Child Labor Violations and Sweatshops in the U.S.

Published by the Government Accountability Office on 1990-03-16.

Below is a raw (and likely hideous) rendition of the original report. (PDF)


                          Unite d S ta tes G e n e r a l A c c o u n tin g O f& e   / v/    c3 (3 L /                       *
    GAO                   T e s tim o n y

    For R e l e a s e      Child L a b o r V iolations               and
    o n Delivery           S w e a tshops in th e U .S .
    E xpecte d a t
    9 :3 0 a .m . E S T
    March 16, 1990

                           S ta te m e n t o f
                           Franklin        Frazier,       Director       of
                           E d u c a tio n  a n d E m p l o y m e n t Issues
                           H u m a n Resources Division

                           B e fo r e th e
                           S u b c o m m i tte e on E m p loyment and Rousing
                           C o m m itte e o n G o v e r n m e n t O p e r a tio n s

    G A O /T-IiRD-90-18
                                                                                           G A O Form       1 6 0 (12/87)
                            ON CHILD LABOR VIOLATIONS AND
                                 SWEATSHOPS IN THE U.S.

The Fair        Labor Standards          Act of 1938 is the primary                     federal      law
regulating         wages and working             conditions          of American       workers,
including        children.          To protect       children          from oppressive          working
conditions,          the Act limits          the hours         that children          under age 16 can
work,      sets minimum age standards                   for work in specified                occupations,
and restricts            employment      in specific           hazardous        occupations        for youths
under      age 18.        Since the mid-1980s,               there       has been an increase             in
violations         of these child          labor     standards.             In addition,        there
appears       to be a widespread             problem       of "sweatshops"--workplaces                    that
regularly        violate      both wage or child               labor      laws and workplace            safety
or health        standards     --in    certain       industries           throughout       the country.
Increase      in the Number of Illegally            Employed     Minors  Detected   by
Labor.      The number of children          found to be illegally         employed
reached     almost     22,500    in 1989, from 9,200 in 1983, and remains              above
the levels       reached    during   the late      1970s.     Some reasons    for the
increase      given by Labor officials           include     (1) low unemployment      rates,
which    led to a shortage         of adult     workers   in some areas,      and (2)
Labor's     increased      emphasis    on child     labor   issues.
Increase         in All Types of Federal             Child     Labor Violations.             Some
children         are employed         in violation      of more than one child               labor
standard.           Labor    identified       about    10,000     total    federal     child      labor
violations          in FY 1983 and about            25,000     in FY 1989, an increase               of
about      150 percent.            The greatest      growth      occurred      in violations         of the
hours      standard,      tripling       from about        5,000 in 1983 to over 15,000                 in
1989.        Violations        of   the  federal     minimum      age   standard      and    hazardous
order      restrictions          roughly    doubled     over this       period.
Most Violations       Are in Retail     Trade,    Especially   Restaurants.         Between
FY 1983 and FY 1989, over three-fourths               of the detected      child    labor
violations      were found in retail       trade.     Within this sector,        42
percent    of all violations     were found in restaurants          and 26 percent
were detected       in grocery  stores.
Children      Are Being Injured,               Sometimes       Fatally,        at Work.     Although
available       data make accurate              estimations         difficult,       a significant
number of children            are injured          at work each year.              For 1988, 26
states     provided      us injury        data showing           that minors       under age 18
suffered      over 31,500 work-related                  injuries        and illnesses.          Further,
our review       of 29 child         fatality        cases inspected            by OSHA in FY 1987
and FY 1988 showed that                10 cases probably              involved     both violations           of
safety     or health       standards         that contributed             to the fatality        and
violations        of child      labor      laws.
Incidence       of Federal      Child    Labor Violations        Is Consistent     With the
Widespread        Existence     of Sweatshops.        Federal      and state   enforcement
officials       believe     "sweatshops"      exist   throughout      the nation,
especially        in the restaurant,         apparel,     and meat processing
Mr.    Chairman        and Members          of   the    Subcommittee:
I am pleased          to be here today to share with you some results                                       from
GAO's analysis            of child        labor       and sweatshop            working       conditions        in
the United         States.        In particular,                I will     comment on the general
trend      in the number of federal                     child      labor     violations,         the types
of violations           being     reported,           the industries            where these
violations         are being        found,         and injuries          and fatalities             sustained
by children         at work.          I   will      also      discuss      the    highlights         of our
