Why do movie studios hire children? Because the script calls for a child. Union regulations and price floors can be put in place to protect the child actor’s interests without completely defeating the purpose of hiring them in the first place.
Even though child actors tend to be considerably more expensive than adults, they still get cast. I don’t think that would’ve happened in sweatshops.
From my understanding, the "special laws" put hard caps on the amount of hours that a child can work in a week, and establishes a bunch of other protections like making sure they get adequate schooling, etc.
In a film with a child in a lead role, the entire movie production schedule often revolves around this hard hours limit.
Perhaps a larger tragedy is children working in family businesses. Poor, legal immigrant families often put their children to work at the family restaurant, and this is legal for any number of hours.
It’s absolutely not the same as a sweatshop, but hollywood has a long track record of ruining children’s lives for profit.