The United States government makes much of the use (and abuse) of child labour, especially in Third World countries. We often read much about the threat to ban carpets from Kashmir and footballs from Sialkot, Pakistan, as these sectors employ child labour. The US government, all too frequently, invokes the fearsome mantra of sanctions to bring to heel what it perceives as dissident or rogue states which do not fall in line with American interests and policies. 

However, the world’s remaining Superpower itself is no stranger to child labour and a comprehensive study, for the first time ever, reveals embarrassing statistics. 

The study, called the Rutgers Report, estimates that there are 148,000 American minors employed illegally in an average week while 290,000 youngsters are hired illegally at some point during the year. 

Among these youngsters, 10 percent of 15-year-olds work in blatant violation of child labour laws. They are paid less than minimum wages for working in hazardous and taxing jobs. 

American child labourers, apart from working in the agriculture sector, where laws are less stringent, are also employed in sweatshops related to the apparel, restaurant and meat-processing industries. 

According to guesstimates, thanks to such illegal child labour, employers save some $155 million annually. 

For more details, please go to Illegal Child Labour in the United States: Prevalence and Characteristics. 
 

Introduction:   
 
In recent years, there has been substantial concern about the extent of illegal child labor in the U.S. and its effects on the health and development of children.  While child labor has been a long-standing policy concern, there are no comprehensive data on the extent to which children work in violation of child labor laws.  The total number of illegally employed minors detected by the Department of Labor’s Wage and Hour Division went from 9,243 in 1983 to 27,528 in 1991, but there is no reliable way to determine what share this represents of all illegally employed minors (U.S.General Accounting Office, GAO,1992),   while there has been one prior study of illegal employment among 15-year-olds (U.S. GAO, 1991), there have been no estimates of illegal child employment across all ages.  This report therefore uses a variety of datasets to analyse the extent of illegal employment of children and adolescents in the United States.  

Data Sources and Limitations: 

The main data source used in this study is the Current Population Survey (CPS), which is a survey of roughly 60,000 households done each month by the Census Bureau and the Bureau of Labor Statistics.  The CPS currently  asks employment questions for those aged 15 and older, including hours and occupation questions that can be used to done whether the minors appear to be working in violation of federal and state laws.  Because there are only about 6,000 15 to 17 year olds in month’s sample, this study combines data from 33 monthly surveys covering January 1995 to September 1997 to create a large sample of over 186,000 15 to 17 year olds.  

Estimates of illegal employment from the CPS are primarily based on questions about occupation and usual hours worked.  Federal law restricts work in 17 hazardous occupations for those under age 18, and further restricts the type and location of work for those under 16.  These restrictions were matched to CPS occupation codes (with the restrictions and matched codes listed in Appendix A) to determine which individuals appear to be engaged in illegal work.  Federal law also restricts 14 and 15 year olds to no more than 18 hours of work during a school week and 40 hours of work during a non-school week; therefore those reporting a job during school months (January-May and September-December) are coded as working illegally if their usual hours worked exceeds 18, and those reporting a job during summer months(June-August) are coded as working illegally if their usual hours worked exceeds 40.  Because the FLSA(Fair Labor Standards Act) does not apply to (although occupation restrictions do apply) to jobs in a family business, adjustments are made to ensure that these jobs are not counted as illegal work.   The FLSA aslo does not cover most small businesses not engaged in interstate commerce, which employ about one-eighth of all workers, but those workers are generally covered by state laws (many of which apply federal or higher standards).  For this study, those state restrictions (obtained from state Web sites and Research Institute of America, 1996) are coded and applied to youths in those states, so that the numbers presented here include any minors working in violation of state or federal child labor laws.  

APPENDIX  A 

CODING OF HAZARDOUS OCCUPATIONS 

The Fair Labour Standards Act (FLSA) restricts hours of employment for those aged 14 and 15 to no more than 18 hours in a school week and 40 hours in a non-school week. In addition, it restricts work in 17 hazardous occupations for those aged 17 or under, with additional restrictions for those aged 15 or under. The restricted occupations, and the CPS codes used to identify them for this 
study, are as follows respectively: 

Restricted for under-17s: 

