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Minimum wages on online labour platforms

A response to the ETUI and IG Metall’s request for comment. Download the PDF at:

Wood, A., Graham, M., Anwar, M. A., Ramizo, G. 2017. Minimum wages on online labour platforms. Oxford Internet Institute.

Background

Some members of our research group have recently completed a three-year study of workers on online platforms who live in Africa and Asia (140 interviews; > 600 survey responses; and six months of transaction data from one of the world’s largest platforms)1. Our research into this topic continues in two ongoing five-year projects2. The platforms that we looked at were global in nature, and in this response we focus on ‘non-geographically sticky work’ (i.e. ‘crowdwork’ or work that can, in theory, be done from anywhere).

Introduction

Based on our research, we believe that any discussion of platform minimum wages is worth foregrounding with a few key points. First, for our Southeast Asian and Sub-Saharan African respondents, it was clear that pay rates were not the most important issue relating to the quality of their jobs. In fact, the pay rates were often significantly higher than what was available locally and were often considered to constitute decent pay. More important issues to emerge from our qualitative interviews and supported by our survey research were the limited social contact which workers experienced, that they often worked long or irregular unsocial hours at intense speeds, that many felt they had at little security and some had low incomes. Nevertheless, the downward pressure on pay rates created by the individualised and competitive design of online labour platforms contributed to these outcomes. However, they were also due to an oversupply of workers relative to clients meaning that there were inadequate earning opportunities to meet the needs of all workers and this in turn generally weakened the bargaining position of workers. Therefore, while implementing minimum wages on online labour platforms might alleviate some of these problems by increasing pay rates at the bottom, doing so might also exacerbate these problems by reducing the supply of clients (by making the platforms less attractive) while increasing the supply of workers (by making the work more attractive). Thus any intervention to increase a platform’s pay rates would require increases in the quality of the services provided in order not to reduce demand and exacerbate the weak position of labour.

Second, our empirical research highlights how the competition on many online labour platforms is international. What is more, we find that many workers perceive themselves as threatened with replacement by workers in other countries who are able to work for less due to the lower cost of living in that country. This international aspect is a key consideration in thinking about minimum wages, as any intervention is likely to unevenly affect workers living in diverse contexts. For example, a minimum wage set at North American or Western European levels would erode the comparative advantage of workers in lower income countries. This is not to suggest a race to the bottom in wages, but rather a need to make sure that minimum wages do not become an overly protectionist measure at the cost of workers in the Global South.

Third, our research has detailed that some platforms have implemented global minimum wages - mainly as an attempt to ensure quality by pricing out low-quality workers. However, a major issue with these minimum wages is that they relate only to hourly paid work when much of the work is paid on the basis of a fixed price per project. This means that the effective wage can be below the minimum hourly rate.

Labour Market Principles for Online Labour Platforms

There is currently insufficient empirical data to fully evaluate the likely labour market consequences of online labour platform minimum wages. Instead we suggest some general labour market principles which we believe should be applied to online labour platforms

First, all work that is done happens somewhere. Therefore, paid work undertaken through online labour platforms should fall under at least one set of national jurisdictions. There are few countries on the planet that do not have some form of regulated labour standards and minimum wage regulations. Therefore, online labour platforms must not exist as mechanisms for the avoidance of labour regulations. Just because a digital platform is used to connect a client with a worker, does not mean that the underlying economic and regulatory geography of that work should be ignored.

We should, as a starting point, adopt the principle that we do not need to reinvent the wheel. Online labour platforms should ensure that the relevant labour laws - including the classification of workers – are being followed. This is not an unusual expectation and it is widely accepted that conventional labour market intermediaries, such as employment agencies and labour brokers, have this responsibility.

When considering this issue it is useful to draw upon the discourse surrounding what is known as ‘tax dodging.’ Both tax evasion and tax avoidance are forms of tax dodging. While only tax evasion is illegal, as only these activities break the letter of the law, both evasion and avoidance are generally seen as harmful and immoral. We argue, therefore, that what matters, when thinking about labour regulation avoidance is the spirit of the law, not the letter of law.

