Gingrich’s laborious plan to save the youth of America
By Eric Edmonds
The opinions expressed are his own.
Republican Presidential frontrunner Newt Gingrich continues to insist that child labor laws in the U.S. are “truly stupid,” that the poor lack good work habits, and that the former would solve the latter. He hasn’t mentioned any specific policy changes, yet it’s clear that he doesn’t like the way things are done now, and that that he thinks America would be better off if kids worked more. If only the economics agreed.
Gingrich hasn’t been clear about what exactly he wants, but he seems to be advocating two complementary policies. First, he would like to see a reduction in the minimum age of employment. While campaigning in Cambridge, he said, “You go out and talk to people who are really successful in one generation. They all started their first job between 9 and 14 years of age.” Second, he wants to put poor children to work in their schools, because “really poor children in really poor neighborhoods have no habits for working and have nobody around them who work.” Granted, if there really is no proclivity to work, it’s not clear how he will actually get these children to start working.
Nevertheless, let’s imagine Gingrich gets his wish. What would be the practical consequences of a reduction in the minimum age of employment in the U.S.? Most likely, nothing good.
The biggest hole in Gingrich’s plan is a simple one: adding more workers does not create new jobs. With 1,373,000 youths 16 to 19 currently looking for work, according to the Bureau of Labor Statistics, adding even younger children to this pile would likely serve to increase unemployment or reduce unskilled wages further.
Already, 23.7 percent of youths ages 16-19 who are actively seeking employment are unemployed. Add 20.7 million children between 10-14 to the mix, and (assuming they chose to work at the same rate as children 16-19) we’d see nearly 7 million children competing for the same number of jobs that exist today. The economy wouldn’t grow, but by my estimation the national unemployment rate could rise to 13 percent when 7 million more potential workers compete for the same number of jobs.
Now suppose, as Gingrich does, that somehow these children could find work. Would they learn some valuable life lesson that puts them on a new path in life? The children of developing countries, where child labor is endemic, certainly haven’t. 40 percent of children work in Somalia, for example. Have these children taken the good work habits they learn as child laborers to boost their local economies? Have they lifted themselves out of poverty?
The issue is that workers that start unskilled stay unskilled. Especially if their education is suffering as a result. Working children do not learn skills that are going to help them to succeed in today’s technologically advanced global economy. How is learning to be an unskilled laborer at an early age going to help families in the long-run?
It is not. Implicit in Mr. Gingrich’s argument is that the act of working itself teaches some transferable skill that then makes the child laborer a better worker overall. We’ve seen what happens when successive generations of families need their children to work. They are unable to escape poverty. Some of the best evidence on this comes from Brazil, where, according to two economists’ research, former child laborers are three times more likely to need their own children to work.
And what happens when some of these kids get enamored with having a job and drop out of school? The real earnings of high school drop-outs have been falling over time, and the gap between them and those with some post-high school education has been growing. The average annual earnings of a high school drop-out is now just above $20,000 per year, according to the Census. That is two-thirds as much as an individual who completes high school and one-third that of a person who completes college. While college graduates can expect their earnings to grow over time, the high school drop-out has no such hope. It is possible that it has never made more sense for American children to devote their attention to school.
The child labor laws enforced today have been around since the 1930s, which means the successful people that Gingrich has met on the road and is so enamored with worked in essentially the same legal environment. Gingrich is nostalgic for a piece of America that hasn’t drastically changed.
Today’s child labor laws protect children from exploitation and risks that might be difficult for children and their caring parents to assess. But when the laws were first passed during the Great Depression, it was in part to lower the unemployment rate, helping older youths find work. Reversing these laws, then, would do just the inverse: not only endangering children, but also the economy. Instead, America’s leadership would be better off debating how to promote quality education, and make sure that the potential returns to that education are accessible to all hard-working Americans. Young or otherwise.
PHOTO: Republican presidential candidate Newt Gingrich walks into Trump Towers for a meeting with real estate investor Donald Trump on 5th Avenue in New York December 5, 2011. REUTERS/Andrew Burton