Power and Market: Government and the Economy

Child labor laws are a clear-cut example of restrictions placed on the employment of some labor for the benefit of restrictive wage rates for the remaining workers. In an era of much discussion about the “unemployment problem,” many of those who worry about unemployment also advocate child labor laws, which coercively prevent the employment of a whole body of workers. Child labor laws, then, amount to compulsory unemployment. Compulsory unemployment, of course, reduces the general supply of labor and raises wage rates restrictively as the connexity of the labor market diffuses the effects throughout the market. Not only is the child prevented from laboring, but the income of families with children is arbitrarily lowered by the government, and childless families gain at the expense of families with children. Child labor laws penalize families with children because the period of time in which children remain net monetary liabilities to their parents is thereby prolonged.

Child labor laws, by restricting the supply of labor, lower the production of the economy and hence tend to reduce the standard of living of everyone in the society. Furthermore, the laws do not even have the beneficial effect that compulsory birth control might have in reducing population, when it is above the optimum point. For the total population is not reduced (except from the indirect effects of the penalty on children), but the working population is. To reduce the working population while the consuming population remains undiminished is to lower the general standard of living.

Child labor laws may take the form of outright prohibition or of requiring “working papers” and all sorts of red tape before a youngster can be hired, thus partially achieving the same effect. The child labor laws are also bolstered by compulsory school attendance laws. Compelling a child to remain in a State or State-certified school until a certain age has the same effect of prohibiting his employment and preserving adult workers from younger competition. Compulsory attendance, however, goes even further in compelling a child to absorb a certain service—schooling—when he or his parents would prefer otherwise, thus imposing a further loss of utility upon these children.36 ,37

• 36For a brilliant discussion of the anti-child-labor Factory Acts in early nineteenth-century Britain, see Hutt, “The Factory System.” On the merits of child labor, see also D.C. Coleman, “Labour in the English Economy of the Seventeenth Century,” The Economic History Review, April, 1956, p. 286.36
• 37A news item illustrates the connection between child labor laws and restrictionist wage rates for adults—particularly for unions:
  Through the co-operation of some 26,000 grocers, plus trade unions, thousands of teenage boys will get a chance to earn summer spending money, Deputy Police Commission James B. Nolan, president of the Police Athletic League, disclosed yesterday. ... The program was worked out by PAL, with the assistance of Grocer Graphic, a trade newspaper. Raymond Bill, publisher of the trade paper, explained that thousands of groceries can employ one and in some cases two or three boys in odd jobs which do not interfere with union jobs. (New York Daily News, July 19, 1955; italics mine)
  See also Paul Goodman, Compulsory Mis-Education and the Community of Scholars (New York: Vintage Books, 1964), p. 54.