Human Trafficking and the Financial Crisis

The State Department released the ninth Trafficking in Persons Report on 16th. In addition to the country reports, the TIP report also highlighted the impact of the economic crisis on the global trade in persons for forced labor and commercial sexual exploitation. As Secretary Clinton said in her opening letter to the report, “This year, there is new urgency in this call. As the ongoing financial crisis takes an increasing toll on many of the world’s migrants – who often risk everything for the slim hope of a better future for their families – too often they are ensnared by traffickers who exploit their desperation” (1).

According to the report, the economic crisis has lead to a decrease in legitimate economic opportunities for the world’s most vulnerable people, an increased demand for extremely cheap labor, and a decrease in the resource available to anti-trafficking NGOs (7,9). Combined, they form a lethal combination for trafficked victims and potential victims.

As the report states, “workers are made more vulnerable to forced labor practices because of high rates of unemployment, poverty, crime, discrimination, corruption, political conflict, and cultural acceptance of the practice” (17). The TIP report cites the International Labor Organization’s January 2009 report that found that the global financial situation is “causing dramatic increases in the numbers of unemployed, working poor, and those in vulnerable employment “(32-3).

The situation is likely to only grow worse, particularly in areas that already have extreme trafficking problems. The TIP report notes that Southeast Asia – Already home to 77% of the world’s forced labor – could face unemployment as high as 113 million people in 2009 (33). In Eastern Europe “international organizations and local authorities have already reported a rise in victims of labor exploitation” (34). The situation is not likely to improve in the near future, according to a recent World Bank report that suggests that economic recovery will be slow, particularly in impoverished nations.

In addition to the cost to trafficked victims directly, the “cost of coercion” or the loss of wages people would earn were they not enslaved, also harms the families of trafficked victims, further exacerbating global poverty and making people more vulnerable to being trafficked themselves (34).

Even as increased vulnerability is leading to growth in the supply of trafficked victims, the financial crisis is also leading to growth in the demand for trafficked victims. The TIP report cites UN officials as stating that “(t)hey expect the impact of the crisis to push more business underground to avoid taxes and unionized labor” (37). The demand for cheap products and services, coupled with the pressure of the economic crisis is thus fueling the demand for modern-day slavery.

The TIP report also points out that this crisis affects different populations differently. The report notes that “Research links the disproportionate demand for female trafficking victims to the growth of certain “feminized” economic sectors (commercial sex, the “bride trade,” domestic service) and other sectors characterized by low wages, hazardous conditions, and an absence of collective bargaining mechanisms” (36). According to FAIR Fund, 80% of trafficked victims are women and girls, and the current economic situation is likely to only increase this disparity. Plans to address the economic crisis need to consider the gendered manifestations of the crisis, and ensure that stimulus efforts do not simply create economic opportunities for men only.

Finally, along with increased supply and demand, anti-trafficking efforts are also facing a decline in resources to work to prevent trafficking, assist survivors, and punish perpetrators. The TIP report points out that “The tough times are also affecting the work of anti-trafficking NGOs, which often provide crucial services in the absence of adequate government or private-sector programs. Donors are tightening their belts, and organizations are finding it difficult to continue their operations” (40).

While this news might seem dire, the TIP report also pointed to and encouraged efforts to continue to fight trafficking, suggesting that anti-trafficking work is more important now than ever before in light of these recent developments. For example, the report pointed out that, “the enactment of the Trafficking Victims Protection Reauthorization Act of 2008 (TVPRA of 2008) strengthened the U.S. Government’s criminal statute on forced labor” (25), a fortuitous develop in light of recent indications that labor trafficking is increasing.

The TIP report suggested that everyone has a role to play in decreasing demand for labor trafficking, from individuals to governments (31), suggesting that “One key to addressing such demand is raising awareness about the existence of forced labor in the production of goods. Many consumers and businesses would be troubled to know that their purchases— clothes, jewelry, and even food—are produced by individuals, including children, who are forced into slave-like conditions” (32).

The ninth Trafficking in Persons Report paints a grim picture: the global financial crisis is leading to increased supply of vulnerable people, increased demand for cheap labor and economic exploitation, and a decrease in services for trafficked survivors and efforts to fight trafficking. Rather than being paralyzing, this picture should be motivating. The call to fight modern-day slavery is more pressing now than ever before, and as Secretary Clinton concluded her opening remarks on the report “I am confident that together we can make a difference, all over the world, in the lives of people deprived of their freedom” (1).