A Tale of Two Smartphone Apps: Love and Ethics in the Time of the Travel Ban

It was the best of times, it was the Trumpiest of times.

I don’t write as often as I want to these days, and more often than not it’s for the same reason. In recent months, I find when I go to sit down and write one of these, then I read some awful news that just happened and decide that not only do I not feel like writing anymore, but wonder who would want to read any of my nonsense given what is going on elsewhere. The last time this happened was at the end of January, and President Trump had just signed his first executive order on immigration, the “Muslim Travel Ban”, which immediately barred even legal US residents from certain Muslim countries from re-entering the US. Slowly, stories started trickling in about people who left the country for a vacation and suddenly lost their whole lives. It was shocking not only in these personal stories, but also that a US president could have done this, and obviously not thought through the effects of his actions at all. Another reason I don’t write a lot anymore is that since all anyone talks about anymore is Donald Trump or Brexit, it follows that most of the things I’m thinking about are these two things, and there is already far too much stuff online already about them. So this isn’t about either of these things, it’s just set in this new world, against this madness that we all now reside in.

You were all alive at the time, and remember how the protests against the Travel Ban were organised very quickly, especially in major US airports. The largest protest was perhaps at New York’s JFK Airport, where thousands of people showed up to demonstrate against the ban. Out of solidarity, New York taxi drivers joined the strike, making it impossible to get a traditional taxi to or from the airport. People still needed to travel to and from the airport however, so the obvious replacement was Uber, which had been taking customers away from the traditional yellow New York cabs for years anyway. Uber, in situations like this with higher than usual demand, are famous for “surge pricing”, which entails charging higher than usual fares for car rides as a way to encourage Uber drivers to show up in places and at times where it wouldn’t normally be worth their while under normal circumstances. The company has caused controversy several times for seemingly profiting from terror attacks such as the Boston Marathon Bombing by, through means of surge pricing, charging customers high fares to flee danger.

In this case at the airport, there was high demand for Uber rides, but the company decided not to apply surge pricing in the area between the airport and the city. From their perspective, they were trying to help out with legitimate transport needs without attempting to profit from a bad situation. From the point of view of everyone else, they were not only crossing picket lines and attempting to break a strike, but through low prices were actively encouraging people to use the service, and thereby profiting from the Travel Ban. A Twitter campaign began, urging people to delete their Uber accounts. Apparently 200,000 people deleted their accounts over that weekend, a level high enough to force Uber to change the way they handled the process of deleting accounts.

The success of this campaign and the tarnishing of the Uber brand wasn’t very surprising: those on the left have severe difficulty in choosing their battles to fight, and Uber faces such grassroots opposition from taxi driver associations around the world so that any criticism about the company will be spread as widely as possible through networks that were designed for just this purpose. What did pique my interest that day was the news that the other main “sharing economy” company, AirBnB, was also receiving attention. The founder of AirBnB had announced that his company would aid in giving emergency housing to those affected by the ban. It was a very nice and welcome gesture, but it does needs a bit of context.

The Context

In simpler times (about a year ago), the type of thing that would light up the internet for a few days would be something like a “study” of the travails of a black person trying to get a booking on AirBnB in comparison to the ease of a white person. In a series of these, it became apparent that it was extremely difficult to get a place to stay on AirBnB unless you were white, and preferably straight. The conclusion that everyone drew from this was that AirBnB was racist, and possibly homophobic. The people at AirBnB took great offence to this, and vowed to solve perceived discrimination on their site. The culmination of this was that from November 1 2016, anyone logging into the site had to read and agree to a new user agreement, forbidding discrimination on both sides. If you want to rent out an apartment on AirBnB, you have to agree to rent it to anyone regardless of colour, sexual orientation or religion. Similarly, those seeking accommodation were encouraged to rent from all available properties, rather than just those offered by their preferred race or creed.

Ever since I received the email from AirBnB at the end of October 2016 about this proposed new user agreement, I have been planning to write something about it. Look, its intentions are obviously noble, and I would like to live in a world without discrimination, but to think it can be solved by a user agreement is one of the most arrogant things I have ever heard of. I might write about this again soon, as it is the topic of my PhD dissertation and it demands further exploration than the quite right-wing explanation I will give here for expediency, but the arrogance shown by AirBnB here is not that they think they can solve discrimination, it is that they see discrimination as a decision.

