In previous posts, I discussed the nature of employment law as it relates to crowd work, and the problems involved in trying to classify crowd workers according to existing categories and in transferring rights of free assembly and collective action into virtual space. Now comes the controversial part: explaining why I think it’d be a good idea for the law to jump into the middle of this complicated mess and start telling people what to do.
For some lawyers and lawmakers, “because we can” is a good enough reason. Others might press for regulation because advising clients in a regulation-free market generates fewer billable hours. But for a moment, let’s at least pretend that we as a society ought to engage in some kind of critical inquiry before intervening in an as-yet unregulated industry. And, while we’re pretending, let’s presume that such an inquiry would be shaped not by political dynamics but by the best information we have regarding how the law works and how regulation affects economic and social activity.
I’m not an economist, so I won’t be discussing the potential influence of economic theory on regulatory policy in this area. Instead I’ll focus on how the law deals with scenarios, like this one, in which existing doctrine appears woefully ill-equipped. The first question should always be: Does a problem actually exist? (Contrary to what you may believe, many lawyers and judges are perfectly willing to leave well enough alone. We’re not all “activists,” and in some cases, the most activist thing one can do is to permit the unfettered private ordering of employment relationships.)
So does a problem exist? When I’ve presented my argument that Mechanical Turk Providers should be classified as statutory employees, and that Amazon should function as a joint employer, I’ve gotten a variety of responses from classmates and colleagues. A few agree right off the bat, perhaps out of ideological sympathy (or pity). Others reject the argument, deciding that to the extent the parties are legally connected at all, they are governed by private contracts. And some go a step further. They conclude that no one in this situation is really a performing the kind of “work” that any of our laws — employment, labor, or contract — ought to regulate. In other words, they’re saying that there isn’t a problem. At least not one the law can address.
As you might imagine, I vigorously dispute that view. My argument for statutory coverage may stretch a little thin in places, but just because crowd workers don’t fit the “statutory employee” definition does not mean they fall easily into another. And they are being paid for their work. Many of them (perhaps as high as 18%) rely on it to make ends meet. It seems self-evident to me that their work should fit somewhere on the employment law spectrum, and if there’s no space right now, we should make room.
Something Doesn’t Look Right
It is true that many crowd workers perform their tasks in spare time, while doing something else, or for recreational/entertainment purposes. And often, that kind of work ends up outside the scope of employment law. But that’s not because it gets performed in spare time, or while watching TV, or simply for fun. It’s because when we think of idle college students, retirees, and stay-at-home moms, we think of them filling their time with entertainment, volunteerism, or education-focused internships — none of which are covered by employment statutes.
The key thing to recognize here is that for the most part the work itself determines statutory coverage. Or, at least, that’s the way it should be (agricultural and domestic workers absolutely deserve protection, in my view, but were excluded from minimum wage and collective bargaining laws for political and cultural reasons). Regardless of who they are, or why exactly they perform these tasks, crowd workers don’t fit the picture of the type of workers legislatures, courts, and administrative agencies have traditionally chosen to exempt from statutory coverage. They can bargain independently on only certain crowdsourcing platforms, and rarely have an opportunity to maximize profits through business organization and initiative. In short, though they may think of themselves as entrepreneurs, they aren’t really the type of entrepreneurs that employment law tends to leave alone. Turkers and similar crowd workers would more accurately be described as fungible particles in an on-demand labor pool. In that sense, they resemble day laborers, migrant farmworkers, and urban domestic workers. Most of them deserve coverage, they just don’t have it yet.
The Law Abhors a Vacuum
I’ll reiterate at this point that I have no particular economic expertise. My amateurish assessment leads me to believe that crowd labor presents at least some potential for market failure (information asymmetry, deception, problems with competition and global supply, etc.). I readily concede that it’s probably too soon to give any weight to those conjectures. Luckily for me, legal scholars don’t really require an impending market failure to justify regulatory intervention. Impending legal failure will suffice.
If we have an unstable, growing industry, with no reliable law and an unclear picture of who may owe what duties to whom, we can end up with problems. Stakeholders can’t adequately assess and manage risk. Lawyers give bad, conflicting advice, or, worse, there’s no way to tell whether any advice is good or bad. Practices develop, and expectations settle, without any consideration of how they might fit or contradict our existing legal principles and public policies. The law abhors a vacuum. Absence of regulation may be a major boon to industry pioneers (such as the one that has been generous enough to grant me space on its blog), but regulatory vacuums can really wreak havoc on the rest of us.
