In low-to-middle-income countries, there are employers and workers who lack a central area to place job postings or find jobs with ease. In Tanzania, this lack of communication causes employers to hire workers from within their own villages, limiting the reach of their network. This limitation, along with unclear instructions and expensive job search costs, ultimately leads to a broad pay range for similar work. To resolve this issue, a researcher tested how an SMS-based messaging app can be effective when people search for a job in rural Tanzania. The findings were that the creation of this SMS app in Tanzania more easily allowed employees to connect with employers and reduced the wage gap.
No Internet Needed
While the SMS app is similar to online job search websites, it does not rely on internet access. The app simply asks a few important questions about their searches. For example, the app asks employers and workers to identify how much they are willing to pay or how much they wish employers to pay them. The intention of this feature is to lower business deal costs, but it may persuade users to bargain and alter the wages. However, the SMS app can also assist in updating the dispersal of wage offerings in the labor market.
When an employer posts a job, the job listing provides answers to frequently asked questions such as the wage, job type and date the job starts. Once qualified workers receive the advertisement, employers can immediately contact them, thereby lowering the costs it would take to meet in person. The advertisement includes a specific job code, so the workers text the correct code to the employers to apply for the position. After the employer receives the application, they exchange phone numbers and names with potential employees in order to further discuss the details of the job.
How the App Works
Employers can announce job descriptions through an SMS that all listed workers in the neighboring areas receive. This enables employers to extend their offer to more workers instantly. When a worker responds to the job advertisement, the app immediately directs the worker’s application to the employer. After experimenting with the app for one agricultural season, the research found that a large number of villagers began to use the SMS app and were finding success in connecting workers and employees. While the app does not increase the number of jobs available, it does decrease the wage spread.
Decreasing the Wage Gap
The agricultural production of Tanzania is self-reliant, and while Tanzanian families typically carry out their own farming responsibilities, farmers still hire some daily laborers to help. The payments for these workers range from $1.20 to $6.50 per day. However, the outcomes of the assessment established that the SMS-based messaging app lowered the wage gap in the villages, which means employers paid workers wages that matched the average payment for that job. High-paying employers contributed to this reduction by lowering the amount they paid workers, while the low-paying employers raised wages. These results suggest that the app could successfully cause a more permanent reduction in the wage gap and job search costs and create a more efficient labor market.
An SMS app that announces obtainable jobs and offers simple job applications through the short messaging system has the capability to upgrade the performance of the agricultural labor business. It will be much easier for workers and employers to look for each other because workers will have access to new job openings, and employers will be able to consider potential hires who are not accessible in their current labor network. This system of hiring is necessary because employers routinely have trouble finding new and professional workers, so they have to resort to rehiring previous employees. This lack of communication between villages results in the workers obtaining contrasting wages for comparatively similar agricultural work. Therefore, the SMS app is necessary to enhance the networking of employers and workers.
The SMS app in Tanzania is accessible because about 93% of the Tanzanian population owns quality phones, and 84% are highly literate. The app lowers the cost of job searching, makes wage rates more comparable and announces available jobs to instantly connect employees with employers. This networking expands the possibilities for employers and employees, especially in Tanzania’s agricultural industry.
– Shalman Ahmed