Deciding to Disciminate

To the AirBnB people in their start-up community, where they are connecting people through their app and website, rather than taking jobs away from people in the hospitality industry through the exploitation of legislative gaps in taxation and insurance, good people wake up in the morning and decide to treat everyone equally. Bad people wake up and decide that they don’t like certain groups. If only these bad people would stop doing this, then there would be no discrimination, and everyone would be equal.

In reality, discrimination is not like this: most discrimination is subconscious and ultimately involuntary. There is no one on this earth who can say they are not racist, sexist or homophobic, because they really don’t know, and in truth they themselves are probably not the ones who should be the judge of it. I like to think of myself as accepting of everyone, yet at times, and often very suddenly, I am shocked at how I behave in certain situations with people who are a different race, religion or sexuality than myself. I can check it, but often I only realise my behavior afterwards. The reason discrimination is so persistent is not due to choice; it is far, far deeper than that. I would even go so far as to say that it is a very depressing part of what makes us human.

This is not a popular view of discrimination however, and many would have us believe that it is something we can solve by simply being good people. AirBnB say that if you want to use their service, then you have to stop hating black people. That’s fair enough, but what if you don’t hate black people, and receive many requests on AirBnB, and suddenly you receive an email from the company telling you that through analysis of your rejections against acceptances, you reject black people a lot more than anyone else. You didn’t know it, but you’re a racist. And now you’re banned from AirBnB.

I’m not saying that we should all stop worrying about discrimination or that it will solve itself, just that its stigmitisation as something awful is not necessarily always correct. Gender quotas on management boards and parliamentary elections do not exist to enhance equality today, but to normalise gender equality and thus limit this subconscious discrimination in the future. Exposing and defining various forms of discrimination is helpful. Naming and shaming individuals who are perceived to discriminate is not. My grievance with AirBnB is that they expected all their discriminatory users to be aware of their discriminatory behaviour. It’s quite a high horse to ride on. While they have shown through their user agreement roll-out that they are attempting to tackle discrimination on their platform, there is no doubt in my mind that it will have no effect whatsoever, and new “studies” exposing AirBnB discrimination are inevitable.

Back to Reality

What’s this got to do with AirBnB’s actions during the Travel Ban, and with the announcement of housing refugees and US citizens affected by the order? It’s hard to be cynical about something like this, as they are in a position to help people out, and hopefully they have helped a lot of people throughout this period. However, if you have been following the company’s issues over the past year, it is also hard to avoid the fact that they are using the Muslim Travel Ban as a marketing stunt. The week after the travel ban, the company aired an ad during the Superbowl emphasising their inclusiveness policy, and just this week sent out an email to all their users about how inclusive they are. Again, their actions in helping real life victims are pure, but are their intentions any different from the criticism of Uber that prompted such vitriol? At the time of the #deleteuber campaign, the main message was that people would not tolerate businesses trying to profit from Trump’s policies, yet I would argue that AirBnB have done just this.

The moral quandary here is that AirBnB is doing good things, yet it is using a political situation to reposition its brand to a place that is comfortable with the values of its founders. When data inevitably comes back in a few months that its user agreement pledge had no effect, AirBnB can now point to their actions during the Travel Ban as a means to deflect criticism, and they are proving this by keeping everyone very aware that they are doing through massive advertising campaigns and reminder emails. All that could be said of Uber’s intentions were that they were questionable; the intentions of AirBnB much less so. If you’re going to punish companies for attempting to profit from the eccentricities of President Trump, consistency is necessary; the actions of Uber cannot be criticised while the actions of AirBnB go unnoticed. That, and at some stage we will all have to admit to ourselves that we discriminate, perhaps even every day.

 

Progress, Discrimination, and Brexit

 

It’s easy to forget, but Brexit was a big shock when the result was announced. What is more shocking is the effect it can have an our view of the world, and also the fortunes of individual British people.