Online labour platforms not only have a responsibility to ensure that the letter of the law is being followed but also the spirit of those laws. This is especially important regarding employment classification as minimum wages often only apply to those classified as “workers” or “employees”. In the spirit of the law, “self-employed contractors” are widely understood as being equal parties to those with whom they are entering into contracts with and thus do not require minimum wages. Conversely, “employees” are regarded as being the more vulnerable party in the relationship and in need of special protections such as minimum wages. However, in the contemporary labour market, many independent contractors are best understood as "self-employed workers" as they are in a vulnerable position due to dependence on a small number of clients and therefore in need of protections. Therefore, the spirit of these laws dictates that self-employed workers i.e. the vulnerable self-employed should be entitled to minimum wages as well as other protections outlined in relevant labour laws. However, much online gig work seems to be oblivious to, or ignore, those regulations. An employer based in Germany who sources work from a worker based in Kenya (via a platform based in the US) rarely has any knowledge of Kenyan labour law. It is also important to note that many countries’ minimum wage regulations include piece work. Under these laws employers are usually required to calculate a minimum piece rate which is not less than the hourly minimum if undertaken by a worker who is somewhat less skilled or more fatigued than the average worker.

Second, (and perhaps somewhat paradoxically), platforms should get rid of their global minimum wages. Global minimums send a message to clients that if they pay above the minimum then they are in compliance with relevant local regulations. However, it is entirely possible for workers to earn above platform minimum wages, but below their client’s national/local minimum wages

Third, we acknowledge that there might be claims that any attempts to enforce minimum wages could be unenforceable given the global and dispersed geographies and networks of online work. However, our research shows that the vast majority of demand for digital work comes from just five countries. Furthermore, a small handful of platforms mediate the vast majority of that work. These two facts demonstrate that initial barriers to regulation are not due to a dispersed geography or dispersed network of work. These topological and geographical bottlenecks in the global trade of digital work offer potential sites in which regulation can be enforced (we realise that many of the other submission to this call deal with some of the specifics of ‘how to do regulation’ and we therefore leave the details of that discussion to others).

We hope that some of these suggestions can help to bring about a fairer set of relationships between the employing class, the governing class, and the working class. Online gig work has brought income and jobs to many, but that does not mean that we should expect it to function as an unregulated labour market.

 

1 For some preliminary results, see the following publications:

Graham, M., Hjorth, I., Lehdonvirta, V. 2017. Digital labour and development: impacts of global digital labour platforms and the gig economy on worker livelihoods. Transfer: European Review of Labour and Research. 23(2) 135-162. https://doi.org/10.1177/1024258916687250.

Graham, M., Lehdonvirta, V., Wood, A., Barnard, H., Hjorth, I., and Simon, D. P. 2017. The Risks and Rewards of Online Gig Work At the Global Margins. Oxford: Oxford Internet Institute. 

2 See geonet.oii.ox.ac.uk/gig-economy/ and http://ilabour.oii.ox.ac.uk/research/

Want to work with us at the Oxford Internet Institute? I'm hiring a Digital Geographer!

I am hiring a Digital Geographer to work with me at the Oxford Internet Institute for two years on a full-time contract (we'll also consider part-time options for the right person). 

My existing research (much of it with wonderful collaborators) has uncovered highly uneven digital geographies: with some parts of the world far more like to produce, and be represented by, digital content than others.

Thanks to a Philip Leverhulme Award, I'm hiring a Researcher to continue some of this research: to ask what has changed, and to ask new questions about digital inequalities at not just the global, but also the local scale.

We plan to ask and answer questions such as: what are the contemporary geographies of the production and consumption of digital knowledge-based economic activities?; what are the geographies of digital representations (such as content in Wikipedia or Google)?; how likely is digital content to be locally or non-locally produced?; and do digital representations produce or reproduce social and economic inequalities and divisions in our urban environments. If we accept that our cities are made up of digital as well as physical raw materials – we need to better understand who owns, controls, shapes, can access, and can remake the digital layers of place.