“Wait and See” Created This Problem
I have heard some in the industry and in the cyberlaw field suggest that it may be too early to address legal problems presented by online work. They argue that we don’t know exactly how it will play out, and that premature regulation could unintentionally suppress the healthy development of online democracy, commerce, and information exchange. I agree that we don’t know how it will develop, and that in regulating now we run some risk of stifling valuable development. But this argument really underestimates both the flexibility of the law and our own capacity to identify and articulate our priorities. Regulation does not necessarily imply blanket prohibitions and severe criminal penalties. There are creative legislators, lawyers, and judges out there. For that matter, there is no reason crowdsourcing stakeholders couldn’t participate in crafting a flexible and somewhat open-ended or discretionary approach to regulating crowd work. And we ought to be able to figure out our objectives without knowing exactly how the technology and industry will develop. For all its faults, that is the function of the legislative process, and if we trust it at all, we can trust it in this context.
What we shouldn’t do is “wait and see.” “Wait and see,” or rather, “wait and ignore,” is what got us here in the first place. It may be that in order to craft an effective regulatory approach to virtual property, lawmakers require a more fully developed picture of VP transactions. But such procrastination has not helped American workers in the slightest. Our laws were out of touch before the Internet. Permatemps, day laborers, and other contingent workers are already falling outside the reach of laws that should protect them. We cannot afford to exacerbate the problem.
Moreover, now is actually a good time to undertake some kind of regulatory intervention. Once expectations have settled, and the industry has begun to function in a certain way, and accumulate its own political clout, legislators and judges will find it more and more difficult to set rules. Customary practices will become norms, and eventually transform into sanctified industrial principles that cannot be disturbed. I’m sure that suits companies like Amazon just fine, since they already play such a prominent role in the industry and will likely continue. But my inner organizer and my inner corporate reformer don’t want to see settled expectations become law simply by virtue of the fact that things happen to have turned out that way. Even if the emerging structure of crowd labor perfectly reflected pure economic principles, and could thus function happily and indefinitely without any correction, I still wouldn’t want to see that structure automatically become law. Neither should you, if (like me) you believe in the potential of crowd work to transform economies and provide unprecedented opportunity. We have a chance to do better by workers (and employers) this time around, and we should take it.
**Note: This is the opinion of the author, and is not necessarily shared by CrowdFlower or, say, its CEO.
John
I don’t deny that regulations can improve markets, but I see the argument above, in a nutshell, as:
“Here is something very new, that we don’t really understand, that maps poorly to our existing categories and definitions—and yet despite our lack of knowledge and understanding, we should act *now* to deal with a terrible situation, whose terribleness has not really documented in any systematic way. We don’t know what the effects of our interventions will be, and, of course, these policy interventions will be designed by non-experts who are only dimly aware of the phenomena they are tasked to regulate. However, we have good intentions and good goals, so it should work out.”
Assuming crowdsourcing/online work does reach the political radar, I presume that most politicians would employ some kind of buy-American/ America-first rhetoric and pander to economic insecurities. It’s naive to think they would vigorously protect the interests of non-voting foreigners who will ultimately make up the lion’s share of cloud workers.
The devil is in the details vis-a-vis regulation, but I think it’s more likely than not that in short order, we’d destroy online markets or greatly limit their extent & adoption. This would in turn foreclose the most exciting thing about online labor—the fact that it gives the world’s poor access to global labor markets.
The main asset of the world’s poor is their labor, and yet because of the limits we place on physical migration, they are generally unable to sell that labor to people with the demand and the means to pay. The enormous global dispersion in wages stems directly from this fact. Even minor changes in this basic calculus could have enormous consequences for human welfare. Increasing “virtual” labor mobility by even tiny fractions would dwarf the effects of other development strategies (e.g., see the World Bank reports on remittances).
For this reason alone, before we start fiddling w/ these new, currently very small markets, I’d like a lot more assurance that we will not end up strangling a potentially golden goose—a goose that’s already starting to lay eggs (e.g., the transition of the MTurk workforce to Southeast Asia).
Alek Felstiner
John – Thanks for the thoughtful response. I’m not sure your paragraph summarizing my argument constitutes a fair representation. It contains some assumptions that are not necessarily implied–or were directly contradicted—by the post. But if, as it seems, I failed to get my points across, here’s another shot at it.
First, I’m not sure how you’re defining “market improvement.” You could be talking about growth, or efficiency, or, I suppose, transparency and fairness. In any case, market improvement is only one among several possible regulatory objectives. I’m not arguing that we need regulation to make the crowd labor market more efficient, or more fair. I’m arguing that we need regulation in order to make it legible and sustainable, two attributes that I believe are necessary preconditions for a market to be “good” for society, whether or not the positive effects stem from maximum efficiency or complete equity.
