LESSON 4 HR 324

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Wilfrid Laurier University *

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Jun 2, 2024

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LESSON 4 - THE ECONOMICS OF HUMAN TRAFFICKING Lesson Tasks 1. Complete the online lesson sections, including watching the videos as you encounter them 2. Read the indicated selections as you encounter them in the course of the lesson. The lessons are designed with the intention that you will alternate between text provided in this lesson and sections of various course learning materials (e.g., textbook, Library electronic reserves, online materials, etc.). Please follow the prompts that will instruct you when to read the corresponding readings from the learning materials. 3. Complete all lesson activities 4. Make some notes as you work through the lesson and readings based on the learning objectives. You can then refer to them when you answer the quiz. 5. Complete ungraded “Stop and Think” prompts 6. Complete Quiz #4 . Readings Busch-Armendariz, N. Nsonwu, M., & Heffron (2018). Human Trafficking: Applying Research, Theory, and Case Studies. Chapter 4: The Economics of Human Trafficking (pp. 111-138) Kara, S. (2011). Supply and Demand: Human Trafficking in the Global Economy. Harvard International Review, 33 (2), 66-71. Learning Outcomes After completing this lesson, students should be able to demonstrate that they can: 1. Recognize the following definitions and ideas taken from the main reading, as demonstrated by answering questions on the end-of-lesson quiz: o supply and demand factors of human trafficking o the cost-benefit economic theory o supply chain o the price elasticity of demand o economic disparity between the global north and the global south o neo-liberalism o the cost-benefit perspective o various types of costs associated with human trafficking o estimate economic impact of human trafficking: incidence- based vs. prevalence-based

o anti-trafficking strategies that increase the cost and risk for traffickers o bonded labour – debt bondage o consumer behaviour and consumers’ power 2. Examine and reflect upon core issues raised in this lesson, as demonstrated in completing other course assignments, such as response papers, the conceptual map and the mini-research paper. INTRODUCTION Human trafficking, like other criminal activities (e.g., drug trade and arms trade), generates a significant amount of revenue, with human beings treated as a commodity. The 2021 Trafficking in persons report, which is the U.S. Government's principal diplomatic tool to engage foreign governments on human trafficking, estimated an approximate 150 billion dollars worldwide annually through this highly profitable crime. This illegal economic activity has received governments’ attention nationally and globally. We will begin our lesson by reading Chapter Four of the main text. You will learn about the economic aspect of human trafficking and forced labour. By completing this Lesson, you should be able to familiar with:  major economic theories of human trafficking and cheap labour o demand theory o cost-benefit economic theory o migration theory  academic literature on human trafficking, such as o demand for cheap labour in various industries o supply chain management o the economic impact on victims Please read Chapter 4: section 4 and 5.1 to 5.3 (pages 120-123) of the text by Busch-Armendariz, Nsonwu, & Heffron. This opening video titled “Sold to the Sea: Human Trafficking in Thailand's Fishing Industry” provides evidence of human trafficking and forced labour in Thailand’s sea processing industry. As well, it offers an economic context of human trafficking and forced labour for the subsequent theoretical discussion. THE DEMAND AND SUPPLY PERSPECTIVE Do you know that the price of any product or service in the world is often determined by supply and demand? This economic principle provides a crucial context for studying the condition conducive to human trafficking and forced labour. In this section of the Lesson, you will explore the entire process in which many products and services we purchase regularly are likely from exploited labour. We, as customers, are often unaware of human trafficking and forced labour

associated with products and services. Through the reading, you will observe various stakeholders involved in the supply chain, and how human trafficking and forced labour are embedded within this chain. In doing the reading, please pay attention to the following:  the definition of supply chain  the definition of the price elasticity of demand (from the text by Kara, see page 70) o the price of the product, the cost of production, labour exploitation  the trajectory of how individuals are trafficked and exploited  connection between global competition of product price and labour exploitation  economic disparity between the global north and the global south  neoliberalism Please read Chapter 4  Busch-Armendariz, Nsonwu, & Heffron: section 5.7-5.8 (pages 127-129) and  Kara (2011) "Incentives Underlying Trafficking”, p. 69-71. The following video titled “Modern day slavery - Supply Chains” provides evidence of human trafficking and forced labour in different sectors around the world. Stop and Think After watching the video, in your opinion, what can businesses and consumers do to guarantee the things in our lives are genuinely slave free? It is worth paying attention to ‘neoliberalism’ mentioned in the text (see page 129), a core concept that contributes to our understanding of the growing global human trafficking. Although the author, Kara (2011) did not provide a definition of neoliberalism, it is necessary to understand its meaning in order to acknowledge its value in the study of human trafficking. According to Venugopal (2015:15), neoliberalism refers to ‘market deregulation, privatization and welfare-state withdrawal’. In other words, neoliberalism emphasizes free market and limited government intervention and regulation. Scholars have pointed out the connection between neoliberalism and human trafficking. For example, Peksen, Blanton and Blanton (2017) stated, “We find that economic liberalization in general significantly increases the likelihood of human trafficking for labour purposes…. We posit that the linkages between neoliberal policies and labor trafficking are common to all countries where labor trafficking exists, as these policies have a permissive role in the use of trafficked labor across a wide variety of countries.” Stop and Think

