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John Hoffmire: Human trafficking: The economics and the disgust

Sara is a young, single mother living in Moldova. For the last two months she’s been looking for work with no luck. She reads an ad in the local newspaper that’s offering good paying jobs serving in restaurants in Italy. She calls the number and in a matter of weeks she has a passport in one hand and a suitcase in the other. She plans on sending money back to her mother who took charge of her son. Upon arrival to Italy, she is sold to a pimp for $4,000, raped, and beaten. She is then locked in an apartment and forced to have sex with five men a day, earning $1,400 a week for her pimp. She never writes to her family.

For our purposes, we define human trafficking as the trade of humans, most commonly for the purpose of sexual slavery, forced labor, or commercial sexual exploitation for the trafficker or others. Human trafficking happens when a person is coerced to move from one place to another in order to work for nothing (or close to it). The conditions are often dangerous and exploitive and many don’t survive long enough to escape.

As with Sara, the people who most often fall victim to human trafficking are migrants, wanting to immigrate to another country with the hope of finding better work. Victims often lack the skills necessary for a good job, are easily lured by risky opportunities, and have been misguided about the migration options and working conditions of their destination country. There are others, however, who aren’t looking for work at all. These could be kidnapping victims or children whose parents have sold them to traffickers for as little as $11.

The International Labor Organization estimated in 2005 that those involved in human trafficking yield a $150 billion profit every year. The business is lucrative, given that the average victim is bought for so little and brings in an average of $13,000 in profits each year.

These are just generic numbers; the specifics change according to the kind of work the victim does. For example, a victim working as a domestic helper generates an average of $2,300 profit each year. A sex worker victim brings in $21,800 of profit annually. These profit margins account for the shift many gangs and cartels are making from drugs to human trafficking. Drugs, after all, can only be sold once. A woman can be bought for $10,000 and make enough cash for the pimp to cover his cost in a week.

Location also influences the price of a person. In Moscow, women have been sold for $2,865 each. In Italy, a pimp can buy a woman from Brazil for $5,681, from Moldova for $3,977 or from Romania for $2,272. In France, a trafficker would bring in women from Brazil, force them to service up to five men a day for $207 each, making him $2.7 million a year. In Nigeria, a baby can be purchased for $2,650; $925 goes to the mother and $1,725 goes to the trafficker. A man reported being sold to work as a fisherman in Thailand for $616.

The demand for trafficked victims is affecting nearly every country, as the U.N., governments and NGOs are working to create systems that prosecute traffickers, protect victims and prevent trafficking from happening in the first place. Healthy economies are also an important part of preventing human trafficking. They create stable jobs and disperse wealth among the population. A healthy economy alone lowers the number of potential victims and emigrants leaving their homes in hopes to find better work elsewhere. We have a lot of work to do to both stop modern-day slavery and promote healthy economies.

John Hoffmire is director of the Impact Bond Fund at Saïd Business School at Oxford University and directs the Center on Business and Poverty at the Wisconsin School of Business at UW-Madison. He runs Progress Through Business, a nonprofit group promoting economic development. Jessica Cooper, Hoffmire’s colleague at Progress Through Business, did the research for this article.