One of the (perhaps regrettable) truths of organized societies is that regulation begets regulation. As crowdsourcing develops, it’s going to make less and less sense for it to remain nebulous and uncharted legal territory, when the rest of the map has such detail. One approach would be to define this type of work and then affirmatively exempt it from all potentially applicable laws. I don’t agree with that approach, for the reasons I stated, but it would certainly be valid and would address the broader problem of uncertainty. But without any “fiddling,” huge numbers of people are going to continue to operate without any clear sense of their obligations (if any) to one another.
Second, your critique presumes that regulation will necessarily create a burden. Regulation does not have to strangle. In some cases, it exists to a create a backstop, rarely if ever utilized, existing primarily to avoid conduct that might have arisen in its absence. Regulation can also loosen restrictions imposed by uncertainty. Even where regulation does create burdens, those burdens can be balanced or adjusted over time without the threat of “strangulation” ever genuinely arising. Things like reporting/disclosure requirements and organizing rights can add minimal burdens, for most employers, while creating the necessary structure for addressing problems if they do arise (e.g. child labor, which seems to come up often). Coverage thresholds and exemptions could be employed to prevent small enterprises or non-profits from being prohibitively restricted.
The problem is that stakeholders can always argue that one particular regulation or another will strangle the golden goose. The threat should be credible, and it should be evaluated not in the context of whether to intervene, but of how and to what degree. What bothers me, and I’m not saying that you necessarily endorse this viewpoint, is the idea that because a threat may exist, we shouldn’t even consider touching the goose.
Third, I readily agree that lawmakers could screw this up big time, through lack of familiarity, improper political influences, etc. The first part of the post acknowledges as much, in stating that the argument—like many regulatory arguments—requires some suspended disbelief. But saying that you object to regulation because you don’t trust the process, or the regulators themselves, doesn’t do much to address the actual question.
Fourth, just because crowd labor doesn’t fit existing categories does not mean that we don’t “understand” it, in the legal sense. That’s what I was trying to address in the post. For example, the categories regarding what employment law chooses to cover and exempt are based on policy judgments about the nature of the employment relationship: who has control, who’s independent in various ways, etc. Our “test” doesn’t cover crowd workers, but those same judgments (and the underlying priorities that shape our policy) should still apply. That’s why I referenced agricultural and domestic workers, as well as day laborers.
However, you did raise an important point about the amount of information currently available. We could certainly wait until we understand the industry better, until we have more to go on. That is a valid and popular regulatory approach. But I believe, in this context, that the risk of intervening too early is smaller than the risk of intervening too late. (Context is crucial, as I was trying to indicate with my analogy to virtual property).
If we intervene now, there’s a decent chance that the entire industry collapses, from fear and uncertainty about the viability of the business model. But that seems unlikely to me, unless the regulations are truly draconian. The potential is just too great, as we’ve both recognized. There’s at least a pretty good chance that some firms will fail, while others figure out how to adjust and reconfigure to work within whatever regulations are imposed. If we intervene later, we may have a better understanding of the problems and regulatory effects. Or we may have the same muddled understanding and scholarly conflict that we have about, say, manufacturing. What we’ll definitely have is millions of dollars invested, and entrenched practices upon which whole chunks of a working population depend. The prospect of imposing any kind of regulation that would substantially change those practices will seem ludicrous. Even if necessary, it won’t happen. You only have to look at financial regulatory reform to see how impossible it is to send an industry back in time and make it transparent, fair, or responsible. So we’ll either get ineffective regulation, or no regulation at all. The best case scenario is that we fix some of the problems that have already been around for far too long.
I would rather risk crowdsourcing growing slower, or only in certain circumstances, or not at all for a while, than deal with the alternative. I recognize that it could come out the other way, and that others might calculate the risks differently. What seems myopic (and naïve) to me is to presume that the only risk is in regulating prematurely.
Mark Atwood
You say you “would rather risk crowdsourcing growing slower, or only in certain circumstances, or not at all for a while, than deal with the alternative.”
However, I seem to not have the same fear of this nebulous “alternative” that you do.
Any negatives of this “alternative” seem to mostly be the fears of politicians desiring defined interest groups that can contribute votes and contributions, regulators seeking expansion of their authority, and other “stakeholders”, which appear to mostly be the shrouded voices of people who fear that their position, influence, wealth, and stability are threatened by the changes in the status quo.
And more importantly, the intelligent and energetic very poor people who’s lives are being bettered far far more they they ever would or could ever be by your impulse to be an “organizer” do not seem to be one the “stakeholders” of which you desire to champion, because flatly you want to tell them “all this money that you are making now, we need to slow it down, and slow it’s growth, while we wise and enlightened and smarter and richer than you people get a handle on how to control it”.
You seem also overly concerned with Americans, and not at all concerned with the people who utterly depend on this growing stream of money for their eat-or-die livelihoods.
Color me unimpressed with your “good intentions”.