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The artifice of the machine

06 August, 2020

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“It's supposed to be automatic, but actually you have to push this button”
-John Brunner, Stand on Zanzibar 

In the late 18th century, in an attempt to impress the Archduchess of Austria, Wolfgang von Kempelen invented an automaton chess player which would become known as the Mechanical Turk. The automaton wasn't necessarily a ground-breaking idea, but this was the first that was able to play chess, and play it well. It was able to adapt to an opponent's moves and even recognise when one was trying to cheat with illegal moves. The Turk travelled across Europe and America, defeating most opponents in its path, including the likes of Benjamin Franklin and Napoleon. Was this the first form of artificial intelligence? Sadly, not. It was, in fact, an intricate deception, for hidden within the Turk was a chess master operating the machine.

Over two centuries later there have been significant developments in artificial intelligence (AI) and genuine machines are now able to - sportingly - beat chess grandmasters around the world. These advancements have changed the way we work, how we communicate, and how we shop. Computers have allowed us to process data in a more efficient manner than humanly possible. With all this automation happening around us, what's not always apparent is the human labour involved in powering the machines.

When Amazon was building its online marketplace at the turn of the millennium, the increase in products led to issues with duplicate titles, photo mismatches, and improper categorisations. It was thought this could be fixed simply by writing an automated program, but it became apparent that it required human intelligence. Instead of hiring a workforce that would require a salary to fix these problems, management decided to build an application whereby tasks would be posted and the public allowed to complete them from their own computers. The members of the public would get paid a small amount for each completed task, but the work would be completed on their own time. Amazon was therefore able to get all this tedious work completed while managing its cost base.

Having successfully built a network of outsourced workers with excellent results, Amazon decided to make this platform available to other companies, thereby allowing them access to an on-demand workforce while taking a commission for posted tasks itself. Paying homage to the original invisible human controlling what appeared to be an automated machine, the service was named the Amazon Mechanical Turk. Companies will post jobs that AI cannot complete in its current form, but instead require human intelligence; these jobs have been labelled Human Intelligence Tasks (HIT). HITs vary in nature and include image processing, data verification and clean-up, information gathering, and data processing.  

Hundreds of thousands of workers from around the world have joined the Amazon Mechanical Turk (AMT) community, and other crowdsourcing platforms that have been created since then. In the majority of cases the workers are underpaid for their services. The requesters set the price of the task as high or low as they want, with the minimum price set to 1 cent. A 2017 study found that the average wage for an AMT worker was $3.13/hour with only 4% of workers making more than the U.S. minimum wage of $7.25/hour. 1 Requestors are also able to refuse to pay for the completed work if they claim they are not happy with it, with no real feedback loop to the worker, thereby creating an ironically dehumanising experience for those workers.  

With an increasing number of websites and applications requiring AI, there will be a significant surge in workers needed to help fuel this growth. In 2015, it was estimated that in Europe and North America alone there were 25 million people performing some form of on-demand gig work online, with no signs of this trend slowing down. One estimate suggests that 60% of the current employment globally will be converted to some form of hidden on-demand work by 2055. 2

While many were amazed by the wonder of the Mechanical Turk, the poet Edgar Allan Poe, one of countless people to have sought out the machine given its fame, was more focused on the mystery of how a human was able to operate the contraption. Similarly, with all the extraordinary developments in technology and automation, it is important for us not to forget about the hidden workers who are driving these advancements. As responsible investors it is vital for us to ensure that companies are not neglecting the human capital driving their businesses.

It is a real struggle in terms of who takes responsibility for the rights of these gig economy workers, especially as pressure from society mounts. Should the responsibility lie solely with the companies contracting their services, or should government and policy-makers be involved? During the Industrial Revolution, the introduction of machinery automated processes but workers were still needed to fill in the gaps where machines couldn't complete the task, and in many cases this created poor working conditions. In the United States it took the Great Depression for the government to create The National Labour Relations Act and, in turn, the National Labour Relations Board to act as a neutral third party to ensure employees' rights were being adhered to by employers.

We are starting to see more attention being paid to the rights of workers in the broader gig economy as it increases in size, and the current COVID-19 pandemic has further highlighted the problems faced by gig economy workers. Governments have offered support to those unable to work, while companies have offered more benefits to those who continue to work to provide essential services. The question now is whether this momentum will continue beyond the current crisis.

Another key consideration is how companies manage increased spending on employee wages and benefits within the broader picture of corporate profitability. When investing in companies we feel it is important to look at the sustainability of their business models and their ability to generate high returns. It is hard to consider as sustainable those franchises that rely on downward pressure on their labour costs in order to maintain profitability. Companies that do not take pre-emptive measures could face unexpected costs if governments do introduce regulations. Even without government measures, there could also be a risk to the top-line if societal pressure were to tarnish brand image.

An increasing number of large corporations are claiming that their purpose is to benefit all stakeholders in their business, as opposed to focussing only on increasing the long-term value for shareholders. This includes taking care of their employees, and treating suppliers fairly. As the need for a digital on-demand workforce continues to rise, it is important that these hidden workers are not overlooked. 

 

[1] Kotaro Hara et al, A Data-Driven Analysis of Workers' Earnings on Amazon Mechanical Turk. ACM Conference on Human Factors in Computing Systems (2018).

[2] Mary L. Gray and Siddharth Suri, Ghost Work: How to Stop Silicon Valley from Building a New Global Underclass. (New York: Houghton Mifflin, 2019), p. 169. 

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