Labor Migration as a Human Supply Chain

By Lambert Strether of Corrente.

I had thought this post would turn out to be a review of the literature, but I can’t deliver on that, exactly, as I am about to demonstrate. When I read that a coyote referred to the migrant he was smuggling as a “package,” I was immediately reminded of the Atlantic slave trade, with its human “cargo.” It has always seemed reasonable to me to conceptualize the Atlantic Slave Trade — the triangular trade — as a supply chain, perhaps because I write about shipping and supply chains a lot. And so it seemed reasonable to conceptualize the structure behind our current “migrant justice” discourse in the same way: A human supply chain. This would have the advantage, by focusing on the international working class as a whole, of avoiding siloed victimology narratives[2] like “forced labor” — what, exactly, is not forced about the global norm of wage labor? — perhaps opening the door to less tendentious discussions of migration policy. As it turns out, that approach has problems. To begin with, the categories on labor migration are bad, meaning that the numbers are bad. From the UN International Organization for Migration’s (IOM) data portal:

There is no internationally accepted statistical definition of labour migration. However, the main actors in labour migration are migrant workers, which the International Labour Organization (ILO) defines as:

“… all international migrants who are currently employed or unemployed and seeking employment in their present country of residence.” (ILO, 2015).

The United Nations Statistics Division (UN SD) also provides a statistical definition of a foreign migrant worker:

“Foreigners admitted by the receiving State for the specific purpose of exercising an economic activity remunerated from within the receiving country. Their length of stay is usually restricted as is the type of employment they can hold. Their dependents, if admitted, are also included in this category.” (UN SD, 2017).

While migrant workers are often also international migrants, not all are… It is important to note the difference between the definition of a foreign migrant worker and an international migrant. An international migrant is defined as:

“any person who changes his or her country of usual residence” (UN DESA, 1998).

We can, however, get the big picture of the scale of migration globally. Again from the IOM:

So it turns out that globally the United States is, er, exceptional — assuming the numbers aren’t so bad as to completely distort our role — for reasons I won’t speculate on today. Rounding freely, we have 50 million migrants[3] in the United States in toto, abstracting away all the categories like legal, illegal, asylum seeker, economic migrant, and so on.

And here are the countries our migrants come from, as of 2017. From Pew Research:

(This is our stock, as it were; flows differ year-to-year. The 1800 families in the current “family separation” controversy are from Central America, not Mexico.)

Still at the same level of abstraction, if we use “working age” as a proxy for “working class,” we can guess as the scale of labor migration into the United States:

(Note from the caption that the the blue bubbles are percentages, not absolute numbers. Globally, most migrants are working age. It’s just that in the United States we have many, many more of them.) 75% of 50 million is ~37 million working class migrants.[4] Again, we can think of all the categories (legal, illegal) as different aspects of the same supply chain, in the same way that different cargoes have different materials handling and paperwork requirements. These would be impressive numbers, even if we were talking about retail goods moved in shipping containers.

With all this as background, I was excited to review the literature on labor migration as a human supply chain. So I started, and came up with material like this, from Logistics Management:

LMS: Optimizing the human supply chain

It’s no secret that labor costs eat up a big part of any company’s bottom line. And unlike some other major expenses—the cost of raw materials, overhead and utilities—human productivity can be extremely difficult to gauge, control and optimize. Without the right tools in place, warehouse managers choose to fly by the seat of their pants when it comes to “human supply chain” management, hoping that their tactics pay off in the long run.

Now for the good news: Technology has put effective labor management within reach for companies of all sizes and across all industries.

No. A “human supply chain” for managing workers within the firm is not what I want; in fact, perspectives from within or between firms seems to be a common element shared by most people using the term. Take this, from Verité:

Bottom of the Supply Chain: The Tipping Point for Migrant Worker Policies

Have we reached a tipping point in promoting ethical recruitment in global supply chains?

