EVENT SUMMARY & PODCAST: Leila Janah, Founder and CEO of Samasource and LXMI

EVENT SUMMARY & PODCAST: Leila Janah, Founder and CEO of Samasource and LXMI

On Oct. 4, Leila Janah, founder and CEO of Samasource and LXMI, discussed her two ventures and new book, “Give Work.” She supports a new solution to solving extreme poverty: give work, not aid.

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Samasource has grown to be the largest data services company in East Africa, employing 1,300 full time workers and securing contracts with some of the biggest technology companies in the world.

 

By Karen Lee, Burkle Center Intern, UCLA Class of 2018

UCLA Burkle Center for International Relations, November 2, 2017 — On Oct. 4, 2017, Leila Janah, founder and CEO of Samasource and LXMI, gave a free public talk on her book, “Give Work,” at the UCLA Anderson School of Management. The talk was co-sponsored by the UCLA Burkle Center for International Relations and the Anderson School’s Center for Global Management. Opening on a positive note, Leila Janah began by reminding the audience that “the world is unquestionably better in many regards in terms of the incidences of violence, disease; on all kinds of indicators, the world is better than it has been since the dawn of agriculture.” However, one of the biggest exceptions to this claim, and the “root cause” of many “major social issues,” is extreme poverty: “people living on less than a few dollars a day.” Traditionally, the solution has been to give aid, but she explained that “part of the problem is that we so often are attacking symptoms rather than the root cause, which is global poverty.”

Giving aid

The current system of charity and international aid began during the Marshall Plan in 1948 when the United States sent boxes of food to Europe to help families who were struggling to recover after World War II. This temporary stopgap during a time of emergency evolved into the national aid system the U.S. has today. Janah remarked that “what we found is that this system is really bad for local markets. There’s been a lot of work done on food aid, for example, on wealthy agro food businesses getting contracts to send food to countries that are in the middle of a famine, and while that might seem like a good idea, so often what results is that local farmers are put out of work and local food systems are thrown into disarray.” Despite “transfer[ring] about a trillion dollars in aid from Western countries to Sub-Saharan Africa alone,” she continued, “real per capita income for the poorest people has stagnated. We still have about 350 million people...living on the continent on less than a dollar a day in extreme poverty.”

Giving work

According to Janah, a far better replacement for the flawed aid system is to give people work. Janah presented data to support the claim that “the most effective aid program is to increase the real incomes of the lowest income people directly.” To increase real incomes, donors could either give cash directly or, even better, provide a job that pays a living wage. When low income people, especially women, gain assets, they can invest in food, education, healthcare, and housing, all of which greatly improves their quality of life.

Janah was inspired by Muhammad Yunus, who pioneered the microfinance model that made financial products and services more easily accessible and affordable to the poor. Janah wanted to reinvent the outsourcing model by applying his transformative concept to job creation in big tech and data companies for low income people.

In 2008, Janah started her nonprofit called Samasource, “sama” meaning “equal” in Sanskrit, with the mission to “help people move out of poverty by connecting them to digital work.” Since then, Samasource has grown to be the largest data services company in East Africa, employing 1,300 full time workers and securing contracts with some of the biggest technology companies in the world. Janah said, “It’s a really remarkable testament to the amount of talent in the world that goes untapped.”

The Impact of a Living Wage

Before joining Samasource, her workers in East Africa were earning around two dollars a day. This meant they did not have enough money to buy decent food. Janah observed that “many people in Nairobi are eating sugarcane as a primary source of calories because it’s so cheap. Not the best fuel for making good decisions, right?” By working at a living wage, workers feel less of the financial strain of pursuing education as well. Even if governments provide free education, materials and transportation costs are too high for some students, and the opportunity cost of not working during the day negatively affects family income.

After joining Samasource, workers started earning a living wage. They were able to stay out of poverty even after leaving the company, thereby permanently improving their lives. Janah remarked, “The first thing our workers do is buy healthier food and move to better housing, which immediately reduces their risk of all kinds of diseases and other conditions like violence that happens in the slum. We see them investing in school fees for younger people in the family and saving for college for themselves. And lastly, they get health insurance, so [there are] dramatically different health outcomes.” These improvements illustrate the impact of the give work model.

The mission now

Samasource is now profitable as an earned-revenue nonprofit, and Janah said this success could serve as inspiration for other companies to utilize a give work model. She said her mission today “is to figure out how we can scale … a ‘give work’ model not just in digital services and data work around the world but also in other industries where…social enterprises like Samasource can serve the needs of corporations.” Janah believes that “the biggest opportunity we have in reducing poverty is getting corporations to change the way they spend money.” Because the largest companies in the world already spend an immense amount on goods and services, she asked, “What if we could deploy some of this money ... to vendors like Samasource, that actively solve the social or environmental problems in the way they do business?”

Janah’s newest venture is a beauty company called LXMI, the first fairtrade and organic skincare brand sold at Sephora stores across the US. Janah applied her give work model to a consumer brand, showing that “you can create high quality goods and services using a social impact or give work model.” She closed her talk with the declaration that, “poverty is totally solvable if we change the way we think about how we spend our dollars.”