Child Labour in the Developed Countries IV. - Current Situation

In this paper we consider developed countries the member states of the European Union and the OECD. It makes totally 34 countries (the EU-28 and Australia, Canada, Korea, New-Zeeland, Turkey and the USA). Obviously, not all of the EU members are joined to the OECD as well, whereas some OECD country exists without EU membership.

The mainstream public opinion would say there is no point to deal with child labour concerning these countries since this issue has marginal significance and obviously it is worth much better to cater for the developing world. We do think it differently. Even if developed countries’ figures are seemed to be irrelevant in comparison with those from converging and emerging states, some good reasons are to be mentioned on the other hand.

First of all, the well developed and industralized states must act a role model in the eyes of the rest of the world therefore any alteration from the benchmark can hardly be acceptable. A further reason, that the IPEC itself is highly optimistic about the total elimination and where else would be more self-evident to achieve this ambition than in the economically best situated countries. And finally, the seriousness of the topic may give an explanation as well since even one child within deplorable conditions shall be too much, consequently, we are supposed to be strict with the developed world.

The EU and the USA has introduced provisions on a new Generalised System of Preferences, banning – among others – the import of products from industries using child labour. The question is what kind of actions are to be taken to avoid child labour in the internal markets.

In 2004 the total number of children were 1566 million in which 218 million was working, so the 14 % of total children. This number shows a slight decrease compare to 2000’s data since the percentage was 16 % - 245 million working children from totally 1531 million. In accordance with the geographical distribution, the figures represent a strongly unequal share between continents. Asia takes responsability for almost the two-third of child workers while the second biggest chunk is belonged from Africa. The reasons of the overrepresentation of the two said continents are quite obvious, the relative underdevelopment and the vast proportion of the world’s children. One would say that the developed countries’ role is deemed to be marginal but the 1 % share means more than 2 million children at work.

Understanding the above number it is striking how developed countries are negligent about the problem. In New Zeeland for example there are not any relevant statistics about but child labour is certainly exists since there is annually one child victim in work related accidents in this roughly 3.6 million’s country.

Recent surveys show there is a strong correlation between child labour and child poverty and lack of education. In the industrialized countries 3,7 % of school age children are out of school. It means 2.6 million children in other words approximately equal with the number of working children in these countries.Parental unemployment constitutes another aspect of disadvantages which could lead to child labour. Children who are growing up in a family in which one or both parents are unemployed very often are supposed to contribute family income. A derivated cross-effect that men unemployment is negatively correlate with marital stability which can also impact children’s well-being.And not to underestimate to role of social exlusion. Ethnic minorities like gypsies in Europe, aborigines in Australia, maories in New Zeeland, inuits in Canada, natives, african-americans and latinos in the United States are specially vulnerable by child labour as they are out of the scope. The situation is similar with migrants, among which child laborers are well overrepresented.

The alteration amongst the developed countries concerning child labour is significant. Taken into account the ratio between the total number of children and working children, Romania and Bulgaria are legging behind the others. In these countries ethnic minorities are particularly involved in child labour, especially in remote, agricultural territories. Child trafficking constitutes a major problem also and Romania „exported”many  child street vendors and beggars through Europe. In absolute numbers the USA considers the worst example. In the USA 16 % of children live below the poverty line and only in agriculture we can find more than 200.000 child workers. As we expected, among the „old” EU members the highest rates are in Spain, Portugal and (Southern-) Italy. In Spain and Portugal child poverty and consequently child labour have remained on the same level despite of the economic boom of the ’90’s and 2000’s. It proves that concerning child labour is not only money matters but other, mainly cultural factors. That is why this tackle is harder than simply compress the inequalality gap.

Furthermore, it constitutes a huge problem that companies and citizens of the developed countries „export” child labour to the emerging states. Due to the Generalised System of Preferences, the situation has become better in business life but amongst private persons sex tourism to third countries is still a significant troublesome phenomenon.