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Based on the statements above, why do you think that neoliberalism continues to perpetuate global human trafficking? THE COST-BENEFIT PERSPECTIVE Besides the demand and supply perspective, the cost-benefit perspective also contributes to the economic discourse of human trafficking and forced labour. This perspective has two main focuses. The first one concerns traffickers who assess whether the profit from human exploitation outweighs the risk of being prosecuted. The second one focuses on the comparison between costs associated with trafficking victims and costs of intervention and prevention. Trafficking victims face a number of costs due to the damage from abusive and exploitative conditions. Costs of intervention and prevention, on the other hand, refer to public expenditures on programs and policies that help victims to recover and combat trafficking. A core question from the second focus is whether policies and programs are worthy investments in comparison to the costs incurred by the victims. In doing the reading, please pay attention to identifying answers to the following objectives. Students should be able to understand:  the cost-benefit economic theory o benefits versus costs of trafficking (from the trafficker’s standpoint)  various types of costs associated with human trafficking o health care for the victims/survivors, law enforcement, prosecution, social services o lost wages, lost productivity  estimate economic impact of human trafficking o incidence-based: the costs incurred over a lifetime by individuals victimized in a given year o prevalence-based: the total cost impact across all individuals  effective anti-trafficking strategies that increase the cost and risk for traffickers o increasing law enforcement staffing and budgets and penalties for law violation o increasing funding for anti-trafficking police, prosecutor, and judges o improving services to rescued victims o providing incentives to self-rescue o coordinating trafficking efforts with other criminal activities (e.g., drugs, pornography, gang activity) o decreasing the demand of sex workers by educating males in general Please read Chapter 4:  Busch-Armendariz, Nsonwu, & Heffron 5.10.1-5.10.3 (page 121, pages 131-134) of the text and

 Kara (2011), “Bonded, Forced Labor, and Trafficked Slaves, p. 67-69 Stop and Think Considering the high profits of human trafficking, do you think that increasing law enforcement against trafficking activities and funding programs to free trafficked persons will be effective in the long run? Take a position and justify your reasoning. Implied, but not clearly stated, in the discussion of estimating costs is the idea that an important consideration when deciding whether to pursue an intervention is whether the cost of the intervention is less than the cost that will be incurred if the intervention is not implemented. While governments can’t fund every good idea and they have to make trade-offs, when, if ever, do you think that it is right to engage in such financial thinking when considering interventions to free slaves? BONDED LABOUR Bonded labour has become a buzzword in the literature on human trafficking and forced labour. Researchers and scholars have used the concept of bonded labour to describe an adverse condition facing those in an exploited work condition. Typically, people are forced to work in order to pay off their debt, a phenomenon known as debt bondage. You may be wondering about the conceptual differences among bonded labour, forced labour and trafficked slaves. You shall find out the answer through the additional required reading by Kara (see pages 67-68). In doing the reading, please pay attention to identifying answers to the following objectives. You should be able to:  identify conceptual differences among human trafficking, forced labour and bonded labour  make connections among human trafficking, forced labour and bonded  bonded labour in different sectors Conceptual Exercise In your own words, briefly describe the differences among human trafficking, forced labour and bonded labour. Next, draw a conceptual map to show their relationship visually. Finally, discuss why the boundary between forced labour and bonded labour is blurry. CASE STUDIES As you went through the reading materials, you have encountered many concepts emerging from the economic aspect of human trafficking and forced labour. Applying relevant contexts and

concepts to real-life case studies will enhance your learning experiences. This Lesson introduces two case studies: Case Study #1: Venezuelan Refugees Since the early 2010s, Venezuela has been experiencing political unrests due to bad economic policies and political conflict. This has become a major push factor for the mass emigration; thousands of thousands of civilians have fled to other neighbouring countries, such as Columbia, in search of food, work, and a better life. While many have been offered humanitarian assistance, other men, women and young children have been exploited. This case study exemplifies how a country’s economic crisis puts civilians who fled overseas at risk of human trafficking and exploitation. For details of this case study, please watch the following two videos. 1. “Venezuela: Thousands Fleeing on Foot” [2 minutes] 1. “Venezuelan Migrants Being Trafficked at Colombian Border” [2:31 minutes] Case Study #2: The Economy of Human Smuggling and Trafficking in Niger Niger, located in west Africa, is one of the poorest countries in the world. It has become a transit spot for Sub-Saharan African migrants who attempt to migrate to Europe through Libya. According to Hoffman (2017), a representative from United Nations High Commissioner for Refugees, this risky route has put migrants at risk of exploitation and even death. In response to pressure from European governments, Niger cracked down on local smuggling business. However, this legal action has impacted smugglers who relied on this business for financial survival. Therefore, they were forced to take alternative routes. With a riskier route, migrants had to pay higher prices in order to reach Europe. At the same time, traffickers filled the gap and thrived as the demand to go to Europe via Libya did not decrease. Abandonment in the Niger desert, violence and even death were often reported. This case study provides ample evidence to illustrate how regional economic disparity perpetuates human trafficking and exploitation. For the details of this case study, please read the following report and watch the following video : Report : African migration 'a trickle' thanks to trafficking ban across the Sahara . Stop and Think Compare the two case studies you just learned, what political and economic conditions combined increase individuals’ vulnerability to be trafficked and exploited? Prepare your responses in a short paragraph. This exercise will help you to brainstorm for your first written assignment: Response Paper #1.

