Profits and Poverty: The Economics of Forced Labor

Profits and Poverty: The Economics of Forced Labor

Profits and Poverty: The Economics of Forced Labor

The global integration of economies, including labour markets, has brought many opportunities for workers and businesses. Despite the past years of economic crisis, it has generally spurred economic growth. However, the growth in the global economy has not been beneficial for all. Today, about 21 million men, women and children are in forced labour, trafficked, held in debt bondage or work in slave-like conditions.

The publication of this new ILO report on the economics of forced labour takes the understanding of forced labour, human trafficking, and modern forms of slavery to a new level. It builds on earlier ILO studies on the extent, cost and profits from forced labour. For the first time, it looks at both the supply and demand sides of forced labour, and presents solid evidence for a correlation between forced labour and poverty. What’s more, it provides startling new estimates of the illegal profits generated through the use of forced labour, as well as new evidence of the key socio-economic factors that increase the risk of falling victim to coercion and abuse.

These new findings come as progress is being made in the struggle against forced labour. State-imposed forced labour is declining in importance when compared to the extent of forced labour in the private economy. Of course, vigilance is needed to prevent state-imposed forced labour from resurging. But attention must now be focused on understanding what continues to drive forced labour and trafficking in the private sector.

Chapter 1 lays the groundwork for an understanding of forced labour and what it is, and examines the importance of defining forced labour and related practices, such as human trafficking and slavery. It reviews the global forced labour estimates published by the ILO in 2012, which were significantly higher than the ILO’s earlier estimate.

Chapter 2 examines the profits from forced labour. Using a new and expanded methodology and based on the 2012 Global Estimate, the report provides updated estimates of the global profits generated by forced labour.

Chapter 3 provides a new analysis of the socio-economic factors that make people vulnerable to forced labour. Based on a series of ground-breaking country surveys that consider a range of different cohorts and factors, it highlights where forced labour is most likely to occur and provides a striking correlation between household vulnerability to sudden income shocks and the likelihood of ending up in forced labour. It also elucidates risk factors that can increase vulnerability to forced labour, such as poverty, lack of education, illiteracy, gender and migration.

The results of this study serve to highlight the critical need for standardized data collection methods across countries that enable the ILO and other international organisations to generate more reliable global figures, measure trends and better understand risk factors. What’s more, it also shows how understanding the socioeconomic factors that increase a person’s vulnerability to forced labour can help drive the development of new, more robust and concrete strategies that augment existing programmes. In addition, it calls for a strengthening of laws and policies based on normative responses and an expansion of preventive measures that can keep people out of forced labour.

The report concludes that there is an urgent need to address the socio-economic root causes of this hugely profitable illegal practice if it is to be overcome. Comprehensive measures are required that involve governments, workers, employers and other stakeholders working together to end forced labour. It shows how the continued existence of forced labour is not only bad for its victims, it’s bad for business and development as well. And it aptly illustrates that forced labour is a practice that has no place in modern society and should be eradicated as a matter of priority.

To read the full report click here.