You can tell I have had a lucky life, because I don’t think I’ve ever been any more shocked than I was when I woke up on Friday June 24th 2016 to the news that the United Kingdom had voted to leave the European Union. I had been following the referendum campaign closely, and had come to the conclusion that however close the forecast polls showed the result would be in the run-up to the vote, angry British people would come to their senses and opt to make the best of what they had with their relationship with the EU (or else not vote at all). On the evening of June 23rd I was actually writing a (still unpublished) blog while at the same time looking at the early referendum results. By midnight, Nigel Farage had conceded that the Leave campaign had lost, and all seemed right in the world, so I went to bed. When I woke to switch off my alarm clock at 7:30 the next morning, there was a news alert on my lockscreen informing me that the UK had voted to leave the European Union.

Waking to live footage of Nigel Farage’s face completely consumed by an all-conquering grin was not a world that I ever imagined, and that morning really had a surreal, out-of-body experience vibe, like an alternate reality showing us what could happen if we really wanted to shake things up in the world. There was David Cameron swallowing his own tears on live TV by 10 O’ Clock in the morning. There were people who voted “Leave” on TV saying how they didn’t know their vote counted, and there were the main people who were to benefit from the result – Boris Johnson and Michael Gove – dodging questions and looking quite conspicuously like they had never wanted to win at all. Since that morning, history has been rewritten with the benefit of hindsight to portray the Leave vote as an absolutely inescapable inevitably ever since the UK joined the European Economic Community in 1973. We have had time to get accustomed to the result, so now we think it was obvious that they would vote Leave. But not many people said that on that morning, or on the preceding few months of the referendum campaign.

I have to admit that I was deeply depressed for a day or two after the referendum. I was lucky as my job required me to research the causes, consequences and intricacies of Brexit all day, so being distracted by the news actually made me work more. While many things were depressing about Brexit, the thing that got me most was that it destroyed my idea of the world as a place that was continuously striving for progress. Although bad things may and do happen, from terrorist attacks and war to the financial crisis, there had always been a sense, despite reactionary forces, that society was dealing with things and was moving forward. Wars end, bad election choices such as the two-term George W. Bush era were inherently limited, and there was always the possibility that something better was around the corner.

Brexit was different, because while both campaigns had portrayed the referendum choice as very simple, and was worded very simply as a yes or no question, the ramifications of a No vote were vast, unpredictable, and absolutely irreversible. If the UK leaves the EU, Russia will be admitted to the bloc before the UK has any chance of getting back in. It will take decades for the UK to adjust to Brexit, and perhaps a century before the UK is ever seen as anything other than an isolationist, xenophobic dinosaur still in love with its glory days of empire. A simple question was asked on June 23rd, but that didn’t mean there wasn’t a wrong answer. While the EU is far from perfect, it is absolutely undeniable that the existence of the union has made Europe a better place. The UK voted to leave this union, and decided to try and make it alone.

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A Market for People

While there will be a diverse range of consequences for the UK and Europe, what is interesting to me is the effect of such a change in legal status on individual people. I am a labour economist, so I study the supply and demand for people in the marketplace of employment. Questions I research include the formation of wages, the strictness of employment protection, the effect of discrimination on hiring decisions, or the consequences of migration on the domestic economy. One of the founding blocks in labour economics is the wage (or earnings) equation, which shows the wages of an individual as a function of education, experience and other factors. If I have 6 years of third-level education (a Masters degree) and 5 years of work experience, I should theoretically earn more money than someone who has 4 years of education (a Bachelors degree) and 5 years of work experience. It is possible to isolate discrimination in the labour market is by aggregating a few thousand of these equations, and discovering that men and women (or black people and white people, gay people and non-gay people etc.) who have equal experience and education are paid differently. When you see a statistic that calls itself something like “the gender pay gap”, you should hope that they use this type of analysis, otherwise the statistic is useless.