work on sweatshops.                 In 1988 and 1989, we issued                        reports       on the
problem       of sweatshops,            in response             to an inquiry          by
Representative            Charles       E. Schumer.               We are currently
investigating           the problem            of child         labor    violations          for
Representative            Don J. Pease, and we will                      provide        further      analyses
on this       issue     in our final             report       to him in late April.
Our major        points      are as follows:
0        Since FY 1983, there          has been a general       increase       in the
         number of illegally         employed    minors   detected      by Labor.          The
         current   level    remains     far above the levels         detected       during
         the late    1970s.      Some reasons     for the increase         given     by
         Labor officials       include     (1) low unemployment         rates,      which
         led to a shortage        of adult    workers   in some areas,           and (2)
         Labor's   increased      emphasis    on child    labor    issues.
0       Detected    child  labor  violations     have increased          about 150
        percent   since FY 1983.       The increase       in violations        has
        occurred    across   all major     types of child      labor     standards:
        hours,   minimum age, and hazardous         order    restrictions.
0       Most detected        violations        are found in retail      trade                        and
        service    industries.          Within     these sectors,   grocery                          stores
        and restaurants          are cited      most often   for violating                           federal
        child   labor    laws.
0       Although         inadequacies          in available       data make             accurate
        estimations           difficult,         there    is evidence    that             children         are
        frequently           the victims         of injury    or illness              at work.
        Twenty-six           states      reported      to us over 31,500                injuries         or
        illnesses          to minors        under age 18 in FY 1988                   alone.
0       Sweatshops,       defined    here as workplaces   that regularly
        violate      both safety      or health  and wage or child   labor laws,
        exist     throughout      the nation,   and can be found in many
The Fair   Labor Standards    Act of 1938 (FLSA) is the primary
federal  law regulating    the wages and working     conditions      of child
workeys.    The Act limits    the number of hours and times that
children   14 and 15 years of age may work,      especially     during   the
school       year,  in nonagricultural        industries      (hours standard).
For example,        such minors      are allowed      to work only outside      school
hours     and no more than 18 hours           in a school      week.   In
agriculture,        children    under age 16 are prohibited          from working
during       school   hours but there      is no limit      on the number of hours
that can be worked.
In nonagricultural          industries,         the Act generally        provides      a basic
minimum working         age of 16, although             minors    who are 14 and 15
years     old may work in specified               occupations      in retail,     food
service      and certain      other     industries        (minimum age standard).           In
agriculture,       the basic minimum working                age is also 16, although
the law permits,         under certain          conditions,       employment    of minors
as young as 10 years old.
Tn addition,           the Act permits        the Secretary          of Labor to set a
minimum age for working                in occupations         determined       to be
particularly           hazardous      (hazardous       order    standards).          Exercising
this     authority,        Labor maintains         hazardous       occupations          orders    in
17 nonagricultural              occupation      and industry         areas.      These orders
prohibit        children       under the age of 18 from employment                      in certain
occupations          and industries.          For example,         youths    under age 18
cannot       operate      meat slicing       machines       or regularly       drive       a car or
truck      to deliver        food.     In agriculture,         certain      activities,         such
as operating           corn pickers,       are prohibited          for minors        under age
Employers      found in violation      of any of these provisions             may
receive,     among other    sanctions,    civil    penalties         of up to $1000
for each violation.         The Act also provides,           in the case of a
willful    violation,    for a fine     up to $10,000.          In FY 1989,
employers      paid about $1.5 million        in federal       child    labor
The Wage and Hour Division,                    a unit       of Labor's          Employment
Standards        Administration             (ESA),     is responsible            for the
administration            and enforcement            of federal          child     labor   standards.
Compliance         officers        inspect     for child         labor      violations       as part     of
their     inspections          for compliance            with other         FLSA provisions,          such
as minimum wage and overtime                      standards.           In addition,        the
Division        conducts       specific       child      labor     investigations          in response
to information,             complaints,        or referrals           from sources         such as
newspapers,          schools,        and state       agencies.           In FY 1989, the agency
had 990 compliance               officers      to perform          all FLSA investigations,
as well       as to enforce           other    statutes        for which it has

