4. @timoreilly #NextEconomy
Low wage employers like McDonalds and Walmart are the
new sweatshop, but something different is happening in tech
McDonalds 440,000 employees, 68 million monthly users
Snapchat ~300 employees, 100 million monthly users
I’ve been organizing a new event called the Next:Economy Summit (http://conferences.oreilly.com/nextcon/) for this coming October. It’s focused on technology and the future of work. As I usually do, I talk to lots of smart people to inform my thinking. Hal Varian, Google’s chief economist, is one of these people. He said to me: “My grandfather wouldn’t recognize what I do as work.”
So he says! I say “The more things change, the more they stay the same!” These programmers at Pivotal bear an uncanny resemblance to workers in a Victorian sweatshop!
I’m really kidding, though, as is illustrated by these statistics. Low wage employers like McDonalds and Walmart are the new sweatshop, but something different is happening in tech. McDonalds has 440,000 employees and 68 million “monthly users,” while a company like Snapchat serves 100 million monthly users with only about 300 employees. How can that be?
It’s because programs are the real workers at companies like Google, Facebook, and Snapchat. This is a portrait of a 21st century worker: a github repo. The programs, not the programmers, are the equivalent of the assembly line workers or the servers at McDonalds.
And all of the people contributing code are the managers! This kind of mental inversion helps you to see the world in a whole new way!
Programmers like you are actually the managers. Every day, you are inspecting the performance of your workers and giving them instruction about how to do a better job. The Build-Measure-Learn cycle is the equivalent of a manager giving feedback to his employees.
Of course, there are still human managers at Google, but the hierarchy is much flatter, because so many of the people who appear to be workers are actually already managers, whose principal activity is not to be told what to do, but to understand the company objectives, and act on their own to tell their “workers” what to do.
It strikes me that that is why OKRs have taken such root at Google and other tech companies. The focus on clear, measurable results fits well with a world in which the workers do exactly what they are told! And managers spend their day trying to figure out how to align their workers better with measurable high level goals.
There are other cases where the algorithmic workers produced by coder-managers like you are in turn managers for human workers. You can see this clearly in a company like Uber or Lyft, where the managerial programs tell people where the demand is, track the performance of the job and how to pay for it, and even solicit feedback from the customers about the human worker’s performance.
This is where things get tricky. When you’re writing a program that serves users directly, measuring user satisfaction is all you have to worry about. But when you’re writing programs that will also manage human workers, you have a real responsibility to make sure that those managerial algorithms are taking care of their workers. Companies like Uber have set their algorithm to optimize for only one factor: passenger pickup time. Until recently, drivers have been considered a throwaway commodity. That’s a big mistake. It’s becoming increasingly clear that many Uber drivers are being paid less than a living wage.
The current state of the ride sharing management algorithms, is somewhat akin to the state of search engines before google, crowded with ads and not doing a very good job of satisfying all of the user needs of the ecosystem. This is a screenshot of Altavista from 1996. I’m old enough to remember how bad search was back then.
Google came along and not only made algorithms that were focused on better search quality, but also algorithms focused on better ad quality. That’s what ride sharing companies need to do today - improve their algorithms to manage their human workers not just for passenger pickup time and customer experience, but also to make sure that the drivers themselves have a good experience and can make a good wage.
This isn’t just a matter of social justice. Worker experience is a matter of competitive advantage, just like user experience. I predicted early this year that competition for better working conditions would shape the competitive landscape for ride sharing companies. And sure enough, Uber has now made a deal with the Mechanic’s Union in NYC, and better wages is a real point of competition between uber and lyft.
As my friend David Rolf of the SEIU said to me before my Next:Economy summit last year, “God did not make being an auto worker a good job.” We have to do the same hard work that was done in the industrial economy to make jobs good for ordinary people again, not just for “managers” like us.
Workers at companies like Walmart and McDonalds are also managed by algorithm, and it’s a particularly user-hostile algorithm, which tells workers when to show up, gives them very little control over their schedule, and even makes sure that they don’t get more than 29 hours a week so that they aren’t eligible for health benefits. There is a whole industry of algorithmic workplace scheduling systems designed to maximize profits by screwing workers.
Fortunately, even in the old economy, some companies are starting to take notice, and realize that the scheduling algorithms need to take the human workers into better account. For example, in 2014, Starbucks ended the dreaded “Clopen” - in which an employee, who might live an hour away, was assigned to close the store at 11, and reopen it at 4 or 5 am. Many companies still follow this practice, though.
And that’s what allows Uber to attract workers with promises like these, even if they don’t yet live up to them.
Bringing this home to all of you - Being a YouTube creator, or someone who has built and monetized a big fan base on Facebook, is one of those jobs that Hal Varian’s grandfather wouldn’t recognize. In the age of networks, a lot of the people who “work for you” aren’t your employees. The stars who drive all those billions of views on YouTube need to make a living too. The programmers who build the algorithmic workers at YouTube, which in turn manage these outside workers, have a responsibility to think about these workers and how to make what they do pay off.
Consider someone like Brandon Stanton, the heroic photographer and journalist behind Humans of New York, one of Facebook’s most successful feeds.. It’s grown from a hobby into more than a full time job - yet he makes his entire living outside of the platform, via his books and speeches. The platform enables his work, but doesn’t pay him to do it. He decided not to take advertising on his pages, and uses them instead to crowd fund money for charitable causes. He told me earlier this week that he thinks he’s raised about $6 million for charity so far this year. But that was when he was only about halfway through his latest fundraiser, for cancer research, which raised $3.5 million.
Jack Conte told me the story that led him to found Patreon, the crowdfunding patronage site for artists, which now pays out millions of dollars a month.
He and his wife Nataly perform as Pomplamoose, and he got fed up when he realized that 17 million YouTube views had turned into only $3500 in income. “Our fans value us more than that.”
Not finding ways to pay for user contributed content is a bug in the system, because in tomorrow’s economy, a lot of the serious content is being produced by people like Brandon Stanton, and entertainment is being produced by people like Jack and Nataly.
In homage to Norman Mailer, whose wonderful book Why Are We in Vietnam wasn’t about Vietnam at all, but instead was an exploration of American macho, I will end by saying: “And that’s why Donald Trump and Bernie Sanders are dominating the political headlines today.” Human income inequality is a bug in many of the systems we’re building, and it’s our job as managers of the systems that employ people today to fix that bug.
It’s time to build technology, and companies, as if people matter! And when I say “people,” I don’t just mean our users, but the human workers, because the boundaries between managers and workers, customers and suppliers, are all breaking down. And that’s the conversation that I’m trying to enable at my Next:Economy Summit.