A CEDAH grows the legitimate labor market to include demand and supply on the fringes. It aligns with multiple priorities.
Why should government be involved?
The private sector has launched countless labor marketplaces. There is no shortage of expansionist vision in well-funded companies. Why not wait for them to get round to all-sector, genuinely worker-centric, underlying markets targeting the low skilled?
A purely profit-driven operation would have distinct dynamics:
- Creating the market: “Gig Economy” marketplaces advertise to attract a workable pool of buyers and sellers. That’s why they focus on precise niches: buying ads covering all types of work would be unprofitable. But it is joined-up access across all types of work that creates personalized routes to progression for workers. Only an Uber currently has the heft to attempt domination of broad-spectrum work. Do we want that to be workers’ only effective choice?
- Releasing the data: Give away all data on localized demand/supply/pricing? That’s not going to excite venture capitalists. They expect you to sell it; or guard it as a barrier to competition. But freeflowing data shapes opportunity for workers.
- Renouncing lock-in: Let users take their track record to any other market? Offer tools to speed them out of the market into traditional stable employment relationships? This kind of business plan doesn’t make sense in Sand Hill Road. Locking users out of any competitive forum is key.
- Targeted workers: If fast returns are the priority, forget low-income families. Look to students: work ready, computer literate, desirable for intermediaries, easy to aggregate.
- Market neutrality: Market after online market starts with admirable intentions, then buckles down to reality as investors gain prominence. Etsy (for handmade goods) is the most recent. The opportunities for manipulating a CEDAH to maximize operator income would be uniquely sophisticated.
There are markets that cover the waterfront of irregular work. But they are low-tech, established in a previous era, time-consuming to use and based on the classified advert model. Craigslist is an example, it can be genuinely useful. But it’s hardly a state-of-the-art exchange.
In the spirit of “why government?”, we could abandon publicly funded job banks. There are plenty of commercial job sites. But, across the political spectrum, there is consensus: robust employment is so important; and access to stable, neutral, low-cost, services so vital for low income households. A publicly accountable catch-all platform, integrated to all sorts of local interventions, must be in place to undergird economic stability and growth.
California, to take one example, initiated CalJobs to create additional choice for candidates often unattractive to commercial players. The operation has no agenda beyond boosting employment with minimal outlay by taxpayers. Yes, it’s stodgy compared to private sector facilities. But many of those facilities draw freely on CalJobs data, as do candidates and employers. It is an enabling utility.
High level benefits
- Underground economy: Cash-in-hand work, arranged online or off, typically equals at least 10% of GDP in developed countries. Enticing that into the legitimate economy starts with low overheads, convenience, immediacy, reliability, stability and scale in an alternative channel for bookings. A survey for Britain’s government found £400m of tax revenue for every 5% of those seeking Irregular Work who found it in the mainstream economy.
- Employer attraction: Suppose a company has two options for siting its new distribution hub. City A has a CEDAH, City B does not. Officials from City A can present data such as: “Today we have 12,821 hours of availability from qualified fork lift truck drivers with your potential location in the area they will travel for bookings”. The utilization rate, aggregated reliability and average hourly rates for truckers, packers, admin. staff and despatchers is minutes away. Where gaps exist, related roles can be shown and precise costs of upskilling demonstrated. Jobs at the plant can be filled from demonstrably qualified, reliable, resourceful, workers using their CEDAH records as applications. City B will have to conjure substantial tax breaks to compete with this turn-key operation.
- Employability: Surveys repeatedly show employers prize a range of core skills. Ability to use a computer, turn up reliably, absorb instructions and adapt will outweigh certification achieved in a classroom. All are inherent for someone who has successfully completed, say, 25 CEDAH bookings for 6 employers.
- Public services: Getting a patient out of hospital back home quickly cuts costs and improves their quality of life. But it needs on-tap support from the community. A CEDAH can offer a range of local workers who could be booked for familiarization visits, perhaps while their customer was still on the ward. Those he liked could become a pool booked day to day when their skills align with his needs. Pre-trained portfolio workers called as required for graffiti removal, street patrols, public surveys, data entry or bailiff duties can be more responsive and better value, than 9-5 workers being sent out from City Hall.
- Visibility: Currently, no-one knows what is going on at this level of labor markets. A CEDAH produces extraordinary detailed data to be collated, graphed, blended and parsed by individuals, employers or statisticians.
All sorts of labor market initiatives become uniquely cost effective and targetable with a CEDAH. For example:
- Ringfenced markets: Particular projects or employers can have their bookings reserved for target groups of workers. This can create a guaranteed flow of bookings for customers who are then given every chance to prove themselves and start building a track record.
- Navigators: Customers far removed from the labor market often need face-to-face support. Typically that comes from a counsellor in a central office. A CEDAH makes it cost effective to have navigators, who may, of course, also be selling their time for other roles, in the community. Someone who is long-term unemployed could be given 10 one-hour sessions with a local navigator with bookings made at times and places of mutual convenience each requiring completion of an online form recording progress.
- Sector pathways: Someone seeking a career in the security industry could be encouraged to combine studies with availability for booking by accredited companies needing extra personnel for events. They then graduate with qualifications and a verifiable track record of related experience across diverse employers.
- Inductions: To support target employers, the workforce system could facilitate induction sessions. A contact center for instance might have ongoing need for extra agents when inbound calls peak after transmission of a TV commercial. Local people wanting customer service experience could be put through 4 hours training, scheduled through the CEDAH.
- Micro-branches: Entire communities can become detached from the labor market, particularly where transport is thin. A CEDAH typically schedules face-to-face vetting in a branch before someone starts selling their time. Employment Services could incentivize pop-up branches; an intermediary’s member of staff attending a distant community center every Tuesday morning for example.
- Conditionality: Payment of public assistance can be conditional on being available for work, within certain parameters, for a certain number of hours each week. If the person then reliably fulfils whatever bookings they get within their parameters they are clearly not shirking. If bookings are not forthcoming it is not their fault and they should be supported.
Specific worker groups
Facilities above can align with specific programs.
Many territories allow recipients of public assistance to eke out their benefits by grabbing whatever work they can. A typical US State for instance provides unemployment payments for 6 months. But a claimant who does some work can earn 25% of their assistance without depleting payments. After that, a dollar earned is a dollar off benefits. But the unpaid benefits can be banked, extending the period of support until the originally allocated sum is exhausted.
This kind of impact can be forecast in advance as part of the Market making process.
Boost to outputs
Having a CEDAH in the mix of public employment services can help when management compile their annual report:
There are two phases of a CEDAH that need funding:
- Market making: This most likely requires a committed, locally connected, development manager plus an administrative assistant for 9 months. We can provide a manual, materials and weekly support on a consultancy basis.
- Market operations: A CEDAH is a sophisticated piece of kit generating messages some of which carry charges. This can be funded through: (a) annual licencing (b) a percentage built into the charge to an employer for each hour sold or (c) a combination of the two.
A well-launched market with plenty of immediate demand may be able to fund itself entirely from seamless transaction charges. Otherwise there may need to be an initial licencing period which transitions over 2-3 years to full transaction charging.
In some cases, public bodies could launch a CEDAH as a revenue opportunity. One British local government for example recognizes its extensive vetting of care workers and teaching staff creates an asset for buyers of homecare. They are looking at allowing its approved workers into a CEDAH while charging a fee within bookings for the verification.
A CEDAH launch project aligns with funds for innovation, workforce support, economic development, employer attraction, social cohesion, neighbourhood renewal and others.