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WHAT CAN WE DO AS CONSUMERS Do you know that we as consumers can exercise our agency to alleviate human trafficking and forced labour globally? Consumers are not powerless, but influential in impacting a corporation’s reputation. While we may not be in the frontline rescuing people from the terrible working condition, our decision and purchasing habits can certainly make a difference. The idea of sociological imagination you have learned from Lesson Three offers a relevant context for this discussion. Individuals’ consumer behaviour actually matters, as each one of us plays a part in shaping and influencing the overall well-being of those who utilize hard labour to meet the growing needs from consumers living in a privileged condition. With this awareness, you can now read more about this issue from page 71 of the text by Kara (2011). In doing the reading, please pay attention to identifying answers to the following objectives. You should be able to recognize:  consumers’ power in keeping business corporations accountable  the relationship among consumers, corporations, human traffickers and trafficking victims  corporations’ moral and social responsibility while manufacturing any products The following TED Talk provides an excellent example of how our daily purchase of ordinary items is intimately connected with slaved labour from around the world. While watching this video, think about how we as ordinary consumers can do to raise other people’s awareness of forced labour that is taking place somewhere in the world. Stop and Think What do you think about the idea of focusing on consumer activism as a means of addressing human trafficking and slavery? Can it be a practical means to make a difference or is it just a way to shift blame away from governments and business interests? Also, what do you think of the idea of laying criminal charges on retailers and consumers if they are found to have sold or purchased goods that they ought reasonably to have known were produced by slaves? CONCLUSION In this Lesson, you are exposed to human trafficking and forced labour in the economic context which adds a crucial aspect to the existing theoretical frameworks you previously learned. The economic context involves multiple stakeholders, including traffickers, trafficking victims, business corporations, governments as well as consumers. As you went through the reading, you

may have come to a realization that these stakeholders are connected within a contradictory relationship. That is to say, they rely on each other, but they also show conflicts of interests. The two case studies in this Lesson present real-life examples of how political turmoil and unfavourable economic situations heighten the risks of human exploitation in developing countries. We once again see how structural forces create favourable conditions for traffickers to take advantage of vulnerable individuals. In Module Two (from Lesson 5 to Lesson 9), we will explore more case studies of human trafficking and forced labour with the analytical and theoretical frameworks you have learned in Module One. To conclude this Lesson, I would like to show you one more video titled “Purpose & Profit - Episode 1: Forced Labor Risk from the Chocolate Supply Chain.” This video shows how businesses are also taking their own role and responsibility in reducing forced labour in the supply chain. Lesson Four Quiz After going through Lesson Four, please complete the quiz to test your own knowledge. This quiz is worth 2% of your total grade. You will ten minutes to complete six multiple-choice questions. REFERENCES Busch-Armendariz, N. Nsonwu, M., & Heffron (2018). Human Trafficking: Applying Research, Theory, and Case Studies. Chapter 4: The Economics of Human Trafficking (pp. 111-138). Sage Publications. Hoffman, M. (2017). Deadly trade through Niger snares refugees and migrants. United Nations High Commissioner for Refugees. Retrieved July 6, 2022 from https://www.unhcr.org/news/latest/2017/8/598427614/deadly-trade-niger-snares-refugees- migrants.html Kara, S. (2011). Supply and Demand: Human Trafficking in the Global Economy. Harvard International Review , 33(2), 66-71. Peksen, D., Blanton, S.L, & Blanton, R.G. (2017). Neoliberal Policies and Human Trafficking for Labor: Free Markets, Unfree Workers? Political Research Quarterly , 70(3), 673-686. U.S. Department of State (2021). 2021 Trafficking in Persons Report. Retrieved July 4, 2022 from https://www.state.gov/wp-content/uploads/2021/09/TIPR-GPA-upload-07222021.pdf Venugopal, R. (2015). Neoliberalism as concept. Economy and Society , 44(2), 165-187.

LESSON 4 HR 324

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