Child Labor in America and the Supply Chain Crisis

Child Labor in an American Factory

From Amazon to Everlane, shipping delays have become the norm since the pandemic created a supply chain crisis. Farmers, factory workers, and shipping agencies went into lockdown just as global demand for e-commerce skyrocketed. In response, domestic production is looking like an attractive alternative. But recent discoveries of child labor in America have complicated the issue.

In this article, we’re discussing what led to the current supply chain crisis, child labor abuses, and whether American manufacturing is a good idea.

Table of Contents

The Supply Chain Crisis

Since the pandemic began, you’ve probably noticed the local effects of the international supply chain crisis. In addition to delays to online orders, consumer products are often out of stock. International ports are jammed and goods take longer to arrive in the United States.

This has happened for a variety of reasons. Geopolitical issues, such as the U.S.-China trade war in 2018 and 2019, have created roadblocks for companies relying on China for manufacturing. 

The trade war began when Trump imposed tariffs, which are taxes on goods coming into the United States, on $350 billion of Chinese imports. Trump was concerned with a large trade gap between China and the United States. In response, China levied tariffs on $100 billion of American exports.

Because of the trade war, imports from China were declining by the beginning of 2020. As a result, the shipping industry began to streamline operations and reduce its total capacity.

Then, the pandemic spread across the world, and international governments imposed widespread pandemic lockdowns which disrupted factories and halted manufacturing. In addition to causing unbearable suffering for low-wage workers, Covid shutdowns in the garment sector (and every other consumer industry) brought supply chain issues to a head.

These shutdowns shrunk supply chain capacity at the same time that demand for goods was increasing. And the newly reduced shipping industry couldn’t keep up. High demand and low supply meant that freight and shipping costs skyrocketed.

Importing goods was no longer a reasonable financial decision for thousands of businesses.

A Move to American Manufacturing

Interestingly, this has led to a movement among American businesses praised by some ethical manufacturing advocates. More and more production is being moved back to the United States.

At first the move from mostly Asian suppliers to domestic suppliers for manufacturing seemed temporary. Companies scrambled to find domestic suppliers until the international supply chain issues subsided.

But now that we know that these issues are not likely to clear up anytime soon, many companies are considering a permanent move to U.S. production.

Advantages of U.S. Manufacturing

There are advantages to moving manufacturing onto US soil beyond avoiding the mess of shipping products long distances to the United States through jammed-up ports.

Bi-partisan advocates argue that more localized production protects Americans by ensuring that we have access to needed goods in an unstable global economy.

Domestic manufacturing also avoids the value added taxes (VAT) levied on products by almost every country except the United States. Domestic manufacturing also avoids U.S. tariffs.

And, as previously stated, manufacturing in the U.S. avoids the extraordinary costs associated with shipping imported goods from the other side of the world.

Abuses in U.S. Manufacturing

Domestic manufacturing has an additional advantage. It means that manufacturers are subject to stricter labor laws and more consistent enforcement of these laws.

But as we know from recent proposals like the FABRIC Act, factories in the United States do have abuses that slip through the cracks.

For example, this year a Hyundai supplier was accused of employing child labor in an Alabama factory. At least 50 underage workers as young as 12 were employed in a metal stamping plant.

Reuters, who first reported on the child labor at the Hyundai supplier, discovered the abuses while investigating the brief disappearance of a 13-year-old Guatemalan migrant child from her home. The child and her two brothers, aged 12 and 15, all worked at the plant and did not attend school.

The story highlights a growing concern that children are being used to fill labor gaps in the United States since the Covid pandemic. In 2021, the U.S. Department of Labor’s Wage and Hour Division reported discovering 2,819 minors employed.

The concern isn’t about older children working limited hours in safe conditions. Often, children are working long hours and being put at risk by working with toxic chemicals and dangerous equipment. They often work in risky and labor-intensive industries such as agriculture, construction, food service, and meat packing.

It should be stated that the children involved in abusive labor are often undocumented migrants. These children, who are fleeing violence in Central and South America, often enter the U.S. without a parent or guardian.

Companies like the one contracted with Hyundai take advantage of the vulnerability of migrants and refugees for their own financial gain. And, because migrant children and their families often pay a smuggler to get them past America’s inhumane immigration policies, they are forced to work to pay off their debt.

In some cases, however, exploitative child employment practices are legal in the United States. In some states, children as young as 12 can work unlimited hours on farms as long as they are going to school.

Is Made in America the Answer?

In spite of abuses, domestic manufacturing does have some ethical advantages. U.S. labor laws are stricter and more consistently applied. And production close to home means that companies can more easily audit for violations.

Unfortunately, it will not prevent sometimes widespread labor abuses from happening. Recent child labor in the Hyundai supply chain is just one example.

American production can be a good thing. In the face of ongoing supply chain issues, it ensures a more timely and less expensive production and shipping timeline.

It also puts some of the responsibility back into the hands of American businesses. It’s hard to claim you didn’t know abuses are happening when they’re in your own backyard.

And, as American consumers and workers continue to demand better treatment, domestic manufacturing could mean real improvements for factory workers.

On a policy level, we ought to support closing loopholes in U.S. law that allow for worker exploitation, such as loopholes in child labor law. We should encourage strict labor law enforcement and support companies who closely monitor their supply chains for labor abuses voluntarily. And we should support compassionate immigration policies that don’t push vulnerable people into the shadows of our economy.

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