Digitization and poverty

by Marcus Schwarzbach

[This article published in August 2021 is translated from the German on the Internet, www.ossietzky.net.]

"We need to push digitization," demand Christoph Neuberger and Sascha Friesike of the Weizenbaum Institute's board of directors. The Corona crisis, they say, is the chance for a second "Internet Spring." The connection between digitalization and impoverishment is readily overlooked. "What worries me is the speed of technological change, it's really unprecedented that within ten years entire sectors can disappear," warned Marcel Fratzscher of the German Institute for Economic Research early on.

Eighty percent of managers tried out new tools and technologies in the pandemic and learned a great deal about digital transformation, according to a survey of around 500 CEOs, board members and digitalization managers conducted by Bitkom Research. "In the Corona pandemic, companies have been forced to introduce home offices and digitize processes - and very many have noticed that this is not just emergency surgery, but brings fundamental benefits," comments Bitkom President Achim Berg. Corona is becoming a "game changer". Digitization in companies is receiving a powerful boost.

New technology is capturing more and more data. Collects more and more data. In companies, Big Data often means the use of algorithms to evaluate all data from all work processes as automatically as possible, which supervisors can then access. It is evaluated how long it took the employee to talk to a customer or process an application. The next step is the emergence of forms of work organization that rely heavily on external control: Work steps are increasingly dissected and employees have little or no decision-making leeway. They are monitored. The next step is automation. A process that is already well advanced in factories.

Technology is replacing human labor. Some online advice is taken over by machines via chat-bots; jobs are being cut in customer advice or luxury food production, by packers or transport workers, by toolmakers or power plant workers. It is unclear how many jobs will be eliminated in concrete terms. A widely acclaimed study by Carl Frey and Michael Osborne estimates that 47 percent of U.S. jobs in manufacturing, retail, or service industries such as medicine, banking, or architecture are at risk. Jobs for low-skilled workers in particular can easily be eliminated, and the path to Hartz IV and poverty is not far away.

But they are not the only ones whose jobs are at risk. It is true that the work of many highly qualified employees can no longer be controlled by simple methods. A supervisor can hardly influence the complex work of a programmer with instructions in the sense of "command and obedience"; for that he lacks the insight into the details of the work. But here, too, there are management strategies, such as "digital leadership": "The task of managers is to create a framework in which employees can develop," proclaims Thorsten Petry, a professor at Rhine-Main University of Applied Sciences. At first, this approach sounds like nothing more than the flexibility demanded of workforces - and, from the employees' point of view, does not appear at first glance to be a fundamental change from the current state of affairs. But there's more to it than that: the goal is a fundamental reorganization of work processes and work assignment. Also with the help of the home office.

Many employees still see the home office as a success model because of its greater sovereignty. And (also) at his home office, the employee decides independently HOW to achieve the goal. Instead of direct instructions on how to perform a job, highly skilled employees organize their work processes themselves. But for home-based workers, companies have changed the way they manage work in Corona times. Increasingly, they are using work packages "to direct and monitor people in the home office," explains Swen Schneider, a professor at Frankfurt University of Applied Sciences. Individual tasks and assignments, like individual employees, are increasingly viewed according to the cost-benefit principle. As a package. But as employers think more and more in terms of projects and work packages, says Schneider, once such delineated work packages are documented and comprehensible, management quickly realizes that it "does not necessarily need permanent employees. The work can also be done by freelancers. And they can be based anywhere in the world. Even in places where labor is significantly cheaper than in Germany". The consequences are far-reaching: employment relationships or predictable and adequate wages no longer exist in this way. The path to the gig economy. The gig economy refers to a comparatively new part of the labor market. Small jobs that are awarded at short notice to a large number of independent freelancers. Just as musicians shimmy from one paid gig to the next, Uber drivers or Deliveroo messengers, for example, shimmy from one job to the next. On platforms such as Myhammer or Taskrabbit, tradesmen or cleaners are hired out. On Twago or Upwork, companies can assign individual jobs or projects to designers, translators or copywriters.

Thanks to high-tech capitalism, even the procedure of firing someone is cynically becoming a commodity. Berlin-based startup Twinwin "helps companies get rid of their employees," reports businessinsider.de. The task is performed by a virtual "separation manager," a software developed in-house. The technology explains the individual steps for termination and provides formulation aids in advance, for example for warnings. Each automated separation analysis costs a fee of 60 euros, a flat rate subscription is also possible. "In the past, an employee was with the same employer for years; that's different today," says Max Bauermeister, pleased with his business model. This is also how poverty can be turned into a business.

Marcus Schwarzbach is the author of the new isw-wirtschaftsinfos, No. 59: "Corona: Profits first - instead of health" / www.isw-muenchen.de