Measuring labour exploitation. Why bother and how should we do it?

Competition and cost pressures can push businesses to cut corners; poverty, poor knowledge of rights and immigration status leads to vulnerability of workers.

Labour exploitation is the result of many factors – competition and cost pressures can push businesses to cut corners; poverty, poor knowledge of rights and immigration status leads to vulnerability of workers.

But by its nature, labour exploitation is hidden. Those benefitting from it are not advertising the exploitation of their workers. And exploitation is varied – it exists on a spectrum, from accidental and relatively minor infringements (eg failure to provide a payslip) to deliberate and serious crimes (e.g. modern slavery in the form of forced labour).

So how should we measure labour exploitation? And what are the benefits to measuring it?

Why bother measuring labour exploitation?

Measurement helps us to advocate for the resources necessary to remedy the root causes of labour exploitation and to provide adequate support to victims.

This is because:

1. Media and politicians treasure what they can measure.
   Ministers and the press focus on GDP (Gross Domestic Product) in part because increasing economic output is valuable, but also because it is measurable. Greenhouse gas emissions too are measurable. Covid cases = measurable. We hear about these metrics frequently, often accompanied by what government is (or is not) doing to improve the situation. If we are to convince government and industry to focus on the issue of exploitation, then we are best placed if we provide consistent metrics to highlight the evolution of the problem over time.
2. Measurement allows for better assessment of policy interventions.
   If you know how many workers did not receive a payslip in 2020, subsequently roll-out an online payslip template for SMEs in 2021, and then measure the rate of no-payslip in 2022… then you can get some sense of how successful that policy intervention was. Determining causality is always tricky – for example, assuming payslip provision rose, was it the new system that led to the increase or another factor like greater enforcement by labour inspectorates? But if designed well, then robust measurement can give you a tool to distinguish between effective and ineffective policy, enabling enforcement bodies and civil society organisations to refine their approach over time.

How should we measure labour exploitation?

This is the hard part.

The GLAA states upfront in its 2017 report on the Nature and Scale of Labour Exploitation that ‘the prevalence of labour exploitation is difficult to accurately measure’.

Measuring modern slavery

For modern slavery – which includes severe forms of labour exploitation such as forced labour, debt bondage labour and domestic servitude – there have been a couple of attempts to measure the scale of the problem in the UK. The Walk Free Foundation’s Global Slavery Index publishes a UK figure of victims based on estimates in other countries. The Home Office in 2014 provided an early estimate of victims to inform the Modern Slavery Act 2015. Both are considered unreliable (although well-intentioned) by the Office of National Statistics (ONS). There is a newer National Data Analytics Solution model which uses machine learning to scour police documents and tries to identify previously unreported modern slavery events. Extrapolating from this model’s application in the West Midlands, the Centre for Social Justice gives an estimate of near 100,000 victims of modern slavery in the UK. But this tool is a work in progress.

The ONS has instead focused on developing a series of ‘indicators’, rather than providing an overall figure of victims:

• police recorded modern slavery offences
• suspected modern slavery cases reported to the National Referral Mechanism (NRM)
• victims accepting support by UK charities through the NRM
• defendants prosecuted for offences relating to modern slavery
• cases identified through the Modern Slavery Helpline.

Where possible, figures for each indicator are split into the categories of labour exploitation, domestic servitude, sexual exploitation, criminal exploitation and organ harvesting. You can find the most recent modern slavery figures for each indicator here.

There are limits to the ONS indicators too which almost definitely leads to underestimation of the issue. Some police forces are well-trained to record modern slavery offences, but others aren’t. Many businesses and members of the public will not be aware of the tools available to report suspected cases of modern slavery. And many victims do not come forward because they are afraid of the consequences.

But it is the best we have currently for modern slavery. And while it does not provide an overall figure of victims, it does provide us with a useful framework to measure exploitation: via a set of unique but related indicators.

Might we be able to construct and publish a set of indicators for less severe forms of labour exploitation?

Current metrics to help measure labour exploitation

Public bodies do a really good job measuring:

1. Underpayment of the minimum wage
   
   BEIS publish an estimate of minimum wage non-compliance each year, utilising data from the Office of National Statistics and HMRC. The Low Pay Commission subsequently publishes analysis on minimum wage underpayment each year, with policy recommendations for the Government.
   
   There’s room to improve of course – for example, there is currently no attempt to measure minimum wage non-compliance in the informal economy. But these reports and the underlying data are an excellent resource for academics, NGOs and policymakers.
   
   But most other types of labour market abuses are not given the same level of attention. It is only through the efforts of dedicated non-governmental organisations that the incidence of other abuses is occasionally quantified and reported.
   
   The Resolution Foundation uses existing government datasets in a 2019 report to highlight labour abuses, including:
2. Holiday pay avoidance.
3. Failure to receive a payslip.
   
   And FLEX uncovered a number of issues experienced at work in discussion with hospitality workers, including:
4. Inaccessible sick pay.
5. Dangerous conditions.
6. Unpaid overtime.
7. Not being paid on time.
   
   Other labour enforcement issues have been identified but not quantified. For example, the Office of the Director of Labour Market Enforcement (DLME) commissioned research into ‘at-risk’ sectors, including warehousing and restaurants, and found further key issues in labour markets included:
8. Inability or issues around taking breaks.
9. Lack of written contract or statement of employment particulars.

Improving measurement of labour exploitation

If a public agency regularly published a set of statistics on these nine indicators of labour exploitation via an accessible platform, then we would get a much better sense of the scale of labour abuses in the workplace.

Given that the Immigration Act 2016 established an Information Hub within the DLME to ‘gather, store, process, analyse and disseminate information relating to non-compliance in the labour market’, it might be best placed to house these statistics.

But many of these labour market abuses will be impossible to accurately measure without additional investment. A report in 2019 commissioned by the DLME concluded that a worker survey accompanied by in-depth interviews or focus groups would be the most effective approach to fill information gaps associated with labour market non-compliance in the UK. But collecting this data will not be cheap.

So, the Government should:

• Recruit the next Director of Labour Market Enforcement, a position which has been vacant since January 2021.
• Fund the development of a new worker survey that can robustly measure the nine labour market abuses identified (excluding those covered by existing surveys).
• Publish publicly accessible annual statistics on all nine labour market abuses via the DLME’s Information Hub.

These measures will help:

• the media and public to understand the scale of the problem
• the Government to recognise the value-for-money proposition of investing further to tackle labour exploitation
• policymakers to evaluate the impact of enforcement and policy changes on non-compliance
• encourage businesses to weed out exploitative practices within their operations and that of their suppliers.

And most importantly it will help prevent exploitation of workers.

Shiva Foundation aims to tackle systemic inequity in the UK and India. It does so by creating tools for businesses, by providing expertise for impactful policy advocacy, and facilitating collaboration across government, business and civil society. Shiva Foundation’s hospitality work includes the development of the Stop Slavery Blueprint, a tool for hotel managers to address modern slavery risk within their business and supply chains.