I think it’s pretty safe to say that we have not—but there has been a lot of good work recently among global companies and the private sector on the subject, most of it focused on the recruitment fees charged to workers.

The recent migrant worker policy adopted by Patagonia, the US outdoor clothing company, is a case in point. It explicitly prohibits suppliers from charging fees, expenses or deposits to workers for recruitment or employment services, echoing similar policies adopted by Apple and HP in the electronics industry late last year… After so many years on the margins, unethical recruitment practices and related issues of debt bondage and forced labor are now taking center stage in supply chains, and industry and multi-stakeholder initiatives involving business.

No. Verité escapes the victimology trap by focusing on recruitment as such, by firms, which applies to all workers across the board, but they consider the workers as inputs to the global supply chain of manufactured goods, and do not consider the supply of those human inputs (“cargo,” “packages”) as constituting a supply chain in and of itself. Hence they can only think in contractual, and not class terms. (It’s a bit like trying to dope out the supply chain for the iPhone by examining bills of lading.)

Or this, from HR Today:

The Human Supply Chain

In Talent on Demand, [Wharton management Professor Peter Capelli] espouses a strategy of asking questions about human capital requirements that borrows from the questions supply chain managers typically ask, such as “Do we have the right parts in stock?” or, “Do we know where to get these parts when we need them?” and, “Does it cost a lot of money to carry inventory?”

Asking such questions leads to simulations or scenarios that provide a more compelling way to assess uncertainty than the traditional static forecasting model. For example, take the question about inventory. With talent management, organizations will often say they have a “deep bench.” Yet a deep bench in a supply chain is a costly way of preparing for demand. “The same applies to traditional succession management—you’re paying people to essentially ‘sit on the shelf,’ ” says Capelli.

Instead of targeting a specific person for a particular job five years down the line, Cappelli recommends creating a diversified pool of talent. He borrows this concept from portfolio management theories, an approach whereby the risks of certain investments falling in value are, ideally, offset by different investments that will rise in value.

No. Executive “talent management” by the firm is not my use case. (This is a bit like trying to dope out the supply chain for the iPhone by an org chart.)

And then there’s this, from Information Week:

Optimizing the Human Supply Chain

In its “workforce optimization” initiative, IBM is taking a supply chain management approach to solving these problems, cataloging skill sets as human inventory and applying the same supply chain technology used for the company’s hardware to respond quickly to short-term needs and plan for long-term demands. This approach makes sense, says Bruce Richardson, chief research officer at AMR Research. “As happens in a supply chain, you can find you have too much of one ‘product’ and not enough of another in the labor chain,” he says.

When IBM started the project in 2004, the company saw that the first barrier to development of a common “skills-supply” database was a lack of common language to define skills and job roles — a “manager” in one division might be a “leader” in another, for instance. IBM developed a skills taxonomy structured on a hierarchy of 500 job roles and skill sets. In the short term, it planned to use that taxonomy and ETL tools to translate skill data into a common language when loading the new database. In the long term, the taxonomy would drive standardization in job descriptions. All 320,000 IBM employees will be identified by mid-2006 and, once subcontractors and suppliers are added, IBM expects to have one million individuals represented in the database.

No. Professional “skill data” by the firm is not my use case. (This is a bit like trying to dope out the supply chain for the iPhone without looking for the suicide nets.)

And then there’s this, from Jeremy Prepscius of BSR, a sustainability consultancy, in GreenBiz:

Transnational migration is a market, of course: labor supply (made up of migrants) fills the labor demand of employers. In a functioning marketplace, demand and supply meet and reach an agreement on price (in this case, wages, benefits and working conditions) within the guidelines of the law and other contexts, such as collective bargaining agreements.

However, this labor-migration market is failing because the basics of a market relationship are not happening. This failure has serious consequences, which can involve human trafficking, forced and bonded labor [victimology], and human rights violations.

