Business Essays - Child Labor in Guatemala


Justification of Child Labor in Guatemala for Safefields

Using a supplier within an impoverished nation will always have complications. Developing nation’s laws are normally not as strictly enforced as first world nations and the majority of human rights violations come from within their societies. The reasons for this is the populations of these countries are normally in positions where they can be exploited as their goals for living standards can be to just survive. Many cases have been seen where this has resulted in the exploitation of children in the work force which at current has resulted in over 16% (over 1.9 million) of children aged five to seventeen are working. Although this is morally wrong in the long run, it can be justified if the right policies are put into place to ensure that the children are being educated for the future while being able to fend off poverty and starvation for the present. This is what Safefield needs to consider when developing a strategy for their plant in Guatemala.

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Analyse the current issue of using a supplier in Guatemala who is using child labor to produce Safefields low cost clothing line and make recommendations.

Effects on Guatemalan Society-

Employing children will always have an adverse affect on their ability to develop into productive members of society. By working a job they will not be able to attend school or if they manage to maintain attendance their ability to learn will be greatly diminished as their responsibilities will be too large for a child to manage. This creates a cycle of an uneducated work force who’s chance to progress their standard of living is hindered. End result is future generations of children need to continue working to fend off poverty and starvation. The goal for any country in this state is to eventually increase the skills and therefore the earning power of it’s populace so that their children will be able to grow up with enough opportunities to develop as any first world nation.

Effects on Guatemalan Economy-

Having an outside organization generating work within an impoverished country will normally have a positive effect on its inhabitants. This is not to say that it is morally right as the organization is still exploiting cheap labor to generate a higher profit margin.  What needs to be done is to establish a free trade of labor agreement between both parties so that the organisations will still gain advantage by operating in developing nations while returning enough into the countries economy to see a positive gain.

Effects on UK society/ consumer relation-

Safefields needs to be aware that even if the managing bodies can shrug off the moral issues of exploiting children for cheap labor, it is becoming more and more obvious that the consumers will not. Global communication with technology such as the internet allows for consumers to be completely educated on a company’s business practices and they have proven that they care. Free trade has become such an issue that it has become a staple for café/ coffee shop franchises to promote it or lose business. Fair labor movements on the other hand is an issue which most of the population knows very little about and businesses are usually condemned before the situations are researched. Safefields could use this movement to not only have a positive effect on a developing nation but gain market share by promoting their actions. End result is a stronger and loyal brand identity with it’s customers.

Effects on Safefield earnings-

On a short term, cheap labor will allow Safefields to generate more profits while being competitive with the expected price wars with ASDA. On a long term Safefield’s will risk damages to their reputation and therefore business as child right’s activists attack their policies and bring it to the public eye.

Legal Implementations-

Poorly regulated manufacturing sites could enable Safefields to be in violations of Guatemala’s child labour laws. Within current legislation it is illegal to employ a child under the age of 14 without a special permit. Currently the attitudes towards child labor within Guatemala is not very strict and these laws are rarely enforced but that will soon change. International actions such as IPEC (International Program on the Elimination of Child Labor) is encouraging nations to adopt stricter enforcement of their laws in return for the implementation of social programs for education which will develop a long term advantage for Guatemala’s progress as a country. Safefields would not want to be involved in a situation like this when the enforcement starts as their actions will become globally known very quickly and the charges could be severe.

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Withdrawing your manufacturing from Guatamala would be costly to both the country and company. A more effective approach would be to implement a new policy structure that would be mutually beneficial. I propose to firstly do an audit on the suppliers current operations to ensure no current laws are being broken then institute an employment package that can help the current situation.  A staple idea that should be incorporated is to pay according to production on a scale which would be similar to the United Kingdom. Savings for the company would continue as living costs within Guetamala is far lower then England but employees should be able to earn enough to support their families. Another initiative that I recommend is to develop an education systems for all the employees to ensure that as they age they will be developing skills which can increase their opportunities in the future. The key for Safefields is to realize that child labor is unfortunately a requirement with the state of Guatemala’s economy. These children work so that their family’s can survive. The best thing that can be done in these situations is to invest in them currently to gain for the future. Employing and educating the youth will give the company a boost to their brand identity, help a developing nation, continue to have cost advantages from operations, and develops a loyal more dedicated work force then you would have in your home country.  The justification of child labor is hard to imagine when comparing the youths of a first world nation to a developing country. For Guatemala to reach a developed country’s living standard it needs either a massive investment from the world governing bodies or an investment must be made from the private sector; Safefields could capitalise on this. If implemented, Safefields will be in a position to gain considerable competitive advantage over ASDA through comparable cost leadership along with having a platform of being socially responsible which ASDA may not be able to contend with.


“Child Labor Issues and Directions for World Bank”World Bank Homepage. 10 March 2005. 11 March 2005.

Bachman, S. L. (2000). The political economy of child labor and its impacts on international business. Business Economics: The Journal of the National Association of Business Economists, 35 (3), 30-42.

Swedish, Margaret Central America/ Mexico Report. 3053 Fourth Street Publishing
(Washington, DC) 13

“U.S. Department of Labor Report”Guatemala Report. 9 March 2005. 11 March 2005.