Is child labor really necessary in Indias carpet industry

Abstract

This study examines the impact of eliminating child labor from the hand-knotted rug industry in Uttar Pradesh India in 1993 from the industrys point of view. A sample survey of loom owners/employers (362 enterprises and 772 looms) was conducted in Mirzapur and Sonbhadra districts in the Carpet Belt. In-depth interviews were conducted among weavers owners and exporters in India and a case study of US importers. A description is given of the types of enterprises and owners using child labor the irreplaceability of child labor the relative productivity and the cost of eliminating child labor. The tentative results indicate that replacement of children by adults aged 14 years and older would increase the consumer cost by only a few percentage points and is feasible. The shift to adult labor would involve increases in wages which would have to be passed on to subcontractors and exporters. If all parties in the chain from producer to consumer kept their percentage margins Indian carpets could be at a competitive disadvantage with Chinas and Pakistans very close substitutes. If global policy applied to all hand-knotted carpet industries no one country would be at a disadvantage. It is suggested that companies with at least 5 looms be targeted first for labor replacements and that women replace men. Interviews with wholesalers reveals that an increase in costs of 5% would have no effect on sales. Responses to questions about increases beyond this percentage and specification by quality of carpet are viewed as inadequate. Most agreed that an increase of 24% in costs would prevent the purchase of Indian carpets. US consumers were viewed as buying on the basis of color rather than brand. Indian exporters have the market advantage of being able to produce carpets more quickly to US desires but as the Chinese increase their production their responsiveness to market demand may change. A major impact on markets will be potential passage of the Harkin Bill which would ban the importation of commodities produced by child labor.

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