1In both agricultural        and nonagricultural         industries,
chiLdren      may be exempted     from these orders        for reasons    such as
participation       in an apprenticeship        or other     training  program.
Increase       in     illeqally          employed      minors
In    Eiscal      year 1989, Labor identified                   about     22,500 children          under
aqe     18 employed          in violation         of federal        child    labor      laws, a 150
percent       increase         from 9,200 identified              in 1983 and far above the
peak     of about        16,000      identified        in 1977, as shown in the first
fiqure.         Durinq       this    1983-1989       period     there was only a small
increase        in the number of youths workinq.                         The Bureau of Labor
Statistics          reported       that     6,759,OOO       16-   throuqh      19-year-olds        were
emoloved        in 1989, less than a 7 percent                      increase      from the
6,342,OOO         in 1983.         Labor officials           mentioned       several       reasons
that may account               for the increase           in detected        violations
includinq         (1) low unemployment               rates,     which led to a shortaqe               of
adult      workers       in some areas,2           and (2) Labor's           increased        emphasis
on child        labor      issues.

GAO Detected Illegally Employed
    Minors, FY 1977-89
                25000       Number

                       1977       1978   1979   1980   1981     1982    1983    1984   1985   1986    1987
                        Fiscal Years

2Bctwein       1983        and 1989, the total               civilian          unemployment          rate
declined       from        9.6 percent  to 5.3              percent.
      Growth in detected      federal
      child  labor violations
      The number of federal          child  labor                                     violations      has also qrown
      substantially        since  the mid-1980s.3                                          In FY 1983, total     federal
      child    labor   violations     were about                                      10,000,    increasinq    to about
      25,000      in FY 1989, an increase       of                                    about 150 percent.4

G-0        Detected Child Labor Violations by
           Type, FY 1983-89
             16500 Number of violations

               1500                                                                               . . . . . . . . . . . . . . . ..*m~*~~~B~~*~=‘.~~~’

                                                                                                                              . . ,,
                  1983          1984                                       1985          1986           1987              1988               1989
                   Fiscal Years
                      -         Hours Standard
                       ,=....=. Under Age Standard
                      -         Hazardous Occupations

      3The number of detected     violations      is qreater    than the
      number of illeqallv    employed      minors because    a minor may be
      employed  in violation   of more than one child         labor  standard.
      4 A previous        GAO report       (The Fair Labor Standards          Act:
      Enforcement        of Child    Labor Provisions         in, Massachusetts,        GAO/HRD-
      88-54,     April     28, 1988) focused          on the FY 1983-1987        increase    in
      violabions       in one federal         reqion.      To be consistent        with this
      earlier     study,      we used FY 1983 as the base year for examininq                    the
      national      increase      in violations.
    Increases       have occurred      in violations       of all the child          labor
   standards,         as shown in figure         2 above.     Over the 7-year          period,
  .Labor     identified      about 60,000 violations            of the hours standard,
   over 9,000 violations            of the minimum age standard             and almost
   40,000 hazardous          orders   violations.         The greatest      growth      occurred
   in violations          of the hours standard.           These violations          increased
   from about 5,000 in 1983 to over 15,000                    in 1989.      Violations         of
   federal      minimum age and hazardous            order   standards      roughly       doubled
   over this        period.
  ESA finds       most child      labor    violations.     in retail      trade    and the
  service      industries.       Businesses         in the retail      trade    industry
  consistently         were cited      for about three-fourths            of the violations
  identified       by Labor between FY 1983 and 1989.
  Federal    child    labor     violations        are concentrated     within   certain
  segments    of the retail          trade     sector.     Between FY 1983 and 1989,
  almost    70 percent       of all violations’were            found in two retail
  trade   industries:        42 percent        in restaurants      and 26 percent      in
  grocery    stores.        (See fig.      3.)

GPQ Detected Violations by
    Industry Subgroup,FY 1983-89


Children       are being       injured,
sometimes        fatally,      at work
Although     comprehensive         data are difficult          to obtain,     there    is
evidence     that children         are frequently       the victims        of injuries      in
the workplace.           In the absence      of any national         data base on work-
related    injuries        and illnesses     of children,         we tried    to obtain
data directly        from the states.          However,      the data provided         by the
states   differs       in the definition         of an injury       and the ages
included     in the statistics.           For example,         some states      define    an
injury   as one that causes the employee                  to miss one or more days
of work,     while     other   states    base an injury          on seven or more days
of lost    worktime.
Only 26 states       could give us data for children            under age 18.
They reported      to us over 31,500 work-related           injuries        and
illnesses      to minors     under age 18 in FY 1988 alone.             However,        this
number excluded       injuries     in some populous    states,       including
California,      Massachusetts,      New York,    and Ohio,     and thus may
account     for less than half       of the total    number of child           injuries
in the workplace.
As for child            worker   deaths,    we reviewed           29 cases of fatalities
of children           under age 18 inspected              by the Occupational             Safety     and
Health       Administration          (OSHA) in FY 1987 and FY 1988.                      Officials
in the Wage and Hour Division                    identified        11 of these cases as
probably         involving     at least     one hazardous            order    violation.           These
deaths       occurred       in certain     activities          covered      by the hazardous
orders       such as roofing,          excavation,          the use of power driven
hoisting        equipment,      and woodworking             machinery.        In addition,          10
of these 11 cases also involved                     potential        multiple      labor      law
violations         --a safety     and health        violation        that OSHA believed
contributed           to the fatality       as well         as the apparent          violation       of
child      labor      laws.

