the countryside, and I've gained 30 pounds
since I started working here."
The labor force is extremely fluid, bid from factory to
factory at ever higher wages. If a worker doesn't like the terms,
he goes elsewhere. The owners try to make their working
conditions better to attract the best employees. As workers and
factories becomes more productive, they command a higher wage.
Already, wages are on the rise in Honduras.
The denunciation of child labor assumes people in Honduras
have the option of keeping their children fed and idle for 18
years. But this is fantasy. As Wendy Diaz herself said, she
worked long hours to provide food and clothing for her two
younger brothers, who might otherwise have starved.
Late in the day, she even urged the U.S. not to cut off trade,
for fear the factories would have to shut down and her friends
would be forced into prostitution. But the damage was already
done: frightened by the U.S. media campaign, the factory started
laying off workers under 16 and stopped hiring employees.
The issue of child labor is hardly new. In 1802, the British
Parliament passed the first law against child labor in factories.
It was the beginning of a legislative process that continues well
into this century. Historians usually portray anti-child labor
crusaders as humanitarians. On the contrary, they succeeded only
in cutting off economic opportunity, and making children less
valuable to their parents.
The pre-factory age was not a time of happy, contented kids.
>From 1730 to 1740, 75 percent of children in England died before
age five. From 1810 to 1829, supposedly the evil age of the
factory, infant mortality fell to 32 percent and would continue
to drop. Capitalism and the industrial revolution gave youngsters
a chance to survive.
Nassau Senior, one of the great British economists of the
mid-1800s, noted that most of the agitation for the anti-child
labor Factory Acts came not from humanitarians, but from
organizations of adults who wanted more textile work for
themselves. "They got up therefore a frightful, and (as far as we
have heard and seen) an utterly unfounded picture of the ill
treatment of the children," Senior wrote.
So it is today. American labor unions and their allies paint a
horrific picture. And they offer a theory of economics to back it
up: by purchasing products made by exploited youngsters, American
consumers are forcing them into a living Hell. Stop buying the
products, make them in the U.S. instead, and the children will be
free to go to play and go to school.
Factory owners in Bangladesh once faced international
sanctions unless they stopped using child labor. Oxfam, the
British charity, reported that the factory laid off 30,000 child
workers. The children then took more dangerous jobs, with
thousands becoming prostitutes or starving.
Like their English counterparts of 150 years ago, the unions
who pinned Ms. Gifford to the wall have a dark, hidden agenda.
Their goal is not to help children; it is to cut off imports, rip
off American consumers, and pad their own wages at everyone
else's expense. They have no plans for dealing with the problems
of Honduras's children after they've been sent packing. As a
union official told the New York Times, "I'm not an
Ironically, when we hear accusations of child labor in
Honduras, Pakistan, Bangladesh, it's a sign these country is on
the right track. It's suggests they are becoming competitive with
monopolistic unions here. But instead of competing fair and
square, the unions turn to protectionist politics and media
The best way to improve the lot of third-world children is not
to boycott but to buy the products of their labors. It is the old
Kathie Lee Gifford, not the new and improved one, who is the real
* * * * *
William Anderson teaches economics at North Greenville College