We plan on answering the above questions using methods from computational social science and GIS: scraping, mapping, and statistically analysing a diverse range of datasets. The position is suited to candidates who have recently completed a doctorate in Quantitative Geography, GIScience, Computer Science, Economics, Sociology or other relevant discipline (i.e. postdocs), but we also welcome applications from qualified individuals without a doctorate (e.g. candidates with industry experience). Programming skills, and experience with GIS are required. The successful candidate will ultimately work with me to produce a full-length monograph on the topic (amongst other types of outputs and publications).

To apply for this role and for further details, including a full job description, please follow this link.

Digital Hegemonies: The Localness of Search Engine Results
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I have a new paper out in the Annals of the American Association of Geographers with Andrea Ballatore and Shilad Sen. In it, we ask (and empirically answer) questions about the the local-ness versus foreign-ness of content that Google serves up to people around the world. You can access the full paper below. 

Ballatore, A., Graham, M., and Sen, S. 2017. Digital Hegemonies: The Localness of Search Engine Results. Annals of the American Association of Geographers.  DOI:10.1080/24694452.2017.1308240.

Please also note that I'm currently hiring a Researcher in Digital Geography if you'd like to work with me on similar topics!

Summary (taken from the paper's conclusions):

This investigation of the geography of Google Search results shows that wealthy and well-connected countries tend to have much more locally produced content that is visible about them than poor and poorly connected countries. Even cities located in countries with huge populations such as Lagos show a tendency toward having relatively little local content about them in Google Search results. This means that a user in the United States or Germany searching for cities is far more likely to be given access to locally produced content than a Tanzanian or Cambodian.

In our empirical study, the results of only eight countries in Africa (and four low-income countries: Tajikistan, Madagascar, Burkina Faso, and Tanzania) have a majority of content that is locally produced. This gives rise to a form of digital hegemony, whereby producers in a few countries get to define what is read by others. The United States, in particular, is a dominant content-producing force, even when excluding Wikipedia, which is a highly visible U.S.-based but globally assembled resource (Figures 10 and 11). In the results for sixty-one countries, the United States supplies over half of the first page content on Google. This means that not only are U.S. Internet users surrounded by an extremely locally produced Internet, but U.S.-produced content is highly visible in much of the rest of the world. This does not necessarily mean that the United States is an informational hegemon everywhere in the world, however. France has a somewhat smaller sphere of influence, mainly limited to countries in Africa, whereas Russia produces a visible effect only on results about Kyrgyzstan (see Figure 10).

It is important to note that, because our data set focused only on capital cities, caution should be taken when extending the results to higher spatial granularities. Our localness indicator does not take into account the actual interaction of users with search results and the variety of devices and media across which individuals currently access search engines. Despite the precautions that we took to access representative samples of search results, some noise is still present and some results might show high volatility. Much more empirical work is needed to study finer patterns within countries and to build more accurate models to investigate the consumption of geographic information on search engines in different geographic locales.

More broadly, the point remains that most countries in the Global South continue to be defined by a diverse range of sources originating from a diverse range of places. The issue here is not that Internet users are exposed to a diverse range of sources from a diverse range of places—indeed, as Pariser (2011) noted, there are significant concerns for people and media ecosystems that lack access to such diversity. The issue is rather that that diversity itself has a particular bias and those sources tend to be almost entirely from the Global North; very few of the sources come from anywhere in the Global South. For instance, although the search results for Google's Ghanaian page for its capital “Accra” include pages from six countries, five of them are firmly located in the Global North.


When looking at countries in the Global North, the results for Denmark's capital are similarly diverse, with five out of six source countries also being located in the Global North. By contrast, a country like the United States suffers from the inverse problem: having almost no exposure to geographic representations made by nonlocals.

