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01 / 05
Growth Is the Ultimate Weapon in Ending Child Labor

Blog Post | Labor & Employment

Growth Is the Ultimate Weapon in Ending Child Labor

The total number of child laborers fell from 246 million in 2000 to 152 million in 2016.

Children's involvement in Child Labor.

Child labor was once ubiquitous. Take, for example, ancient Rome. As Mary Beard noted in her 2015 book SPQR: A History of Ancient Rome, “Child labour was the norm. It is not a problem, or even a category, that most Romans would have understood. The invention of ‘childhood’ and the regulation of what work ‘children’ could do only came fifteen hundred years later and is still a peculiarly Western preoccupation.” Today, fewer than 10 percent of children worldwide have to work for a living. By and large, those that do, live in poor countries. Economic growth, which was key to eliminating child labor in the developed world, can achieve the same outcome in the developing one.

Prior to the mechanization of agriculture, which increased farm productivity, there were no food surpluses to sustain idle hands – including those of children. “The survival of the family demanded that everybody contributed,” writes Johan Norberg in his 2016 book Progress: Ten Reasons to Look Forward to the Future. As such, “it was common for working-class children to start working from seven years of age … In old tapestries and paintings from at least the medieval period, children are portrayed as an integral part of the household economy.… [with many working] hard in small workshops and in home-based industry,” Norberg continues.

As agricultural productivity increased, people no longer had to stay on the farm and grow their own food. They moved to the cities in search of a better life. At first, living conditions were dire, with many children working in mines and factories. By the middle of the 19th century, however, working conditions started to improve. Economic expansion led to increased competition for labor and wages grew. That, in turn, enabled more parents to forego their children’s labor and send them to school instead.

Between 1851 and 1911, for example, the share of British working boys and girls between the ages of 10 and 14 dropped from 37 and 20 percent respectively to 18 and 10 percent respectively. In the United States, the share of working 10 to 13 year olds fell from 12 percent in 1890 to 2.5 percent in 1930.

In his 2018 book Enlightenment Now: The Case for Reason, Science, Humanism, and Progress, Harvard University professor Steven Pinker recounts how technology helped get boys off the farm and into the classroom. He quotes a tractor advertisement from 1921, “By investing in a Case Tractor and Ground Detour Plow and Harrow outfit now, your boy can get his schooling without interruption, and the Spring work will not suffer by his absence. Keep the boy in school—and let a Case Kerosene Tractor take his place in the field. You’ll never regret either investment.”

While legislation eventually enshrined in law what was already happening in practice and banned child labor, it is crucial to remember that it was only after a critical mass of children were pulled out of the labor force by their parents that people realized that life without child labor was possible. Similar processes are taking place in the rest of the world today.

According to the International Labor Organization’s 2017 Global estimates of child labor: results and trends 2012-2016 report, child laborers as a proportion of all children aged 5 to 17 dropped from 16 percent in 2000 to 9.6 percent in 2016. That year, 19.6 percent of children worked in Africa, 2.9 percent in the Arab states, 4.1 percent in Europe and Central Asia, 5.3 percent in the Americas and 7.4 percent in Asia and the Pacific.

The total number of child laborers fell from 246 million in 2000 to 152 million in 2016. That’s a reduction of 38 percent over a relatively short period of 16 years. In 2016, almost half of child laborers lived in Africa (72.1 million), which is the world’s poorest continent. Over 62 million child laborers lived in the populous Asia and the Pacific region. Some 10.7 million lived in North and South America, 1.2 million lived in the Arab States and 5.5 million lived in Europe and Central Asia.

As was the case throughout human history, agriculture continued to dominate child employment, accounting for 71 percent of child laborers. Services employed 17 percent of child laborers and industry 12 percent. In spite of continued population growth, the International Labor Organization expects that the total number of child laborers will continue to decline, falling to between 121 and 88 million in 2025. As such, the importance of economic growth in developing countries cannot be overstated.

This first appeared in CapX. 

Associated Press | Labor Productivity

Productivity Surge Helps Explain US Economy’s Resilience

“Chronic worker shortages have led many companies to invest in machines to do some of the work they can’t find people to do. They’ve also been training the workers they do have to use advanced technology so they can produce more with less.

The result has been an unexpected productivity boom.”

From Associated Press.

Blog Post | Science & Technology

AI, Tractors, and the Slow Diffusion of Labor-Saving Devices

Productivity and economic growth are a tide that lifts all boats, whether we're talking about agricultural machinery or ChatGPT.

“You can see the computer age everywhere but in the productivity statistics,” wrote economist and Nobel laureate Robert Solow in a 1987 book review. While computing was making massive strides in the 1980s and ’90s—cumulating in the internet mania and dot-com bubble and its burst—it took a long time before we saw large, economy-wide impacts of this revolutionary general-purpose technology. Computers, internet, and (smart) screens have made the modern world unrecognizable from what it was just a few decades ago, but the process took a lot longer than most techno-optimists suggested then—and their followers are suggesting now.

