Using Technology to Bring "Hidden Workers" to Light

Amir Magdy Kamel is a Visiting Scholar and Instructor at Stanford University and Associate Professor at King’s College London. His research and expertise focus on two areas: 1. transformative technologies and how they impact states and policymaking, and 2. political and economic issues across the Middle East, including EU and US foreign policy towards the region. His latest book is Floundering Stability: US Foreign Policy in Egypt.

Official measures of employment, tax and GDP overlook informal, undocumented and shadow economy workers. These include those who fall short of the threshold to be considered employed, such as gig workers; those who are willing but unable to find work; and those who volunteer. Despite being left out of official metrics, these “hidden workers” contribute to the functioning of the broader economy in sectors such as construction, agriculture, caregiving, and hospitality. Demographically speaking, hidden workers range from veterans and refugees to those with disabilities, those who were previously incarcerated, or those who lack specific technology skills. Various economic and political barriers impede these workers from integrating into the conventional workforce, hampering national and individual productivity. These barriers include a lack of formal identification cards, social and legal protections, susceptibility to discrimination, and an inability to gain access to something as basic as a bank account, insurance, or social security. This is often coupled with political complexities that come with forced displacement, such as missing documents, non-transferrable national qualifications, or a rejectionist sentiment held by host societies. The transformative potential of technology, including artificial intelligence (AI), blockchain, and data analytics systems, can be harnessed to dismantle these barriers for the good of the worker and the economy. These barriers are further exacerbated by COVID-19 virus suppression measures, as differences in immigration restrictions, social distancing and vaccination requirements persist at the local, national and international level. In the U.S. context, partisanship determines behavior and attitudes towards COVID-19, while sentiments of feeling disadvantaged in the southern and eastern European states hampers EU efforts to suppress the virus. And on a global level, the director of the World Health Organization notes how the politicization of COVID-19 by leaders and policymakers exacerbates the negative consequences of the pandemic. While these issues relate to health concerns, the politicization risks have spread into public policymaking more widely. Technology interventions have the potential to assuage such sentiments of distrust and inequality felt by hidden workers in public policy by easing the formal recognition of qualifications and providing vital financial services, all within a protected legal framework.

HIDDEN WORKERS COMPRISE A LARGE WORKFORCE

Informal workers who are not captured in official statistics account for 20% of the EU’s economy and 15% of the U.S. economy (rising to a third of the world economy). More widely, 60% of the population and 80% of business enterprises engage in informal activities on a global scale. In addition, gig workers amount to 55 million people in the U.S. alone, all of whom risk job insecurity, legal uncertainty and exploitation. Hidden workers are mostly found in the construction, agriculture and hospitality sectors where harsh conditions and their marginalized status make them more vulnerable to injury, discrimination and pay discrepancies. Women are 8.5% more likely to work outside of formal sectors, while minorities and young people make up the largest share of hidden workers, owing to a need for flexibility, their undocumented status and relative inexperience. As a consequence, policies should be pursued that make use of technological advances to ensure that the financial needs, official documents and legal protections are recognized and in place for hidden workers. At the same time, policies should ensure that these segments of society are not further disadvantaged. This will allow employers, and the wider economy, to integrate hidden workers into the workplace, which will result in increased productivity.

POLICY RECOMMENDATIONS

There are several ways technology could be useful in aiding hidden workers. The development of digital identification platforms can support the establishment of a digital public service database for all workers. In turn, this can ensure the immigration status of users is protected on a secure platform. These goals can be pursued using blockchain-based systems to certify authenticity, similar to the national system tested in Malta to verify education certificates, which ensures users – like refugees – are able to present their validated qualifications in a secure manner when fleeing conflict and destruction. Elsewhere, a digital system for health records was set up during the pandemic in Singapore with a focus on ensuring that an individual’s COVID-19 status is securely recorded. Analogously, Oman uses a digital system to protect against identify fraud, and the European Digital Identity platform was set up to provide online and offline public and private services across the EU. While these and other technological advancements have the potential to benefit both hidden workers and wider economic output, four technologies present the lowest hanging fruit to enable rapid change:

