‘Socially responsible outsourcing’ takes tech jobs to developing world

SF Public Press
 — Aug 12 2010 - 11:41am
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Video by Monica Jensen/SF Public Press.

Wages a fraction of U.S. standards, hours inconsistent, but nonprofit lifts workers from poverty

A local nonprofit group is making a name for itself in the tech world by providing U.S.-based companies with low-priced online labor in developing countries. While thousands of for-profit companies have been offshoring tech jobs for years, San Francisco-based Samasource says it wants to turn online work into a tool to alleviate poverty.

In the last year the organization has attracted grants and support from foundations and Silicon Valley companies, including Google and Facebook, by finding jobs for low-income people with some level of education but lacking economic opportunity.

Samasource distributes “micro-technology” jobs such as data entry, proofreading and transcription to partner firms in South Asia and Africa. The organization says that while prevailing wages abroad for these jobs are “often $5 per hour or less,” that is enough to benefit impoverished workers while also providing competitive rates for small businesses in the United States. Workers at Samasource contractors report earning 44 cents per hour in India and $2.67 in Kenya. Wages vary widely depending on the country and type of work.

Representatives of the group say they look out for workers’ economic interests in part by adhering to strict criteria for selecting global service partners.

“I think giving work and providing people with the means to earn an income is a really logical way to end poverty,” said Leila Chirayath Janah, founder and CEO of Samasource. “Yet very few organizations are actually able to connect the poor to what they need most — work.”

The emerging “socially responsible outsourcing” business model, however, has raised a number of questions beyond the appropriate level of pay. International labor oversight is complicated, and alleviating poverty depends on providing stable working hours and long-term employment.

“Anybody that’s here in the U.S. that is outsourcing work should be doing so in a way that makes sure that those workers are permanent workers, and therefore receive all the benefits that come with being a permanent worker,” said Trina Tocco, deputy director of the International Labor Rights Forum, a labor advocacy group in Washington, D.C.

Charitable goals

The organization says it selects service partners that share its social goals: tackling poverty in poor regions with “untapped human capital,” working with women, 18- to 30-year-olds and refugees and paying a “living wage” appropriate to the country. To determine the local living wage, the group uses the Fair Wage Guide developed by the Oakland nonprofit World of Good, which derives its index from research by economists and fair trade experts. Originally it was developed for artisan work, but Samasource has adapted it to compute hourly wages for tech jobs.

“Digital work is perhaps unique,” Janah said.“The social impact doesn’t come from regulating organizations that are doing the work, because there’s not a lot of mistreatment of labor that happens in the digital work space. think that by having social-impact criteria, right at the top of our list of guidelines for selecting partners, we avoid that.”

Janah founded Samasource in September 2008 with $35,000 in funding from the Stanford Social Enterprise Challenge and the Business in Development Challenge, an international business plan competition. She went to Ghana when she was 16 on a scholarship to teach English to blind children, and the experience inspired her to go into international development work.

Although initial funding failed to maintain the organization, Samasource later got help from the Peery Foundation ($300,000), the Rockefeller Foundation ($70,000), the John Templeton Foundation ($10,000) and the Body Shop Foundation ($2,000). The group also got training and support from Facebook’s fbFund and $120,000 worth of AdWords from Google.

Workers around the world

Samasource has provided more than $400,000 worth of work for 20 partners in seven countries. Samasource declined to state what percentage of its revenue it charges to American clients. The U.S.-based businesses benefiting from the work include Palo Alto technology nonprofit Benetech, Jersey City, New Jersey-based entrepreneur incubator Rising Tide Capital, and San Francisco based technology company CrowdFlower.

Service partners are spread out across the globe: Kenya, Ghana, Zambia, Pakistan, India, Cameroon and Haiti. Shama Perween, 21, has a bachelor’s degree in history and works for Samasource service partner Usha Martin Rural Services, a for-profit Web company with 39 employees in the Indian state of Jharkhand. Perween has worked on projects for Crowdflower. Her job is to verify addresses, post job listings and match photos by product category.

Through a translator, Perween, who speaks Hindi, said she learned enough about Internet search and basic English to do the job.

In an e-mail, the company’s CEO, Mahesh Venkateswaran, said employees earn a base pay of $80 a month. At about 42 hours a week, this translates to an income of 44 cents per hour, not including extra “incentives.”

Workers at Samasource’s for-profit partner in Kenya, Daproim Inc., receive $1.33 to $2.67 per hour. The organization’s cofounder, Stephen Muthee, said he partnered with Samasource in 2008 and 85 percent of Daproim’s employees are now working on projects generated by Samasource.

Debating labor standards

While socially responsible outsourcing connects low-income individuals overseas to the global market, it’s a complicated business. Clair Brown, an economics professor and director of the Center for Work, Technology and Society at the University of California, Berkeley, said hourly wages are only part of the picture.

“The problem with the minimum wage is that it’s good to set a wage per hour, but then we also need to have minimum hours, so that we’re assured of a living wage for a person over time,” Brown said.

Janah said Samasource’s goal is to employ each worker 20 hours a week for two years. “But as you might imagine, we have very little control over what workers want to do and we can’t force anyone to do anything.”

Another challenge is overseeing home-based work. That is especially hard for digital piecework like that offered by online transnational marketplaces, such as Amazon Mechanical Turk.

“Home work is notoriously difficult to regulate and highly problematic — it tends to be very unregulated work,” said Cynthia Estlund, a law professor at New York University. “On the other hand, if home-based work were overseen in a responsible way by an organization that genuinely wants to ensure decent standards — decent wages — that might be a source of sustenance for workers that don’t have much else available.”

Some labor experts are concerned about government oversight to ensure workers are compensated fairly.

Vic Van Vuuren, director of the United Nations’ International Labor Organization office in Pretoria, South Africa, said many underdeveloped countries in Africa “are able to meet minimum international standards for minimum conditions.” But regulation is slow to follow, he added. “It’s the implementation of the oversight that is glaringly missing, which prevents people from moving from a poverty situation to a quality of life in the workplace.”

A version of this article was published in the summer 2010 pilot edition of the San Francisco Public Press newspaper. Read select stories online, or buy a copy.

Comments

I've long found the morality of off-shoring to be far more gray than both opponents and proponents tend to portray it. As bad as some sweatshops are, it's also true that the living conditions of many people around the world are worse than sweatshops. In the long run, a world where citizens of one country earn 100x what citizens of another country make just doesn't seem sustainable--let alone fair. Off-shoring seems like a way to address that imbalance. And if done responsibly, as this organization seems to be trying to do, then progress can be made more rapidly toward a world where your living standard isn't 99% determined simply by the country you are born in. Plus if people all over the world make decent wages, there's little incentive for companies in our own country to lay off workers here to take advantage of paltry wages elsewhere.