Concerning the partition among the sectors, similarly to the developing world the agriculture represents the major ground for child labour. Child workers plant and harvest crops, spray pesticides and tend livestock very often from sun up to sun down. Surprisingly enough, agriculture is deemed to be one of the three most dangerous sectors along with construction and mining. The major defavorable circumstances which facilitate child labour are the remoteness of the rural territories, the lack of the schools and the traditionally underregulated agricultural sector.

Subject to the share of various sectors in which child labour exists, apart from agriculture which role is considered as the strongest one, we can see serious differences between developed countries and the rest of the world. While in the emerging and converging countries mines, ceramics and glass factory work, matches and firework industry, deep sea fishing and slavery are just a few examples of the several grounds of child labour, in the developed countries domestic works, street vendors and beggars and unfortunately child prostitution and pornography and the related trafficking activities are the main responsible factors for child labour.

From the differences it is obvious that whereas in the developing countries child labour on the one hand is an integral part of the (informal) economy, though on the other hand is changeable with other workforce. By contrast in the developed world child labour is mainly related to illegal activities therefore the total annulation will be extremely difficult and full of challenges.

To be continued.

A previous version of the whole study can be found here

Internship Programs Under The Fair Labor Standards Act

A few days ago we published an opinion about unpaid internships. The present post shows US Department of Labor's non-official point of view concerning “for-profit” private sector employers.

Background

The Fair Labor Standards Act (FLSA) defines the term “employ” very broadly as including to “suffer or permit to work.”  Covered and non-exempt individuals who are “suffered or permitted” to work must be compensated under the law for the services they perform for an employer.  Internships in the “for-profit” private sector will most often be viewed as employment, unless the test described below relating to trainees is met.  Interns in the “for-profit” private sector who qualify as employees rather than trainees typically must be paid at least the minimum wage and overtime compensation for hours worked over forty in a workweek.

The Test For Unpaid Interns

There are some circumstances under which individuals who participate in “for-profit” private sector internships or training programs may do so without compensation.  The Supreme Court has held that the term "suffer or permit to work" cannot be interpreted so as to make a person whose work serves only his or her own interest an employee of another who provides aid or instruction.  This may apply to interns who receive training for their own educational benefit if the training meets certain criteria.  The determination of whether an internship or training program meets this exclusion depends upon all of the facts and circumstances of each such program.

The following six criteria must be applied when making this determination:

1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
2. The internship experience is for the benefit of the intern;
3. The intern does not displace regular employees, but works under close supervision of existing staff;
4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

If all of the factors listed above are met, an employment relationship does not exist under the FLSA, and the Act’s minimum wage and overtime provisions do not apply to the intern.  This exclusion from the definition of employment is necessarily quite narrow because the FLSA’s definition of “employ” is very broad.  Some of the most commonly discussed factors for “for-profit” private sector internship programs are considered below.

Similar To An Education Environment And The Primary Beneficiary Of The Activity

In general, the more an internship program is structured around a classroom or academic experience as opposed to the employer’s actual operations, the more likely the internship will be viewed as an extension of the individual’s educational experience (this often occurs where a college or university exercises oversight over the internship program and provides educational credit).  The more the internship provides the individual with skills that can be used in multiple employment settings, as opposed to skills particular to one employer’s operation, the more likely the intern would be viewed as receiving training.  Under these circumstances the intern does not perform the routine work of the business on a regular and recurring basis, and the business is not dependent upon the work of the intern.  On the other hand, if the interns are engaged in the operations of the employer or are performing productive work (for example, filing, performing other clerical work, or assisting customers), then the fact that they may be receiving some benefits in the form of a new skill or improved work habits will not exclude them from the FLSA’s minimum wage and overtime requirements because the employer benefits from the interns’ work.

Displacement And Supervision Issues

If an employer uses interns as substitutes for regular workers or to augment its existing workforce during specific time periods, these interns should be paid at least the minimum wage and overtime compensation for hours worked over forty in a workweek.  If the employer would have hired additional employees or required existing staff to work additional hours had the interns not performed the work, then the interns will be viewed as employees and entitled compensation under the FLSA.  Conversely, if the employer is providing job shadowing opportunities that allow an intern to learn certain functions under the close and constant supervision of regular employees, but the intern performs no or minimal work, the activity is more likely to be viewed as a bona fide education experience.  On the other hand, if the intern receives the same level of supervision as the employer’s regular workforce, this would suggest an employment relationship, rather than training.