The key question, then, is why. What explains this informational hegemony, or the dominance of the Global North in producing digital representations about not just themselves but also about much of the Global South? Interestingly, our explanatory models indicate that network connectivity and economic development in a country are not enough to make content about that place more local in Google Search results. The presence of a strong publishing industry, using SciMago publication data as proxy, is the strongest predictor of the production of visible online content. The importance of the h-index in the model also shows that the impact of scientific publications is a better predictor of localness than the mere number of publications. Thus, we suggest that socioeconomic systems that produce high-quality research also tend to produce highly visible online content. There are no countries in the Global South that score well on such metrics, and there are consequently no countries in the Global South that play a major role in constructing contemporary Internet geographies.

Having taken a first step in this direction, more quantitative and qualitative research is needed to better understand why exactly scientific knowledge production explains so much of the variance in Google's local digital representations. More relational variables and different spatial granularities will have to be considered. Until then, though, we hope that the finding that wealth and network connectivity alone are not sufficient factors is worth demonstrating, especially for Internet activists who hope to bring about more genuinely participatory and representative digital environments. This point increasingly matters because places are ever more defined by their digital presences, and the ways in which places are represented digitally increasingly shape how people understand and reproduce those very places (Graham, De Sabbata, and Zook 2015). Google plays an enormous role in constructing these digital representations of places. Because of their dominant role in mediating a majority of the world's Internet use and the fact that few people ever explore beyond a first page of search results, they essentially determine which digital augmentations of place are made visible or invisible, with tangible effects in the physical world.

This article demonstrated that Google Search results are actively reproducing new forms of informational hegemony around the globe. A few countries in the Global North play an inordinately large role in defining the digital augmentations of the Global South. Google's methods for ranking and representing are notoriously opaque (Vaidhyanathan 2011; Graham et al. 2014), but we do know that two key factors come into play. First, much of the reason of the lack of local voice in the Global South is likely simply because the production of Internet content happens at a much lower rate compared to that in the Global North (Graham, De Sabbata, and Zook 2015). Second, since the company's creation in 1998, Google's algorithms have tended to favor highly central Web content: Pages linked to by a lot of other pages are prioritized, and those largely ignored are demoted in the rankings. This creates a worrying situation whereby it becomes difficult for those on the information peripheries to break out of their digital marginality.

Building on earlier research looking at the geographies of information, this article has analyzed not just where digital content comes from but how it is ranked in the world's most powerful digital mediator. Much more will need to be done to understand not just the ways in which people are afforded voice about their own communities and countries but also the myriad factors that serve to amplify or constrain it. Until then, we hope that other research can use this article as a beginning to ask not just why some parts of the world are denied locally produced representations but how we might bring about more representative and participatory digital augmentations of place.

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How to resist the exploitation of digital gig workers

Internet users will make up the majority of the planet’s population before the end of this year. Most of this digital growth is coming from Africa, Asia, and South America: places where incomes are low and well-paying jobs are scarce.

It should come as no surprise then that many of these new internet users are turning to online job platforms to find work in the so-called ‘gig economy.’ Platforms such as Fiverr, Freelancer, and Upwork connect workers to clients irrespective of their geographic locations. For the first time in history, we have a mass migration of labour without an actual migration of workers. According to the World Bank, there are now 48 million online workers in a market that is worth over $5 billion.

This new global market for labour allows workers in low-income countries to find jobs and income that they otherwise wouldn’t have had access to. Because of this, governments in Kenya, Nigeria, the Philippines, and elsewhere have launched ambitious programmes to get their citizens to sign up to gig work platforms. Some online gig work platforms likewise suggest that they are bringing about a revolution in labour markets by lifting people out of poverty.

We have spent the last three years interviewing about 125 online gig workers in Africa and Asia, and doing a survey with hundreds more, and we found that the realities are a bit more complicated.

Although online gig work does indeed bring higher incomes and a sense of freedom for some, it also creates some significant problems.

Most worrying is the massive oversupply of labour on some of the largest gig work platforms. Almost 90% of people who sign up to work never end up finding a job. This oversupply exerts a downward pressure on wages and working conditions. A worker in Kenya knows that if she lobbies for a higher wage, another worker in India or the Philippines can easily take her place. This is a buyer’s market for work.