Discrimination isn’t all about racists, far-right politics or sexists however. The most fascinating thing about discrimination is about how easy, and understandable, it can be.  Imagine you are an employer conducting job interviews, and have narrowed the field down to two candidates. Both jobseekers have equal education and experience, and have performed well at the job interview. One of them is a national of your country, and the other is from abroad. While the two look comparable on paper, there are certain unobservable differences: however fluent the foreigner is in the language of your country of operation, he/she will never be as good as a native speaker, and every few days a few seconds will be lost explaining some turn of phrase that he/she has never heard of. Over time, this would add up, and overall, it follows that it is much easier to hire the domestic candidate. While this is understandable, the decision was based on uncontrollable characteristics of the candidates, and thus is the dictionary definition of discrimination. In this hypothetical situation, the foreigner would need to be compensate for the language issue by having more education and experience than the domestic candidate to be even make it a difficult choice for the employer about who to hire. A compromise might be paying the foreigner (or woman) less, but that’s another story.

Brexit and Discrimination

The consequences of Brexit are very interesting when using this level of analysis. While we don’t yet know exactly what kind of a Brexit we will end up with, let us assume that Farage and Leave get what they wanted and end Freedom of Movement of People, and that the EU does not back down, and reciprocates with regards to British citizens in EU countries. Britons need a visa to work in the EU, and citizens of EU member states need a visa to work in the UK. In the previous pre-Brexit regime, UK citizens had the right to work in any EU member state and vice versa, but this right is now gone. Think of the wage equation in the former regime for a competition for a job between a British citizen in an EU country and another EU citizen in the same EU country. Let’s assume language isn’t an issue here as both candidates are non-native speakers, and both have the same level of the host country’s language. In the former regime, it would come down to further unobservable characteristics (of which there are many), but what about the post-Brexit case, where one of the candidates would require a work visa, while one doesn’t? If the two jobseekers are equally qualified, the obvious choice would be to take the uncomplicated road and go with the EU citizen rather than the administration required to hire a non-EU national.

What this case really means for British people is that on the continent, they soon will be in a situation where they will have to work harder to qualify for a job that in a pre-Brexit world, they would be instantly qualified for. In real terms, in the case of a hard Brexit, it means that the work experience and education of British people in Europe will soon be worth less than it previously was. British “expats” within the EU will see their human capital depreciate overnight, as they will lose their privileges to roam free in their continental playground. While this case may be familiar to Americans, Australians, and those from Asia, Latin America and Africa, those people are accustomed to this treatment. It’s going to be all-new to the post-Brexit UK.

Of course, the opposite is also true. Citizens of EU member states who apply for jobs within the UK will similarly see their human capital depreciate as a result of Brexit. The main differences here would be a) they did choose this situation, as the only people who had a choice in the matter were the UK voting public, and b) Citizens of other EU member states have 27 other countries to choose from, where they are free to work as if they were born there. Citizens of the UK will never have that option again. This is precisely why it is interesting: by voting for Brexit, the UK has set up a situation whereby it limits the freedom of its own citizens while at the same time degrading the value of their labour. The United Kingdom has voted in a resolution that will lead to discrimination against its citizens, and these citizens freely chose to do it.

Progress

The Brexit vote was depressing for a number of reasons: from a campaign point of view where both sides used variations of fear and hate to appeal to voters, and for the possible consequences of the UK leaving the EU. While there were legitimate reasons for the UK to want to leave the EU, these were not the reasons why the Leave campaign won. Leave won based on lies, hatred and ultimately the stupidity of the majority of British people in believing that there was an easy way to opt out of globalisation after decades of being deeply embedded within it. It was a vote against the modern world, and ultimately a vote against the progress of society. We will all get used to this new reality, but it is hard to see the future being great for the UK as a country and for all its individual citizens, who have all lost countless rights and privileges as a result of the vote. Inarguably, it is hardly a sign of progress when it is a fact that right now, while the UK is still an EU member, British people currently possess more rights than their children, or grandchildren ever will.

