City Governments Turn to SamaSource, Crowd4all, and Crowdflower to Help Fight Poverty

In his third State of the Union address, President Barack Obama again highlighted the critical need to better train America’s workforce in order to meet our domestic businesses’ complex labor needs and remain competitive in the global economy. Obama singled out the growing industries in science and technology as prime entry points for newly skilled American workers.  

This call to capitalize on domestic talent in these sectors is not new. There are countless job-focused social policy schemes aimed at paring those looking for work and low-income earners with the right skills and the opportunity to use them in these fields. Yet, there is one innovative proposal floating currently circulating around policy shops in New York City and San Francisco that demands further attention: "domestic outsourcing" or "microwork" in the Information and Communication Technologies (ITC) sector. Despite showing positive effects within some international development contexts, the promotion of similar microwork-based poverty alleviation schemes within the U.S. domestic economy will not prove to be a ticket to the middle class.

The focus of these schemes is not on attracting jobs focusing on accounting, customer services, and human resources, which have been typical business processes moved overseas in the last 10-15 years and require large populations of highly-educated workforces. Rather, this model of "domestic outsourcing" hopes to tap into the $4.5 billion microwork industry that employs technology platforms to distribute small, discrete, largely low-skilled tasks — like entering or cleaning data, image tagging or product cataloguing — into domestic local economies.

City governments are looking to social enterprise companies like SamaSource, Crowd4all, and Crowdflower, which have sprung up recently, promoting microwork as an opportunity to reduce business cost while fighting poverty. Up until this point, this approach has been structured around an international development model that connects internet-based employment opportunities to workers in remote, marginalized communities.

The microwork approach, as coined by SamaSource, was never intended to independently lift workers out of poverty. Workers make around $5 per day, which has the potential to make a significant impact within their local economies, yet is still not enough to sustain a middle-class lifestyle.

And herein lies the problem for urban policy makers in the U.S. There is no easy tweak that can be made to adopt this apparently successful international development model to sustainably meet the employment demands of our domestic cities. The business model on which microwork is based has had a social impact because it has succeeded in creating a situation where the fulfillment of a social responsibility is also the best business choice to remain competitive. Due to the very nature of the "remoteness" of the workforce that this approach is capitalizing on, relative wages in a similar scheme in the United States for this level of work would never be cost-effective.

Domestic outsourcing as a viable domestic poverty reduction strategy only has hope of succeeding if companies throughout the value-chain upgrade their corporate social responsibility (CSR) practices and move beyond the highly destructive "race to the bottom" mentality that has fueled competition in the global economy for much of the last few decades. Without a significant change to the value system of traditional ICT supply chains, this "innovation" has little hope of ever moving beyond a heavily subsidized CSR darling and into a sustainable sector in the domestic economy. As is, it is not a promising approach to enable cities to quickly access new high-value jobs and will not be the key to meeting Obama’s objective of fostering a better equipped, competitive workforce for the 21st century economy.

Photo Credit: mariecasas