1. Manufacture or storage of explosives - none 
2. Motor vehicle operations - 802-812, 814, 843-859 
3. Coal mining - 613-617 
4. Logging and saw-milling - 494-496 
5. Power-driven woodworking machine operation - 726-733 
6. Exposure to radioactive substance - none 
7. Power-driven hoisting apparatus operation - 848-849 
8. Power-driven metal machine operation - 03-725, 628-655 
9. Mining other than coal covered in section 3 
10. Meat packing/slaughtering - 86 
11. Power-driven bakery machine operation - 63 
12. Power-driven paper products machine operation - 34 
13. Manufacture of brick, tile, or kindred products - none 
14. Power-driven saw or shears operation - 726-728, 769 
15. Wrecking, demolition, and ship-breaking - none 
16. Roofing operations - 595 
17. Excavation operations - none   

Restricted for 14-and 15 years - olds: 

1. Any manufacturing occupation - 628-655, 703-799 
2. Any mining occupation - 613-617 
3. Food processing, and laundering occupations - 748 
4. Any work in workrooms or workplaces where goods are manufactured, minded or processed – none-25 
5. Public messenger service - 355(26) 
6. Operation or tending or power-driven machinery (except office and other specified machines) - 848-849 
7. Any of the 17 hazardous occupations above 
8. Operations in connection with 553-577,584-599, transportation, warehousing, 823-834,866-874, communications and construction (except office or sales work not in direct contact with transportation media or construction site) 
9. Specific occupations in retail, food, 505-519,769, gasoline service establishments (including operation of slicing machines and car repair work) 

Footnotes 

• Other than the occupations involving operation of manufacturing/processing machines or work in mining (covered above), no occupations specifically identify work performed where the employee is in close physical proximity to manufacturing, mining, or processing. 

  Messengers are identified by CPS code 357, but these are not coded as necessarily illegal because it includes a potentially large number of private (in-house) messengers. 

To obtain estimates of illegal employment for those under 15, an imputation is made based on several other datasets.  Legal and illegal employment of 14-year-olds is imputed based on 1980’s data from the CPS (since employment questions were asked of 14-year-olds until 1989), and from two National Longitudinal Survey (NLS) datasets-the NLS-Youth and NLS-Adolescent Health dataset and several sources on work-related injuries and deaths broken down by age. 

There are several limitations in using the CPS and other survey data to detect illegal employment.  The first is that survey respondents are unlikely to report to an interviewer any behavior that they known to be illegal.  While it is safe to say that most people are aware that child labor laws exist, the extent of knowledge about the provisions of those laws is unclear.  Employers are held responsible for obeying child labor laws, but minors and parents are generally not responsible and therefore under no obligation to be aware of the laws.  

A second important limitation of survey data is that existing surveys do not contain enough detailed data to clearly establish in many cases whether employment is legal or illegal.  None of the surveys used here have data on the specific hours worked during a day, which would help determine whether some children are working during school hours or late into the night (both prohibited by child labor laws).  The coding of occupational categories can also leave rule for doubt over whether the actual work being done is proscribed of some one of that age.  

Finally, a limitation of survey data is the potential for measurement error, both from respondent reports and interviewer coding.  To the extent that measurement error exists, it will not necessarily understate or overstate the extent of illegal employment. 

Executive Summary: 

This study provides the first comprehensive estimates of children and youth working under conditions that violate federal and state child labour laws in the United States of America.  Using a variety of sources with employment-related data on children and youths, some of the main findings are that: 

• An estimated 148,000 minors are employed illegally in an average week --working too many hours or in hazardous occupations -- and 290,000 are employed illegally at some point during a year. 
• Of the youth who are employed, one-tenth (10.6%) of 15-year-olds are working in violation of child labour laws, compared to 1.6% of 16 and 17-year-olds, who have fewer legal restrictions. 
• The total number of hours worked illegally is about 113 million per year, for which these minors are paid over $560 million. 
• Male white youths living in the Midwest, West, and non-metropolitan areas are the most likely to be working in violation of child labour laws. 
• Youths working illegally in hazardous jobs earn on average $1.38 per hour less than legal young adults in the same occupations. This factor, combined with the savings from employing under-aged youths for excessive hours rather than young adults, adds up to a total employer cost savings from illegal child labour of roughly $155 million per year. 

The large number of minors found to be working illegally in an average week raises important policy concerns about the health and the well-being of these youths.  This study also adds weight to recent recommendations of the NIOSH Child Labour Working Team concerning the development of high-quality employment data on children and youths, to improve estimates of illegal employment and study of its effects. 

The estimates for average weekly employment for 15-17 year olds are based on 1995-97 CPS data, presented in greater detail in Appendix Table A-1. 
 
