Remote work risks exploiting workers in low-income countries

Remote work is allowing professionals in low-income countries to find opportunities, but sometimes at the expense of fair compensation and labor protections
Remote work is allowing professionals in low-income countries to find opportunities, but sometimes at the expense of fair compensation and labor protections
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The pandemic has propelled us into a gigantic, forced social experiment in how we work and live. For many people, the situation has provided an opportunity to re-imagine the future of work. Now, a consensus is emerging that there should be no going back to the pre-pandemic physical workplaces.

The Covid-19 pandemic accelerated transition to remote work comes with profound positives for employers and employees. One report found that employers are saving as much as $22,000 per full-time remote employee, by shedding office-related costs. For workers in low-income countries—especially those in the rapidly growing professional class in sub-Saharan Africa—the unmooring of skilled jobs from physical locations offers unfettered access to previously unavailable opportunities. But it also accentuates their disadvantages relative to their peers in high-income countries, chiefly around compensation and labor protections.

A case-in-point is South Africa. The country offers companies such as Amazon, Accenture, and IBM a large, skilled English-speaking workforce that can be paid about half the salary of workers in places like Europe or the US. The salary disparities are even greater elsewhere. In Nigeria, software developers report earning about $10,000 a year—some a little more, others considerably less. These lower wages also typically come with fewer protections in areas like hours worked per week and the ability to share grievances, brainstorm workable solutions and, when push comes to shove, collectively withdraw labor.

Lower wages paid for employees in Africa cannot be justified by the cost of living

Employers justify lower salaries as “location pay” determined by a lower cost of living. But in Africa, most skilled workers live in large cities that can provide the infrastructure they need to work remotely – namely stable electricity and high-speed internet and mobile broadband. That means the actual cost of living for an urban professional in Lagos or Nairobi is getting closer to their contemporaries doing the same job in cities where multinationals are headquartered. And at the very least, the differences do not justify salaries five to ten times below wealthy country rates.

It also does not explain the frequent differences between salaries for “local hires” versus expatriates who relocate from high-income countries to low-income countries, which can differ by up to 900%.

It’s true that in low-income regions like sub-Saharan Africa, there are a growing number of skilled workers encountering high unemployment rates. They are eager for jobs and welcome the trend of global firms capitalizing on the shift to virtual workplaces to expand hiring in their countries. But we can’t turn a blind eye to potential abuses of the digital workforce, just as we condemn the outsourcing of manufacturing jobs to low-income countries linked to fewer safety protections and labor rights.

Beyond the moral and social justice implications, it’s important to analyze how inattention to digital labor exploitation could affect the bottom line of multinationals.

With global firms like Ford and Deloitte offering employees an option to permanently work from home, it seems likely that a new system of protections for remote workers will become central to a company’s ability to attract and retain talent. That means companies would be wise to develop policies that globalize their corporate values – fair and equitable treatment and compensation for their workers wherever they happen to live.

A voyage of discovery into the self-sabotaging effects digital labor exploitation could wreak on companies reveals that much of the arguments in favor of “localized pay” misses the mark. The inception of digital labor, though transformative, comes with a swell of well-documented vulnerabilities ranging from the massive job insecurity that stems from an oversupply of labor, unpaid work, constant threat of competition, and being compelled to work during anti-social hours.

As remote work becomes more common, disparities need to be addressed

It is impossible to go back in time and return to a pre-globalized world of labor, just as we are unlikely to return to a pre-pandemic world of most workplaces bounded by walls and national borders. However, we must not be satisfied with a new era of digital virtual work that perpetuates a perverse system that only benefits those who thrive in it and provides little safety net for the most vulnerable.

Companies should make necessary changes to the power dynamic to enable negotiations for better pay and working conditions. Companies should abstain from contributing to the gyre of empty corporate-speak and ‘walk the talk’ of fair remuneration of their workers—and if not for the welfare of workers, then for their bottom line.

Ultimately, it is time for a fresh take on digital labor to breed a more equitable world of work. Many welcome a post-pandemic era where we are no longer placing geographic restrictions on the digital workforce. But let’s also remove the geographic restrictions that, for far too long, have determined who is entitled to fair compensation and humane working conditions and who is not.

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