INTEGRATE FINANCIAL INCLUSION SYSTEMS TO ENABLE HIDDEN WORKERS TO ACCESS BANKING SERVICES

Blockchain-based digital wallets and mobile banking have the potential to “bank” the “unbanked”. In the broader context, mobile banking through existing systems is estimated to be worth $1.82 billion by 2026, with a survey showing 97% of millennials, 91% of Gen X, and 79% of the preceding Baby Boomer generation using this service. Furthermore, the decentralized nature of a blockchain-based system would appeal to those who are weary or critical of public policymakers and the estimated 1.7 billion people in the world who remain under- or unbanked. A key to this recommendation is ensuring the U.S. and EU technology regulation is aligned to ensure efficiency. This, along with the integration of blockchain-based systems can help minimize the politicization of criticisms and concerns.

IMPROVE ACCESS TO TECHNOLOGY-POWERED EDUCATION AND TRAINING

AI programs can be used to identify and tailor training to upskill and reskill workers to maximize their employment potential. These can complement education providers to ensure “soft skills” are not lost. This also has wider applicability for both hidden workers and non-hidden workers to ensure skills adapt to industry needs. In addition, this will ensure education provision matches job vacancies, something that is proven to be a proven powerful minimizer of informality.

DATA ANALYTICS SKILL MATCHING

By combining big data analysis with AI software, policy makers can enable efficient and skill-specific job matching to integrate hidden workers into the conventional economy. This movement is already underway, with the shift in emphasis from jobs to skills repeatedly highlighted, and so deploying this technology to improve the jobs to skills matchmaking will help achieve this broader policy shift. To do so, policymakers can make use of AI systems to identify industry and job needs as opposed to reacting to them through regulation, concerns or institutional resistance. This can be accomplished by bringing together national teams made up of industry and government representatives dedicated to the design, implementation and monitoring of these policy proposals to harness and build expertise, ensure accountability and adjust to industry needs. Such a task force will enable the most informed and attuned policy formulation processes.

IMPLEMENT THE USE OF SMART CONTRACTS TO PROTECT HIDDEN WORKERS

Once workers are employed, the blockchain-based smart contract infrastructure has the benefit of being secure, transparent, and traceable, thus minimizing political and logistical barriers. Furthermore, this system has the ability to improve assurance and reduce fraud risks when deployed in cases where the broader governance infrastructure is designed in a complementary manner. In other words, the legal and infrastructural aspects that are necessary for the functioning of this technology need to be designed in a way that ensures interoperability between the technological system and the law. In addition, smart contracts can be designed to adapt to the changing marketplace – an important and integral aspect when considering the future of work. These systems can help avoid inadvertently incentivizing bad actors through loopholes that circumvent the intent of these systems, unequal access levels that favor those less fortunate, or laddered rewards that benefit elites. To do so, these technological systems should be designed after a thorough stakeholder consultation and testing program, along with a plan to adapt to the evolving operating environment. The use of such technological systems should come with legal protections for historically (and potentially new) disadvantaged users from the very outset. In turn, this will help close existing abusive labor market practices that have reinforced glass ceilings and maintained inequality.

More generally, these recommendations can be accentuated by increasing the policy cycle. In other words, hasten the calls for evidence, testing, and implementation stages that predicate policy understanding and formulation – something that is lagging in the U.S. and EU compared to other parts of the world. Indeed, this lag can be observed through China’s notable leading agenda and norm-setting approach to technology. Here, Beijing is forging ahead through its very own blockchain-based service network and the digital yuan with its Digital Currency Electronic Payment or DCEP platform. Importantly, these technological interventions can be used for hidden workers to participate in the formal economy in a manner that requires minimal to no technological literacy. This ensures that disadvantages and inequalities that are baked into the current system are not exacerbated further. Together, these technological tools can integrate and empower hidden workers to the benefit of broader society.

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