Labor disparities across the world have gained attention recently, regardless of income level. In wealthy countries like the United States, recent elections have addressed the “losers” of trade, with the unavailability of ‘blue collar’ jobs taking center stage. In many lesser-developed countries (LDCs), workers are historically excluded from global supply chains due to lack of education or technological knowledge. A new approach to labor development may be revolutionary in providing workers entry (or re-entry) back into the labor market, and it is similar to a development buzzword: microfinance.
Employing ‘Micro’ in the Labor Market
To combat the challenge of lower-income people’s exclusion from access to capital, microfinance was created by Mohammed Yunnus and his colleagues at Grameen Bank. Just a couple of decades later, thousands of microfinance institutions are providing small loans to low-income populations, connecting them to capital markets and economic opportunity. The idea of splitting up a loan into bite-sized, accessible portions was revolutionary when it was proposed. In 2012, Leila Janah, founder of “Samasource”, begged the question—why not create a similar model for labor markets?
Janah recently spoke at the World Bank Annual Meetings in Washington, DC, and explained on a panel for cutting-edge innovation how a concept she created—microwork– is revolutionizing the labor market. She founded “Samasource,” a NGO from San Francisco that uses technology to break up the job of one highly-skilled worker into ‘bite-sized’ pieces. Workers worldwide, with only a knowledge of reading and writing in English, receive on-the-job training, and easily program one part of a digital role in the supply chain. By focusing on just one aspect, they pass on the job to the next person, who completes their specific role, and so on. The end result is fully programed technology that costs the same, if not less, as hiring a highly-skilled programmer. Many more people from the “bottom of the pyramid” are employed, and at higher wages than their peers.
Challenges with Microwork in LDCs
Of course there are many challenges to this approach, as any new idea in development. First and foremost is local ownership. Convincing people to take part in a new, unfamiliar technology poses a challenge. Samasource, while the most famous, is not the only organization exploring “Microwork.” In the scholarly realm it is referred to as “Impact Sourcing” (ImS). A study by Sandeep and Ravinshankar found that it is difficult for impact sourcing companies to translate their objectives to local communities, but framing the endeavor as mutually beneficial will give ImS ventures the most success possible. Samasource believes their role is simply to be a middleman. They compete for contracts with large tech companies, break up the work, and send the pieces to centers in lower-income countries. Local entrepreneurs who know their communities and have invested their own capital in the centers staff these centers. They complete the trainings and oversee operations to ensure ownership.
Another major challenge is access to technology. Samasource is based on the motto “Give work, not aid,” advertising that “all [workers] need are laptops, connectivity, and training.” While technology, especially mobile phones, are widespread in lower-income countries, there is still a digital divide that separates low-income populations from access to technology. Phone ownership is commonplace, but laptops are much more expensive. By requiring each worker to have his or her own laptop, Samasource risks rewarding the young middle and upper classes, and excluding the most disparate populations. Impact sourcing boasts business objectives in addition to a social component. It is designed to create social value by providing lower-income people access to markets they would not have access to otherwise. Samasource accounts for this social value through their extensive on-the-job training, but they (and other ImS organizations) should also consider financing necessary tools such as laptops.
A macroeconomic challenge to microwork is infrastructure development. Many countries in sub-Saharan Africa where Samasource works do not have access to the internet, or consistent electricity that allows them to complete their jobs on time. At the World Bank Meeting mentioned above, Janah appealed to policymakers not to view infrastructure as roads and bridges alone, but to provide connectivity through fiber-optic cables and a stronger electrical grid in lower-income countries.
Overall Impact Sourcing has proved effective in lower-income countries to provide higher-paying jobs to those who have ‘lost’ from globalization by exploiting the lucrative, globalized high-tech markets. However, in the past couple of years this model has also been accepted in high-income countries like the US with large populations of displaced workers due to globalization and outsourcing. Janah stated in an interview with Readwrite “I’ve been to parts of America like Mississippi where it’s as difficult to access high speed Internet as it is in Africa.” This infrastructure failure contributes to a domestic digital divide, and further separates populations from the high-tech labor market. Samasource and other companies are targeting the most at-risk populations in America (mostly in the Midwest and Rust Belt) where displaced workers are frustrated and have fueled the protectionist sympathies evident in our recent presidential election.
Challenges to Microwork in the American Context
The biggest employer of technological microworkers is Amazon Mechanical Turk. It lacks a social component, which categorizes it as a ‘crowdsourcing’ platform, rather than Impact Sourcing. It offers opportunities to complete ‘human intelligence tasks’ for small tasks for money, but with less structure. A 2012 article in the Portland Press Herald frames microwork as a self-employment mechanism, like Uber or dog-walking app Barkly: “”Crowd-sourced labor started off as this weird thing with people doing these funny little jobs in their spare time, but now it’s really catching on.” This approach, unlike Samasource’s, does not offer retraining skills or social value propositions. So while microwork does exist in the US, Samasource identifies the necessity of their nuanced model in addressing displaced workers.
While those who engage with microwork earn an income and new transferrable skills, there are still challenges that accompany this alternative approach to labor in the U.S. Microwork is nuanced and contract-based. For many displaced workers who may miss walking into a physical building every day, there is a cultural adjustment to self-starting each job and working on the computer, outside a physical space. Some workers may enjoy the independence, while others may feel further isolated. The establishment of microworker communities or meet-up groups could address this challenge.
A study that followed Amazon Mechanical Turk also found that workers may not be treated as fairly, especially as they are non-salaried and do not physically interact with their superiors. Jorg Flecker’s book “Space, Place and Global Digital Work” also reports that microworkers are less likely to create collective action, leading to exploitation. Samasource calls for those involved in Impact Sourcing to remember their social bottom line, as well as financial. Microwork, in the way Samasource originally founded it, is meant to lift communities out of poverty through access to the modern, digitized labor market. Social investments may need to be made in the communities of impact sourcing (such as health care access, financing local schools etc.), even when it does not maximize profitability.
Microwork, when carried out creatively and responsibly, is an effective approach to disparities in the global labor market. The target population—those who have ‘lost’ from free trade in both high and low-income countries—has seen an increase in income, as well as social capital through digital training. During a time of free trade skepticism, development solutions like microwork offer an alternative narrative, that personal losses from globalization may present new opportunities for growth.