Why is this market failing? The key to any market correctly operating is information — both buyer and seller, or employer and employee, need to understand the bargain they are striking. In this case, however, migrants all too often lack the information necessary to make informed decisions, raising the risk of exploitation.

Employers are often in the same boat, lacking information about their new hires and the recruitment processes that bring them to the employer. Information arbitrage, where the middleman exploits these gaps in knowledge, exists at many steps in the recruitment process and is often connected to graft, corruption and exploitation of the migrant.

As this market crosses borders and regulators, local actors often put their interests above broader market needs. Consequently, a well regulated, functioning market is very difficult. When this market fails, the weakest actor — the individual migrant — suffers most, as he or she bears the vast majority of the costs, in the form of debt, deportation or other consequences.

Businesses can overcome these market failings, but this requires investments that are neither easy nor free. However, leading companies are taking these steps, including instituting due diligence on and monitoring recruitment agents, conducting interviews with migrants, shifting migration costs from migrant to employer and repaying debts incurred by migrants.

These steps help avoid bonded labor, ensure successful migration experiences and protect the rights of migrants. And these steps can create significant business value, such as reputational enhancement with customers, risk mitigation and workforce retention.

No, though this is about as good — and as neoliberal — as it gets (even though the phrase “human supply chain” is not used). I don’t agree that “The key to any market correctly operating is information.” For one thing, “correctly” is doing a lot of work in that sentence. For another, the key to the way markets operate is not information, but power. I mean, does Prepscius really believe that “reputational enhancement…, risk mitigation[,] and workforce retention” pose “significant business value” when put beside profit?

All of which brings me to the single, solitary on-point source I was able to find: Fordham’s Jennifer Gordon’s “Regulating the Human Supply Chain,” 446 Iowa Law Review, Vol. 102:445-503 (pdf)[5]. I highly recommend that anybody who has read this far give Gordon a look. From the abstract:

In 2015, the number of migrant workers entering the United States on visas was nearly double that of undocumented arrivals—almost the inverse of just 10 years earlier. Yet notice of this dramatic shift, and examination of its implications for U.S. law and the regulation of employment in particular, has been absent from legal scholarship.

This Article fills that gap, arguing that employers’ recruitment of would-be migrants from other countries, unlike their use of undocumented workers already in the United States, creates a transnational network of labor intermediaries—the “human supply chain”—whose operation undermines the rule of law in the workplace, benefitting U.S. companies by reducing labor costs while creating distributional harms for U.S. workers, and placing temporary migrant workers in situations of severe subordination. It identifies the human supply chain as a key structure of the global economy, a close analog to the more familiar product supply chains through which U.S. companies manufacture products abroad. The Article highlights a stark governance deficit with regard to human supply chains, analyzing the causes and harmful effects of an effectively unregulated world market for human labor.

That’s the stuff to give the troops! And here is a worked example, from page 472 et seq. I apologize for the length, but it’s lovely because all of the links in the chain are displayed:

B. WHERE HUMAN AND PRODUCT SUPPLY CHAINS MEET: AN EXAMPLE

B. WHERE HUMAN AND PRODUCT SUPPLY CHAINS MEET: AN EXAMPLE

Apple Fresh is a (fictitious) apple cider maker in Washington State…. Like all employers, Apple Fresh is responsible for ensuring that its employees’ wages, benefits, and working conditions comport with legal and contractual minimums. It must also pay social-security premiums on its employees’ behalf and cover their unemployment and workers’ compensation insurance. … As part of its effort to meet those demands, Apple Fresh decides to outsource its apple pressing to one of several food processors in the market, Presser Inc., which can produce the cider more cheaply and efficiently. Once it signs a contract with Presser, Apple Fresh is released from responsibility for the social insurance and many of the working conditions of the workers who press its apples, because it is no longer their employer. Presser now bears those obligations. …

In year two of the contract, Presser decides to try to decrease turnover and increase its profit margin by using temporary migrant workers to staff its plant. Its owner had been contacted not long before by the U.S. agent of a labor-recruitment firm in Mexico City…

Oooh, lookie. Rent-seeking intermediaries!