PROBLEMS FACING ACCURATE SURVEYING 

Child labour laws for agricultural employment are much less stringent than for non-agricultural employment. The most important restrictions are that, with some exceptions, children under age 16 who do not work on their family’s farm are not permitted to operate power-driven machinery or to work with certain pesticides. 

Children employed in “sweatshops” -- defined as businesses that regularly violate laws regarding safety and health, wages or child labour -- may not be fully accounted for in the survey data, leading to an underestimate of the overall number employed illegally in sweatshops. These sweatshops are thought to be concentrated in the apparel, restaurant and meat processing industries (US GAO, 1990a). 

Arriving at estimates of employees, particularly children, in sweatshops is complicated by problems in inspection (not enough inspectors, even fewer bilingual inspectors) and the small size of many sweatshops.  

The other two industries in which sweatshops are thought to be a problem are the meat processing and restaurant sectors.  Legal and illegal immigrants constitute the primary workforce for hazardous jobs that may often violate labour laws, particularly in meat processing.  

Surveys may also undercount illegal home-based work, in which employees who do work at home may have their children do some of the work. No good estimates exist on the extent of this problem. 

Table 2 provides demographic breakdown of legal and illegal employment for 15- to 17-year-olds, and compares those rates to the younger and older adult populations 

COST SAVINGS FOR EMPLOYERS 

How much, if anything, do employers save by employing minors illegally?  It is very difficult to derive an adequate answer to this, primarily because little is known about what types of workers would be employed in the absence of the 
illegally-employed minors. It is likely that the nature of the substitution depends on the type of illegal employment. Youths in hazardous occupations are substituting for adults, while the excessive hours worked by 14- and 15-year-olds may be substituting for work hours of adults or of legally-employed youths. 

This study estimates the cost savings by separately comparing youths working in hazardous jobs, and those working too many hours in non-hazardous jobs, to young adults (age 18-24) without high school degrees who work in the same occupations. 

Applied to the total hour figures, the cost savings from all illegal employment of youths is about $3 million per week, or $155 million per year.  Combined with the estimate that youths working illegally are earning about $566 million per year (Table 1), this indicates that legally-employed 15- to 24-year-olds would be earning about $721 million in those same jobs. 
 

Illegal employment, as shown in Table 4, appears to have been slightly more prevalent in the 1970s than in the ’80s and ’90s. The comparison between the 1970s and later numbers may be contaminated by changes in the occupational coding scheme in 1983, possibly affecting the hazardous occupation numbers. There was, however, no noticeable break in hazardous occupation prevalence between 1982 and 1983, and the change in illegal employment between the 1970s and 1980s was greater in illegal hours worked, so the change in coding scheme cannot account for the overall downward trend in illegal employment.        
  
CONCLUSION 

This report seeks to provide comprehensive estimates of the likely extent of illegal child labour in the United States, along with indications of its relationship to demographic and job characteristics.  Lacking high-quality data on employment of children, it has drawn on several data sources to impute illegal employment.  The overall estimate is that about 148,000 children and youths work in violation of federal or state labour laws in an average week. 

This high number is a valid policy concern, given many of the documented hazards and deleterious effects that working excessive hours or in unsafe conditions can have on children (Landrigan et al., 1995, NIOSH, 1997). It is roughly five times the number of violations detected by the federal Wage and Hour Division in a year.  

Given this high number, another lesson from this study is that there is a strong case for developing better data regarding employment of children, in order to document legal and illegal child labour and study both the good and bad effects that they can have. 

One of the recommendations of the recent report of the NIOSH Child Labour Working Team is that NIOSH “should encourage BLS to conduct surveys and report data in a form that provides information about young workers”, including workers who are under 15 (NIOSH, 1997:42). The new National Longitudinal Survey of Youth is one venue where employment questions could profitably be added, going beyond hours and occupation questions to identify other ways in which youths may be working under illegal conditions. 
 
 
APPENDIX B 
  
Comparison to the GAO study of 15-year-olds 

The only other recent systematic attempt to estimate illegal child labour is reported in US GAO (1991), where it was estimated that 166,000 15-year-olds were illegally employed in 1988. This figure is substantially different from this study's estimate (Table A-1) that 47,400 15-year-olds are illegally employed in an average week in 1995-97. This Appendix discusses the difference between these numbers, based upon an analysis of the March 1989 CPS dataset that re-creates the GAO estimates and decomposes the difference from this study's estimates. 

