How Does Human Trafficking Affect The Economy?

How Does Human Trafficking Affect The Economy?

As much as we would like to think that slavery and serfdom are a thing of the past, the reality is, human trafficking and forced labor continue to exist in the 21st century.

Simply put: human trafficking is modern-day slavery and indentured servitude. Such barbaric occurrence has no place in today's world -- and much of the responsibility for quashing it rests on the private sector where a lot of human trafficking takes place.

This article discusses how human trafficking affects the economy, it's problematic nature, and the importance of preventing it from happening in businesses though heightened awareness and formal company-wide training.

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What Is Human Trafficking?

According to the United States Victims of Trafficking and Violence Protection Act of 2000, human trafficking is defined (in Section 103(8)) as:

  • (A) sex trafficking in which a commercial sex act is induced by force, fraud, or coercion, or in which the person induced to perform such act has not attained 18 years of age; or
  • (B) the recruitment, harboring, transportation, provision, or obtaining of a person for labor services, through the used of force, fraud, or coercion for the purpose of subjection to involuntary servitude, peonage, debt bondage, or slavery.

The human trafficking industry has only grown with the advent of globalization. It goes after vulnerable populations impacted by poverty, social instability, military coups, environmental disasters, corruption among the authorities, and weak (or non-existant) civil rights/protections for women and ethnic minorities. For example, economic vulnerability contributes to the millions of child marriages (which is considered a form of modern slavery) still taking place in the world.

The COVID-19 pandemic, with its negative effects of world economies -- especially already struggling ones -- has precipitated even more opportunities for human exploitation, as desperation and lack of protections among the world's poor grows more critical.

Types Of Trafficking Victims

The International Criminal Police Organization (Interpol) outlines several types of human trafficking/ trafficked persons:

Forced Labor

Most forced labor victims come from developing countries: they are "recruited" into this trap with lies and false promises of real work, but find themselves seized into slavery with all their documents confiscated to make it impossible to escape. Migrant workers are particularly vulnerable here, as many of them already have "iffy" statuses in the country -- which makes them prime targets for human smuggling.

Sex Trafficking

Trafficking in women for sexual exploitation makes up for a large part of the trafficking industry. Women and children from poor nations are coerced by sex traffickers into leaving their homes in search of a better life, only to end up captive sex workers in foreign countries, with no one to advocate for their human rights. In most cases, you'll find this type of human trafficking in massage parlors.

In the sex industry, both labor and sex exploitation are common. In fact, they often go hand-in-hand: exotic dancers and adult film performers are often undercompensated (or not at all) and experience additional sexual abuse.

Forced Criminal Activities

Forced criminal activities trafficking involves victims getting trapped into doing the "dirty work" for criminal organizations, forced to carry out illegal activities such as theft, contraband and fake brand peddling, drug cultivation, forced begging, etc.

Organ Trafficking

With a deficit of vital human organs available for transplanting, criminals capitalize on the desperation of rich patients and poor donors, kidnapping humans for their organs as well as failing to provide adequate (or any) medical conditions and safety for the voluntary donors, circumventing all legal health regulations.

The Effects Of Human Trafficking On The Economy

Human trafficking yields $150 billion in illegal annual profits! How is this possible?

The High Reward - Low Risk Dynamic

Despite human progress in civil rights, slavery continues to be a highly profitable crime because:

  • the perpetrators are rarely caught and made to face criminal prosecution (because most people are woefully unaware of the signs)
  • the existing punishments are too lenient to fit the crime, failing to deter future ones
  • the illegal demand for forced labor and sexual exploitation around the world is insatiable
  • unlike drugs and many other illegal commodities, human beings can be resold multiple times, making them an "attractive investment" for black market consumers

All of these factors that make human trafficking a "low risk / high reward" venture for the organized crime and other underground factions, with a net profit margin of over 70 percent.

Of the 150 billion, a third of the profits is made from forced labor, while the other two thirds are gained from commercial sexual exploitation (typically of women and children).

The Economic Impact Of Human Trafficking

Besides engaging in acts that are unspeakably unethical and illegal, human traffickers are robbing their countries' as well as the global economy by operating outside of established regulations.

Black Market Profits Are Not Taxed

Profits made from trafficking human beings cannot stimulate the economy as they are kept circulating between criminal organizations and terrorist groups, financing illegal drugs, arms deals, and corrupt, abusive regimes. Underground markets of this nature undermine the economy and syphon currency away from legitimate business interactions.

Human Trafficking Victims Need Government Funding Help

Child labor and sexual exploitation causes irreparable, severe trauma for life, robbing victims of normalcy, and setting some on the path to perpetuate the cycle of abuse onto others. Adults forced or tricked into servitude are psychologically (and often physically) damaged for life as well.

As such, trauma, suffering, and illness can render entire generations unable to work and function on their own, having to become reliant on government welfare systems to make ends meet. The ones that are able to work often have a hard time obtaining jobs due to criminal records associated with their backgrounds (such as past prostitution charges).

In other words, trafficking survivors struggle with re-integrating into society and require taxpayer funds for staying afloat. And they deserve that support for what they have been through! But the fact remains: these individuals could have been fully functioning members of society contributing to its economy, had their psyches and bodies not been destroyed by having been enslaved.

Efforts to prevent, investigate and prosecute human trafficking -- as well as resources for supporting victims -- require a significant budget from the US Department of Justice: the latest number is $87 million.

The Role Of The Private Sector In Human Trafficking

The private sector hosts approximately 70 percent of unlawful human exploitation.

Industries most vulnerable to/guilty of the bulk of labor trafficking in the US are (as of 2015):

  1. domestic work
  2. agriculture
  3. traveling sales
  4. restaurants and food service
  5. health and beauty services

Sex trafficking runs rampant in the poorly-regulated adult entertainment industry, while sex traffickers run their operations engaging the services of legal industries such as classifieds websites, matchmaking and dating services, and hospitality spaces.

How Can The Private Sector Fight Human Trafficking?

Considering how much human trafficking takes place within the private sector, combatting this hideous social problem is not just a matter of "can" but of "must" -- in the United States as well as abroad.

In the US, business owners have a dual responsibility:

  • To take care of their employees: making sure they are compensated fairly, know their human rights, and are working on their own free will.
  • To ensure they do cleanbusiness themselves: being very selective about whom they do business with and being certain that their providers and lines of production (at home and abroad) are completely free of forced labor.

It pays for companies to develop a corporate culture of respect and consideration toward human rights of workers. This is best achieved through adopting policies and best practices such as:

  • not charging recruitment fees to workers
  • regularly monitoring and auditing suppliers
  • enforcing safety and health standards for foreign sources and associates

Businesses in the US are legally liable for damages under the federal law known as the Trafficking Victims Protection Reauthorization Act (TVPRA) if it can be proved that they knowingly benefitted from activities they knew about or should have recognized as human rights violations.

EasyLlama Now Offers Anti-Human Trafficking Training!

Human trafficking is a revolting crime that has no place in the 21st century and must be fought on all relevant fronts: law enforcement, labor regulations, corporate responsibility, and education.

As with all crimes, it's better to prevent them from happening than to deal with their damaging, messy and costly fallout. In the case of human trafficking, this is especially important because human lives are at stake.

As a prominent presence in the e-learning space, EasyLlama is joining the effort to combat human trafficking by offering a new training program that defines "human trafficking" in its many manifestations and teaches employees and leadership to take preventative measures, to recognize human trafficking "red flags" around themselves, and to report their observations to proper authorities.

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