… to discuss the advantages of contracting the firm to hire H-2B migrants, including lower costs and a steady supply of uncomplaining workers. Presser’s human-resources department calls the agent and asks him to begin the recruitment process. The agent in turn contacts the firm in Mexico City, which has sub-agents in a Mexican state capital, who work with brokers in rural areas to sign up would-be migrants. As the migrants travel up this chain, each of the agents demands a side payment from them, on top of the cost of the visa and travel expenses. By the time the workers arrive at Presser’s plant, they owe high-interest lenders over three months’ salary to pay back the loans they took out to cover the charges. These fees are all in violation of Mexican law, but none of Presser’s recruiters has been penalized, both because the law is rarely enforced, and because the principal recruitment firm blames “unauthorized individuals” for the violations.

The migrants are well aware that to make good on their loans and begin to earn the money that their families back home are expecting they must not displease their supervisors at Presser. If the migrant workers do complain, and are fired, they are immediately subject to deportation, because their visas are valid exclusively to work for Presser. In that sense, Presser can rely on U.S. government enforcement of immigration law as an additional mechanism of control over its labor force, whether it or the recruiter makes the call to the government….

When the law releases Presser from liability for the actions of labor recruiters that provide it with indebted workers, liability that Presser would have borne if it recruited the workers directly, it allows Presser—and Apple Fresh and the retailers that purchase its cider—to shed costs and (potentially) increase profits without paying the price for the means through which these benefits come to them. Their lack of responsibility is a legal fiction. In fact, both Presser and Apple Fresh have actively chosen to subcontract aspects of their business because the combination of private contracting arrangements and public laws about immigration control and liability for the treatment of migrants and workers allows them to benefit from the decision to outsource a firm function without bearing the true cost. Neither, however, is likely to benefit much from this decision, beyond the ability to stay in business…. The degree to which Presser and other actors profit depends on how much cost pressure there is from above them in the supply chain. If the top firm in the supply chain is demanding much lower prices from them, the move to using temporary migrant labor may just allow them to stay afloat.

“[T]he top firm in the supply chain….” Hell-o-o-o-o, Walmart! Hell-o-o-o-o, Amazon!

* * *

Quod erat demonstrandum, labor migration as a human supply chain. Gordon has policy recommendations[6], as well, and perhaps we’ll look at them at a later date.

NOTES

[1] In the famous Zong massacre, the “cargo” was thrown overboard for the insurance money (back in London or Liverpool, because yes, there is always a financial angle). Note the fetters in J. M. W. Turner’s The Slave Ship:

I wonder if “packages” are insured as well. A topic for further research!

[2] Of course, human trafficking is bad, and 20.9 million people (estimated) should not be subjected to it. Ditto “family separation.” But to focus only on “victims” is a lot like focusing on how to save “poster child animals” like the polar bear, synecdoche that erases the presence and action of the larger, changing climate system of which the polar bears are only a part. And that system needs to be changed, whether the polar bears are saved or not! Sure, sometimes the poster animals (or babies) are useful for fundraising, but when the institutions supported are siloed and they too erase the larger system, they can be actively destructive.

[3] This is close to the Migration Policy Institute’s estimate of 44 million.

[4] Certainly a lowball estimate. A fraction of those of working age will be professionals, a tiny fraction will be wealthy individuals investing in real estate, etc. Outweighing them will be the families of working class workers, who are themselves working class, whether they work or not.

[5] Fordham, University of Iowa Law Review… It is not uncommon for the real work to be done outside the confines of Yale and Harvard; one thinks immediately of the University of Missouri at Kansas City, the epicenter for MMT. But do look at Gordon’s CV; it’s impressive.

[6] I bet a lot of those migrants at Apple Fresh have babies as well. What do you think?