The International Labour Organization (ILO) has published Acting Against Forced Labour: An Assessment of Investment Requirements and Economic Benefits (September 2024), a preliminary study towards quantifying the economics of forced labour. The report is part of broader ILO research to understand the economic drivers behind forced labour in order to better address it.
Human Level’s Take: The world is failing to end forced labour. In 2021, there were 27.6 million people in forced labour—an increase of 2.7 million since 2016. And forced labour is not just harming the individuals who are victims of it. Previous ILO research has estimated the high economic and social costs of forced labour, wherein incomes and revenues are lost to exploitative employers and recruiters. Now the ILO has compiled data suggesting that the economic benefits of ending forced labour globally would far outweigh the costs needed to prevent it, stop it and remediate it. The ILO outlines two types of interventions: those directly addressing forced labor and those creating supportive legal and policy frameworks, as well as ten specific strategies for prevention, protection, and remediation. The estimated investment needed to combat forced labor is $212 billion, approximately 0.14% of global GDP, and inaction will only escalate costs. Ending forced labor could boost the global GDP by $611 billion, driven by increased earnings and economic activity from reintegrated victims, along with benefits like improved worker health and innovation. It’s clear that companies have an important role to play through strategies like enhanced due diligence in high-risk sectors and geographies, oversight of their own and their suppliers’ recruitment pathways, paying fair wages, respecting workers’ rights to unionise and collectively bargain, remediating recruitment fees and other costs of exploitation, and using their influence to tackle the systemic causes of forced labour.
Key points from the report:
- No time for delay: The ILO reports that 27.6 million people were in forced labour on any given day in 2021—an increase of 2.7 million people since 2016. This increase reflects a failure of the international community and the private sector to end forced labour by 2030, in line with Target 8.7 of the Sustainable Development Goals (SDGs). As the world grapples with the polycrises of climate change, nature loss, growing inequality and conflict, these crises increase the risk of forced labour. According to the ILO, “investment in action against forced labour has, therefore, never been more urgent.” In its report the ILO explores two components that could help to end forced labour: the cost of action towards ending forced labour through targeted interventions, and, on the other hand the economic benefits that would arise from ending forced labour. Though the report cautions that the data is still preliminary, the research suggests that the costs of action would be far outweighed by the economic benefits.
- Investment requirements for action against forced labour: The ILO examines two types of interventions: first, interventions directly targeting forced labour and the people in forced labour, and second, those that can create a better legal, policy and institutional enabling environment to tackle forced labour. Across these two categories, the report identifies ten types of interventions aimed at preventing, protecting and remediating victims of forced labour. Examples of interventions include prevention through awareness-raising campaigns targeted at the general population and at-risk populations, the media, and employers in high-risk sectors such as those where informal and migrant labour prevails. Prevention can also take place through orientation seminars, briefings and online platforms for migrant workers to raise awareness of their rights and the mechanisms to get out of forced labour. Measures to protect victims include developing complaints mechanisms to help victims seek protection and remedies; training front-line service providers and consular officials to recognise the signs of forced labour and assist victims; and establishing national referral mechanisms to provide a pathway to resources and support for victims. Other interventions are designed to remediate forced labour through providing legal support to victims, training for judiciary staff, labour inspectors and law enforcement, and better coordination among the relevant government agencies. The estimated total investment requirement is $212 billion, which is approximately 0.14% of global GDP. With the rising rate of people in forced labour, delaying action to tackle forced labour will only increase costs over time.
- Economic benefits of ending forced labour: The ILO maps out the pathway for an increase in GDP from ending forced labour: when former forced labour victims are integrated into the regular labour market, their income rises and so does their contribution to the economy. This is followed by multiplier effects as the benefits ripple throughout the economy, spurring on a further increase in aggregate demand for goods and services and labour output. Other benefits contributing to a stronger economy could include improved workers’ health, more investment in skills and capabilities, increased investment in innovation and productivity, and a level playing field for business. Overall, the ILO estimates that the total demand-driven increase in GDP would amount to $611 billion, or 0.41% of global GDP.