Incidence     of       child   labor violations
is consistent           with the widespread
existence     of       sweatshops
The growth      in child        labor    violations       is consistent       with opinions
of enforcement        officials         around      the country    that there      is a
widespread      problem       of multiple         labor   law violators,        or
"sweatshops."         GAO has reported              its findings     concerning
sweatshops      in several         previous       reports    and forums,      so we will    be
brief    here.5
In our earlier            work, we defined       a "sweatshop"           as a business     that
regularly        violated      both (1) safety       or health         laws and (2) wage or
child     labor      laws.     Some sweatshops       would,       thus,    involve   child
labor     violations.          However,   child    labor      violations       may also exist
in the absence            of safety    or health     violations.           In other    words,
there     is a partial         but incomplete      overlap        between     the two types
of problems.
We surveyed        over 100 federal              and state        officials          nationwide        who
are responsible           for enforcing            laws relevant            to working         conditions
and thus were likely               to be knowledgeable                about the question
of sweatshops.           These officials              were regional             administrators           and
district     directors         in the Wage and Hour Division,                          OSHA, and the
Immigration        and Naturalization                Service      (INS) and state              labor
department       directors.            In the opinions            of the officials               we
surveyed,      sweatshops         existed        throughout         the United           States.
Thirty-five        state     labor       department        directors          identified
industries       in their        states       in which either            wage and child             labor
or safety      and health         violations          were a problem,              and seven
identified       industries          in which they thought                  both kinds         of
violations      were a problem.                 Three-fourths          of the federal
officials      (40 of 53) said sweatshops                      were a problem             in at least
one industry         in their        regions.

5U.S. General          Accounting       Office.        "Sweatshops"       in the U.S.:
Opinions       on Their     Extent      and Possible        Enforcement        Options
(GAO/HRD-88-130BR,            August      30, 1988).
U.S. General         Accounting        Office.       "Sweatshops"       in New York City:
A Local      Example of A Nationwide                Problem    (GAO/HRD-89-101BR,          June
8. 1989).
William'J.        Gainer,     Director       of Education       and Employment         Issues,
"Sweatshops"         and Child       Labor Violations:          A Growing-Problem          in the
United      States,     Presentation         before     the Capitol       Hill   Forum on the
Explaitation         of Children        in the Workplace,           November 21, 1989.

Although    the federal         officials      said that apparel       manufacturing
and meat processing           had a "serious        problem"    with sweatshops,          the
industry    they most frequently             cited    as having    a serious     problem
was restaurants.           This is consistent          with our observation          that
most child     labor     violations       are found in retail        trade    and, in
particular,      restaurants.
In our previous                work on sweatshops,              we suggested          that enforcement
agencies        might        increase      their     effectiveness           in detecting           multiple
labor      law violations              by improving         their     interagency           working
relationships.                 In some parts         of the nation           this     is now
occurring.             For example,          in January         1989 the New York Region Wage
and Hour Division                 and OSHA offices            reached      a formal         agreement         to
exchange        the names of suspected                  violators        of each other's              laws
and to train             each agency's           inspectors        to identify          situations          that
merit      referral.             Although      Labor officials           stated      that they have
encouraged           officials         in other      regions       to establish           similar       formal
agreements,            we are not aware of any others                      in place         at this       time.
As another           option       for controlling           multiple       labor     law violators,
we reiterated              our previous          recommendation          that Congress            amend the
Fair     Labor Standards               Act to provide          penalties        sufficient          to deter
violations           of minimum wage, overtime                    and recording           requirements.

This concludes   my statement.                      I will      be glad       to   answer      any
questions   you may have.