Inequality Redux III

Fighting slavery, flaming labour exploitation?

Genevieve LeBaronGrowing wealth and power inequalities between classes, and between business and workers, is fuelling labour exploitation.  And the UK’s Modern Slavery Bill – set to become law in March 2015 – will do little to stop it.  Forced labour is not an isolated issue separable from labour exploitation more generally.  Both are driven by inequality and need to be addressed in that context.

In the context of soaring wealth and income inequality, labour exploitation has reigned.

As Steven Greenhouse recently argued in the New York Times, rising income inequality has been spurred by workers’ falling share of profits.  And, as workers have earned less – and in the context of declining unionisation and high unemployment – they have become less powerful (both individually and collectively).  Study after study has documented falling real wages and rising rates of exploitation across many sectors over recent decades.

The link between rising inequality and labour exploitation is intuitively obvious: the poorer that people get, the harder it is to command a fair wage for their work.  And this is compounded by unemployment: the more difficult it is to find a job, the more fearful workers become to exercise labour rights, or leave an abusive employer.

With wealth and income inequality continuing to soar, and global unemployment set to worsen further (the International Labour Organization predicts 215 million people will be unemployed by 2018), labour exploitation is set to deepen – not disappear – even as corporations post record-breaking profits.  The reality is, labour exploitation is now a widespread and endemic element of modern industry.  What’s more, the ability of business to exploit workers seems to be enhanced by upward redistributions of wealth that are leaving working populations with a smaller and smaller share of the pie.

As a string of reports, including in recent years the World Economic Forum’s Global Risks Report, have sounded an alarm about workers’ declining income share and the perils of the ‘jobless recovery’, an interesting thing has happened.  A wave of governments – including those in the UK, US and Canada – have become champions of the cause of combatting ‘modern slavery’, including forced labour and human trafficking for the purposes of labour exploitation.

The UK and US governments have been at the forefront of these ‘new abolitionist’ efforts.  UK Home Secretary Theresa May recently declared: ‘We must step up the fight against modern slavery in this country and internationally to put an end to the misery suffered by innocent people around the world’.  Similarly, in a recent speech in the US, President Obama claimed that ‘our fight against trafficking is one of the greatest human rights causes of our time, and the United States will continue to lead it’.

Forced labour has long been nominally illegal in all countries.  But, in the aftermath of the 2007-8 financial crisis, governments have passed a wave of new legislation to combat slavery and forced labour.  Canada’s Harper Government established its National Action Plan to Combat Human Trafficking in 2012, while California passed its Transparency in Supply Chains Act (SB-657) in 2010 and the US federal Business Supply Chain Transparency on Trafficking and Slavery Act (HR 4842) was introduced in 2014.

In the UK, the Conservative Party is championing the 2014 Modern Slavery Bill (set to become law this very month) as a ‘historic bill to help stamp out modern slavery’ and a key achievement during its recent term.  Indeed, it has been heralded by the Home Office as ‘the first of its kind in Europe, and one of the first in the world, to specifically address slavery and trafficking in the 21st century’, thereby reflecting ‘the Government’s determination to lead the global fight against modern slavery’.

There is no doubt that the problem of forced labour is important.  The International Labour Organization estimates that it ‘generates annual profits of US$150 billion’ worldwide.  Within the UK, official statistics report 1473 cases of modern slavery in the country last year alone.  And a new government study estimates the ‘full scale’ of modern slavery in the UK ranges between 10,000 and 13,000 victims.  These practices involve severe and often physically harmful forms of labour control and exploitation, from which workers cannot exit, and so are unquestionably deserving of our – and the UK government’s – attention.

But, importantly, even if the Modern Slavery Bill, which focuses on higher fines and criminal justice consequences for perpetrators, is successful in protecting victims of forced labour (and there are many reasons to worry it will be a ‘lost opportunity’), the reality is that it covers only a tiny percentage of the labour exploitation that is currently thriving in the UK market.

Furthermore, one can’t help but notice that the same governments which are passing measures to eradicate forced labour are also responsible for the political economic policies that have bolstered the power of employers to inflict illegal and severe human suffering in modern industry.

For instance, as a recent study of forced labour in the UK’s construction, cannabis and food industries revealed, ‘the UK economy has a number of elements which create vulnerabilities in people which may then allow for forced labour’, including the ‘light-touch’ regulation of business and the general lack of labour standards enforcement, ‘which creates a sense of impunity for employers’.

If we accept inequality as a driver of exploitation – and it’s surely impossible not to – then it is striking that the same political forces which are now passing legislation to ‘eradicate slavery’ have also enacted economic and social policies that have deepened labour market inequality and exploitation, facilitated growing class and wealth inequality, and contributed to growing power disparities between workers and employers since the crisis.  It is almost as though the more widespread that labour exploitation has become, the smaller the group of people that governments are trying to save from it becomes.

Measures to address forced labour are necessary and welcome.  But the current framing of forced labour as an isolated issue that can be neatly severed from labour exploitation, more broadly, deflects attention from more widespread problems in relation to labour market governance in general.  These include policies that fuel ‘ordinary’ labour exploitation.

Dealing with labour exploitation will, at a minimum, require: enhancing social protection to reduce vulnerability; measures to reduce the forms of poverty that prompt workers to enter into risky and informal jobs; and stopping the assault on wages, benefits, pensions and bargaining.  Bolder and more proactive solutions might include – as Guy Standing has convincingly argued – a class-based charter guaranteeing universal basic income; or, bolder still, a shock redistribution away from the 1% of the kind effected by the First World War.

Both ordinary labour exploitation and ‘modern slavery’ share one key driver: inequality.  No political forces to date have mustered the courage or bold thinking necessary to confront this huge problem.  But, until they do, labour exploitation has little prospect of abating.