Job Entitlement

The internship should be of a fixed duration, established prior to the outset of the internship.  Further, unpaid internships generally should not be used by the employer as a trial period for individuals seeking employment at the conclusion of the internship period.  If an intern is placed with the employer for a trial period with the expectation that he or she will then be hired on a permanent basis, that individual generally would be considered an employee under the FLSA.

Goldman Sachs Hit by Lurid Allegations of Sex Discrimination

The Wall Street bank Goldman Sachs has been hit with a sexual discrimination lawsuit from three former female employees who claim the firm has a testosterone-driven culture of press-up contests on the trading floor, male-dominated golf outings and scantily clad escorts at an office Christmas party.

Filed in New York's federal court, the suit alleges that Goldman's decentralised structure gives broad discretion to managers in assigning pay, responsibility and advancement to employees.

"Goldman Sachs gives its managers, the overwhelming majority of whom are men, unchecked discretion to assign responsibilities, accounts and projects to their subordinates," says the complaint.

"The end result is that managers, whether based on conscious or unexamined bias, most often assign the most lucrative and promising opportunities, and 'seats', to men."

The plaintiffs are Cristina Chen-Oster, a former vice-president in bond sales who worked for Goldman for eight years until 2005; Lisa Parisi, who was in asset management from 2001 to 2008; and Shanna Orlich, an analyst from 2007 to 2008 who alleges she was denied opportunities to become a trader.

Their law firm, an aggressive specialist in class actions, which is also suing BP over its oil spill and Toyota over sticking accelerators, has set up a Goldman-targeted website and is urging other former employees to come forward.

The suit points out that the representation of women gets worse higher up the ranks at Goldman – 29% of its vice-presidents in 2009 were female but women made up only 17% of managing directors, 14% of partners and just four members of a 30-person top management committee.

The latest legal skirmish comes at an awkward time for Goldman, which recently paid $550m (£352m) to settle fraud charges brought by the securities and exchange commission. The bank is the subject of a congressional investigation over alleged unethical conduct in mis-marketing mortgage securities in the run-up to the credit crunch and is struggling to improve its public image.

Allegations in the lawsuit centre on Goldman's "black box" compensation structure, in which employees are given little explanation for variances in their pay, and the plaintiffs describe fierce competition for intangible benefits such as prime seating positions in trading rooms.

"Women at Goldman Sachs are often asked to take on responsibility for training junior employees but then penalised for diverting their attention away from generating revenues for the firm," says the complaint.

The trio make lurid allegations about specific incidents. Chen-Oster, who was paid $800,000 a year but claims her male counterparts earned twice as much, says a male colleague pinned her against a wall, "kissing and groping her" after a Goldman-sponsored staff night out at a topless bar.

Orlich claims she was excluded from golf outings, and recounts displays of "masculinity" including a push-up contest on the trading floor. And she asserts that a 2007 Christmas party for a sales team featured female escorts "wearing short black skirts, strapless tops and Santa hats".

A Goldman spokesman said: "We believe this suit is without merit. People are critical to our business, and we make extraordinary efforts to recruit, develop and retain outstanding women professionals."

Goldman insiders are likely to view the suit as an opportunistic attempt to cash in on the bank's dismal public image. The firm has been targeted by scores of recent legal assaults, including a case brought by the International Brotherhood of Electrical Workers, which complains bankers' bonuses are too high, and a stream of shareholder lawsuits over its alleged mis-selling of mortgage bonds.

Gender discrimination cases against investment banks are nothing new. In London, two former Nomura bankers lost a £3m case against the Japanese firm in April, despite claiming they were taunted by male colleagues who suggested they should be "cleaning floors".

The Equality and Human Rights Commission found last year that women working full-time in the financial sector earn 55% less, on average, than men. And the Treasury select committee has expressed concern that only 9% of board members at FTSE 100 banks are women.

(Andrew Clark, guardian.co.uk)