Last year had a strong 1990s feel to it: 2023 became the year of AI worries, with ChatGPT and other large language models making a bid for disrupting all manner of industries. Writers, musicians, lawyers, editors, physicians, graphic designers, and more were some of the professions seemingly at risk of losing their livelihood to machines that quickly replicate their work at a fraction of the cost.

We should draw two conclusions from these large language models and past technological transitions: First, some of their features are truly remarkable and can very well compete with (some) lawyers, writers, musicians, or graphic designers over the next few years. Second, radical, labor-saving technologies are slow to diffuse across the economy, so these mainly middle-class professions are probably safe from mechanization and automation a while longer.

Take the iconic horses-to-tractor transition in agriculture over the 20th century. From invention and commercial availability, tractors took decades to overtake horses. The same was true for steam engines, that iconic energy invention powering the Industrial Revolution—which itself was both one of most radical and life-changing events in all of human history and pretty dull on account of its slow changes.

“Over the sweep of history the tractor has indeed had an immense impact on people’s lives,” The Economist said in December 2023, “but it conquered the world with a whimper, not a bang.” In all ages, tech innovations have defused across societies slowly: the old technology remains relevant for decades. Even in the 1930s, two to three decades after the first tractors were built, there was more equine than mechanical horsepower on American farms. Scholars usually put the cutoff point for when tractors overtook horses on farms after World War II, a generation or more after they were first employed.

The story in The Economist also highlights the connection to real wages and overall economy. Productivity and economic growth are a tide that lifts all boats. A rule of thumb is that labor-saving technology gets adopted only once it makes sense to replace labor with machines. That happens when the machines get good enough, the cost of running them falls sufficiently, or the alternative uses for labor get high enough.

For the first few decades of the tractor’s existence, they weren’t obviously better than the source of literal horsepower that preceded them. They were expensive to run, were not that powerful, and couldn’t do many things that a horse could. For one, they compelled farmers to purchase gasoline—a resource they didn’t have—rather than putting horses out to grazing on land or having children (or cheap labor) tend to the animals—resources that they did have. And during the Great Depression in America, cheap labor wasn’t that hard to come by.

In time, those trends reversed; real incomes and better-paid manufacturing jobs bid labor away from the farms, and the demographic transition to smaller families meant that children couldn’t be routinely relied upon to, for example, care for the animals. In economic speech, the optimal size of farms grew, and on these larger farms the now much better tractors came into their own right.

In contrast, the labor that large language models like ChatGPT purport to displace is often highly remunerated, while the costs of running the operations are pretty low, which suggest that artificial intelligence (AI) might displace some such workers.

Yann LeCun, chief AI scientist at Meta/Facebook, is less convinced. In an interview with Wired magazine’s Steven Levy, LeCun says that “chatbots can produce very fluent text with very good style. But they’re boring, and what they come up with can be completely false.” For Reason magazine last year, I reflected on the promise of ChatGPT along similar lines: “Bad writers, cheating students, lazy professors, and journalists echoing press releases have clearly met their match. But the more human, creative, authentic storytelling that is the center of all meaningful writing has not.”

The tractor attempted to compete directly with a farming industry routinely employing over a third of the labor force in the 1800s and early 1900s in the United States, constituting some 15 percent of gross domestic product. What is the total addressable market for large language models and by extension general AI? Statista estimates that the market size of AI in the United States, a $27 trillion economy, is some $100 billion—a fraction of a percent. Even if that grows seven-fold this decade in line with projections (nothing to scoff at!), that’s also not as revolutionary as most pundits have claimed in this the first year of their widespread adoption.

Solow, who died late in 2023, might have repeated his statement about this new form of the computer age. Like the computer in the 1990s, the onset of AI and large language models make more media puff and noise than they have real-world, real-economy impact.

There is some suggestion that adoption of new technology and consumer items happen somewhat faster today than, say, in the 1940s or 1980s, but not by a lot. Still, what is more likely to happen than mass white-collar unemployment is that we’re going to have a symbiosis for a while. The old human-labor technology and the new machines will coexist, and human workers will gradually employ the machines in different ways. An evolution, not a revolution.

At the end of the day, writes Mike Munger for the American Institute for Economic Research, ChatGPT is just a calculator. And like calculators did, it will obsolete some human labor. And that will be fine.

Wall Street Journal | Labor & Employment

Companies with Robots Now Need Human “Robot Wranglers”

“Rutenberg, a robot technician and trainer at Amazon, is among a new class of workers responsible for corralling and managing the robots, fixing minor maintenance issues and keeping tabs on their locations. The professionals say the machines they work with tend to perform their tasks with precision but often also a little naiveté.”

From Wall Street Journal.