One of the key differences between the two estimates is that the GAO number reflects illegal employment at any point during the year, rather than during an average week. As done here with the March 1997 CPS for employment throughout 1996, the GAO study used the retrospective questions from March1989 in which respondents reported on any employment that took place during 1988. When those retrospective data are adjusted to reflect illegal employment in an average week in 1988 (by weighing the data by the proportion of reported weeks worked in 1988), the GAO estimate of 166,000 is reduced to 86,800, or by almost half. 

Both numbers - those illegally employed in an average week and those illegally employed at any point during a year – are meaningful measures of illegal employment, and are included in Table 1. Even according for the difference in type of measure, however, the derived GAO estimate of 86,800 15-year-olds illegally employed in an average week is almost twice as high as this study's estimate. The remaining discrepancy is accounted for by methodological differences in defining apparent illegal employment. Those differences, and their relative importance, are: 

1. The GAO estimate overlooks illegal employment in several important industries. It counted 15-years-olds as working illegally if their principal job was in a firm in the manufacturing, construction, mining, public utilities, communication or transportation industries. As that study notes (1991: 41), this will overlook those working illegally because non-manufacturing and non-mining occupations within manufacturing and mining firms are legal for 15-year-olds, as are office and sales jobs in the other industries, provided the work is away from transportation equipment and the actual construction site. In contrast, the current study counts illegal employment based on restricted occupations rather than industries. When this study's codes are used to re-classify 1988 employment, 55,100 is subtracted from the GAO's estimate of 166,000 illegally employed in a year, and 38,100 is subtracted from the derived GAO estimate of 86,800 illegally employed in an average week. 

2. The GAO estimate overlooks illegal employment by including youths who are self-employed or working for family businesses. The former are not covered by the FLSA (which applies to employers), while youths working for family businesses are covered by the hazardous occupation restrictions but not by hours restrictions. While adjustments are made, 9,500 is substracted from the figure. 

3. The GAO estimate potentially does not include hours violations with its procedure for imputing hours violations during the school year. The March CPS asks respondents for the number of weeks worked and the usual hours worked during those weeks. The GAO study counts youths as employed illegally if reported more than 40 hours usually worked per week since that is not allowed at any time of the year for 15-year-olds. It also counts youths as employed illegally if they reported more than 18 hours usually worked per week and 16 or more weeks worked last year, since those working that many weeks would have worked some during the school year. A problem is that youths may not have worked more than 18 hours during a school week but still reported “usually” working more than 18 hours since that was the summer schedule. If one excludes those youths who report usually working 19-39 hours for 32 or fewer weeks (since half or more of those weeks were probably worked during non-school weeks, leading the respondent to refer to non-school weeks for “usual” hours), 43,200 is subtracted from the GAO's estimate of 166,000 illegally employed in a year, and 20,600 is subtracted from the derived GAO estimate of 86,800 illegally employed in an average week. 

When the adjustments for potential overlooks described in 1-3 above are combined (eliminating overlap), the result is that 74,300 15-years-olds are estimated to have been employed in violation of federal law at some point in 1988, and 36,200 in an average week. This estimate does not include those employed in violation of state laws, most of which apply federal or higher standards. When the latter number is adjusted upward to include all those working in apparent violation of federal or state laws in an average week, the estimate becomes 41,200. While one would not expect this number to exactly match the 1995-97 estimate of 47,400 employed illegally in an average week (due to time differences and problems in comparing retrospective and current measures), the numbers are clearly of the same magnitude, indicating that this anomaly has accounted for the major differences between the GAO estimate and this study's estimate. 

In sum, the difference between the two estimates can be traced both to differences in data presentation (illegal employment in an average week vs. at any point during a year) and in how illegal employment was coded. The coding differences are clearly important, since the elimination of apparent discrepancy in the GAO study reduces that estimate by about half. While the methods in this study were used in order to produce the most accurate estimates, there clearly remain a number of ways in which the survey-based data can undercount illegal youth employment (discussed both here and in GAO, 1991). 

While some further knowledge may be gained bby using different methods an assumptions on existing datasets, a more important project is to generate new high-quality data on youth employment.  

Footnotes 

• The exceptions are that the agricultural industry is excluded from the CPS estimates, and several industry codes are used to denote illegal employment for minors under state laws (generally based on whether the business sells or serves alcohol) subtracted from the GAO's estimate of 166,000 illegally employed in a year, and 4,700 is subtracted from the derived GAO estimate of 86,800 illegally employed in an average week. 
   
  This and the other estimates reported in this Appendix have been adjusted to reflect FLSA coverage using the ratio from the GAO study.

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