This post was first published at StopChildLabor.org on Nov. 2, 2016.
The UN has set a very ambitious goal—one of the sustainable development goals adopted last year—of eliminating child labor, child slavery, forced child labor, and the use of child soldiers in the next nine years. It’s daunting to think about. Nearly 170 million children remain in child labor despite a one-third reduction in the number of children trapped in child labor over the last 15 years. Eighty-five million children remain in hazardous child labor, working in brothels, mines, and places no child should be sent. Nearly six million children remain in child slavery.
How is the world to achieve this laudable, essential goal? The answer is it cannot—not without a significant infusion of resources. More than 120 million children who should be in school are not. A billion children are illiterate. Functioning schools are a critical element in the battle against child labor and child slavery. In West Africa, where two million plus children toil on cocoa plantations to harvest the main ingredient in chocolate, more than 3,000 schools are needed to provide children with educational alternatives to hazardous work.
Clearly, hundreds of billions of dollars are needed over the next nine years. Is the global community likely to provide this funding? Probably not, unless there are new revenue sources from which they can draw the money from.
Fortunately, the European Community and the US Congress is working on a new revenue source: a financial transaction tax that would be applied to all financial transactions like stock or derivative trades and bond purchases. Because there are trillions of such trades each year in US markets alone, even a tiny tax ranging from one-tenth of one percent to a half percent could raise tens of billions of dollars up to $300 billion a year. The Inclusive Prosperity Act in Congress by Rep. Keith Ellison (D-MN) and Senator Barry Sanders (I-VT) hopes to do just that, and the Child Labor Coalition, which NCL co-chairs, helped organize a congressional briefing in September to help promote the concept.
The European community is in various stages of implementing an FTT in over 10 countries. The idea is not new. The US had an FTT in the past and continues to pay for the Securities and Exchange Commission with a very tiny FTT. Japan successfully raised billions with an FTT in the 1990s before conservative forces led them to abandon the tax.
An FTT would make our tax system more equitable.
Financial trades are conducted by or on behalf of wealthier Americans and these should be taxed unless we are prepared to ask the poorest working Americans to pay an unfair share of the tax burden. Many of the richest Americans have the money to set up tax shelters that allow them to pay proportionately little taxes. Warren Buffet, one of the richest Americans has called on the richest Americans to pay a fairer share of taxes.
But what about the millions of average Americans who have their pension funds in the stock market? Economist Dean Baker of the Center for Economic Opportunities believes that an FTT would provide some incentive to reduce the number and frequency of trades and that pension funds may actually experience no, or almost no, reduced returns while still generating substantial revenues. Baker notes that computers have allowed the costs of financial trades to drop precipitously over the last two decades and a slight increase in the cost of trading could easily be absorbed and trading would still be much cheaper than it was 20 years ago.
Senator Sanders hopes to use the FTT to provide free college tuition for all young Americans. Rep. Ellison would fix America’s failing infrastructure but reserve some funds to attack the global health needs of children.
At the CLC, we ask that should these legislative initiatives be enacted, lawmakers reserve a portion of the FTT revenues—say 20 to 25 percent—to provide basic needs like food, medicine, and access to education for children around the world. If other nations followed the US’s lead, we might have the resources to end child slavery and child labor and allow every child in the world to become educated in the next nine years.