Discriminomics

A previous post answered a question that I am often asked when I tell people about my research, namely: how can one be an economist without focusing specifically on money? In that post I also mentioned that my research is based on discrimination, and that people always wonder what that has to do with economics. Discrimination is an emotive subject, one that inspires strong personal feelings for most people (hopefully against it). Such passionate issues surely have no place in the cold, stoic field of economics. Fortunately, economists have worked out ways to remove all of this passion and emotion from the subject and analyse it as an issue like any other. First of all, discrimination is not sexism, nor racism. It is not a woman getting sexually harassed in the office. It is not Roma being repatriated to Romania from France. Discrimination in the sense used in economics, is simply treating one group differently from another. This word ‘treating’ is ambiguous, since it is difficult to quantify. Therefore a place of interaction is needed , in order to provide information about how one group is treated differently from another. The best place to do this is a place where people are traded for different prices, according to their specific characteristics. In the absence of an actual slave market, researchers in economics settle for the labour market, where employers buy and sell employees on an unimaginable scale all over the world.  There are two main theories in economics about why employers discriminate against one group of employees in favour of another, ‘Taste for Discrimination’ and ‘Statistical Discrimination’. My research centres on gender discrimination, so I will focus on this.

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The theory of ‘taste for discrimination’ is fundamentally an argument based on the flawed nature of humanity. Some people just don’t like certain people, for no apparent reason. One could also argue from an evolutionary perspective that we are conditioned to be wary of those who are different from us. This argument would be more relevant to discussions about racial discrimination, but it is still applicable to gender discrimination. As many men and women will know, a substantial percentage of each gender mistrusts the other, for various reasons. Unfortunately for women (although this is definitely changing), employers are mostly men. For whatever ill-conceived reason, an employer may be a gender-discriminating employer. Therefore when considering equally qualified male and female candidates for a job opening, the employer will always choose the male candidate. The reason for this is that because of the employers ‘taste’ for discrimination, hiring the woman would ‘cost’ more to him (assuming the employer is male) than hiring the man, if there is equal pay across genders.  If he hired the woman, he would have to endure the hardship of her presence alongside paying her a monthly wage. Therefore, the only way the woman is hired for the job is if the employer pays her less than he would have paid the man. So much less so that it compensates for the burden of her daily presence. Yes, this is a real, respected academic theory that attempts to explain why women are paid less than men.

Statistical discrimination is much easier to understand, as while the previous theory was grounded in base humanity, this one is based on the dark side of another inescapable fact of modern life: capitalism. Capitalism favours profit above all else, and therefore from an employer’s perspective the best workforce is the workforce that generates the most profit. It is difficult to quantify the contribution of most employees to the profit of an enterprise, and therefore certain substitute statistics must be used instead. As with the ‘taste’ exposition, we have to imagine a decision from an employer about hiring a similarly qualified man or woman for a job. Each looks like a worthy employee, however a tiebreaker is needed. It is proven statistically that women take more sick days than men over the course of a year (really). Mostly this has been attributed to menstruation (seriously, there are studies done on this), however it still affects productivity, and therefore profits for the employer. Similarly and more obviously, the woman will more than likely take a career break, with pay, during her time employed in the available position, as a result of maternity leave and its associated regulation. A profit maximising employer, in the absence of regulation, will always hire the male candidate in this case. Unless of course he can hire the female candidate for a lower wage that would mitigate his risk of hiring a potentially profit-sapping employee.

While theories are interesting to formulate, what economists are really interested in is how to empirically measure an issue under analysis. Both of the discussions on theories above ended with an explanation for why women are paid less than men. This is because from the beginning, researchers are set with the task of explaining why and ultimately quantifying how much women are paid less than men, the highly publicised Gender Wage Gap. The gender wage gap quantifies the difference between what a man is paid and what a similarly qualified women is paid, in a similar occupation. This research has informed governments all over the world, and led to numerous policies being enacted in order to rectify these labour market malfunctions. Equal opportunity laws, gender quotas, affirmative action have all been justified in debates due to the work of labour economists working in the area of discrimination. Economists, while seen as cold and stoic, can also add much-needed weight to the argument of emotive subjects. This does however lead to those economists stripping the subject down to its bones, and of everything that made it so emotive in the first place. The justification for this is simple, as economics aims to describe the world as it actually is, as opposed to as it should be. In this sense everything I have written in this post is Positive, as opposed to Normative. In economics therefore, positive research is undertaken in order to inform policy advice for those normative few who wish to change the world into the way it should be.