Online gig work is also inherently insecure. There is rarely any job security, and a worker who falls ill, becomes pregnant, or simply needs a break will lose their income. Because most workers live in countries with little social security, this presents a real risk to the well-being of people who do not thrive in the online gig economy.

Because online workers lack security, and because of the constant threat of competition, many are tempted to work extremely long shifts. Many hours are spent each day searching and bidding for gigs. When this necessary unpaid work is combined with the time taken fulfilling clients’ demands, the total working week can add up to 70 or 80 hours – requiring late night working and other anti-social hours. Unsurprisingly to increase the amount of paid gigs, workers try and complete tasks at intense speeds, so they can move on to next gig or return to searching for more paid-work. Working at high-speeds while sat at computer for long hours can have painful consequences while the reward is just a few dollars an hour.

Source: https://twitter.com/b_cavello/status/839876313473150976

Source: https://twitter.com/b_cavello/status/839876313473150976

Despite these issues, online gig work is growing at a rate of 25% a year. Therefore, an increasing number of workers around the world will soon find themselves doing it. As this global market for gig work expands, we need to think of ways to design a system that works not just for those who thrive in it (the most successful workers), and not just for those who benefit most from it (clients and platform owners).

Consumers, regulators, platforms, and workers each have distinct roles to play in creating this fairer world of work.

First, consumers: you, as an internet user, have an important responsibility in this new world of work. In the last few decades, the fair-trade movement has encouraged millions of people to avoid coffee, diamonds, or running shoes that have been produced in unethical ways. There is no reason why we shouldn’t be similarly ethically aware when using a search engine, an AI system, or a social network: all of which are maintained by real-world digital workers. In other words, we need a consumer ‘fair work’ movement.

Second, regulators could do much more to help digital gig workers. Currently, a lot of this sort of work passes entirely underneath the radar of regulation. Taxes are rarely paid, and workers may not feel empowered enough to complain about the non-payment of wages. Uber, for instance, has even designed bespoke technology to enjoin its drivers to evade state regulations. Changing this state of affairs will require governments in countries like India, the Philippines, and South Africa to pay attention to online work and enforce (and ideally adapt) existing labour laws.

But it is also worth remembering that only a handful of countries (the US, India, the UK, Canada, and Australia) outsource the majority of digital work. It is in those places that international standards could potentially be enforced. Imagine if firms in these countries were legally responsible and accountable for ensuring that all workers, no matter where they live, must be treated with certain minimum standards.

Third, because almost all large online work platforms are currently privately owned firms, they rarely have the best interests of workers at heart. They capture large rents – often 20% of wages – by simply providing a platform that allows clients to meet workers. There is no reason that platforms cannot instead be run by and for workers, as cooperatives, in order to allow workers to capture more of the value that they are creating.

Finally, digital workers themselves are not powerless. The dispersed, but digitally-connected, nature of this work makes a lot of workers feel as if they are competitors in a global market. But those same digital networks can also be used locally to foster horizontal collaboration between workers. Workers can share complaints, organise strategies, construct virtual picket lines, and in some cases, collectively withdraw their labour.

Despite the fact that there is a global market for digital work, we show in our research that not all digital gig work being done is truly global. Economic geographers have long pointed to how capitalism creates ‘spatial divisions of labour’: the ways that firms use digital technologies to increase profits by locating and activating low and high skilled parts of production networks in different parts of the world. But these economic geographies can also be used as a site of strength for workers. Concentrations of work and workers in particular places mean that workers no longer need to feel that they are solely atomised individuals in a global market. Instead of competition, potentials for collaboration and mobilisation exist at the local level.

There is no way to turn back the clock and return to a pre-globalised world of work. But we also need not be satisfied with a system that only serves those who thrive in it and offers few protections for the most vulnerable. Let’s use what we know about the networks, geographies, and systems of digital labour to strive for a fairer world of work.

Mark Graham and Alex Wood

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This text was originally  published in Red Pepper Magazine.

This research is based on a three-year investigation, ‘Microwork and Virtual Production Networks in Sub-Saharan Africa and Southeast Asia’. For further reading you can access some of our work in a new report or a new paper.