David Flatley > Actual RIA info > Adobe Flex > What is oDesk all about exactly?
What is oDesk all about exactly?
In a recent post, I made a comment or two about some quality projects I’ve found on oDesk.com. Apparently, some have questioned my understanding of oDesk, so I decided to take a deeper look into the site and their services.
Hmmm, yup, says here:
Welcome to oDesk, the online staffing marketplace connecting businesses (Buyers) to remote workers (Providers).
Seems to me they provide a marketplace for connecting businesses to remote workers. This isn’t exactly a new concept, there are other sites out there not unlike oDesk (guru.com, gofreelance.com, ifreelance.com) and the list goes on and on.
All these sites are more or less the same deal, companies post projects and look for workers to make a match. Outsourcing I like to call it, though I hardly coined the term, you may have heard of it before. Nothing wrong with the sites themselves, including oDesk. Some sites provide better deals than others of course, and some have more quality project postings than others. Let’s do a comparison for giggles.
In my first search on Guru.com, I looked for Adobe Flex jobs and found about 6 posted, with a low budget of $250 and a high of over $25,000. A good number of projects I see listed on Guru.com seem fair enough, there are of course some that seem a pinch pathetic. Not Guru.com’s fault of course, but some companies, it seems, would like a whole heaping wad of work done and would prefer to pay next to nothing to have it done, and have it done quickly I might add.
I know this may come as a surprise to some of you, but I’ve found far more of these types of projects listed on oDesk.com. In one quick search for current project listings, I came across such winners as “Cropping images in Photoshop” where the Beijing company seeking work to be done states:
We are offering a rate of $5 for a batch of 500 images split into 2. There is potential for further batches upon completion of this batch.
Although that would not only give you tons of experience in image cropping, as well as a great spotlight for your resume, by the time you get done with 1000 images you would have earned yourself a cool $100 bill! Now I don’t know about you, but the people who pump electricity into my office, the cable company, the food store, the gas station, they seem to randomly raise their rates due to the “cost of living” and $100 doesn’t go very far these days. If I had any fingers left after the cropping of 1000 images, I might not be able to grasp my $100, let alone toss it over to the aforementioned companies.
Let’s look at another project posted on oDesk.com. Here’s another, oh wait, is this a project? For a budget of $5 (literally) The listing says:
I am programming in ASP and using MYSQL database I just need the code for the following: 1. Say there is a tab on the navigation bar that says Buy. When a user points on buy a drop down appears with Land, Apartment, etc. If the user clicks on Land then I want all the land listings to display. So I need a query that would allow me to get all the land listings from my database and display on more …
Hold on hold on wait wait wait……I’ll need my $5 now if I’m going to read the rest of that post, I’m getting a headache. Again, not oDesk’s fault, it’s the people posting projects on these sites that give me indigestion. So to clear things up, follow me here, if I know anything about oDesk.com at all, its a guru.com-like, project outsourcing website where global buyers match up with global workers and either both parties end up with a handsome deal, or one party makes away with the goods while the other takes a good 5 across the eyes.
Does this sound like a reasonable assessment? Again, nothing against Mr. and Mrs. oDesk and family, but maybe they should weed out these types of silly projects. Or maybe they don’t mind those types at all? One of the testimonials on oDesks’s site says about a customer:
He has been using oDesk’s online service to find development help and said he works most closely with a programmer in Russia who is paid $15 per hour. A U.S.-based programmer doing similar work would expect hourly rates of $60 to $120
Firstly, to that I say, nay, not always so. Some of us American programmers would be willing (and have) worked for a Digg click, or maybe a trackback. In the near future, I may not be above doing a quick banner for a sandwich barter type arrangement. Secondly, being an American programmer as I am, this means one more job overseas for money I couldn’t compete with. Why? Because my cable company, the people pumping electricity into my office, the food store etc won’t be happy when I offer them a ham on rye as payment (barter deal once again) because I’m too poor to afford to pay them the frog skin.
The same company, however, would expect me to pay full price for my sneakers, aspirin, big screen tv that will be obsolete inside a year, and so on even though I may collect payments via an order to Subway.
Another company testimonial on oDesk.com states:
Drive your labor costs with oDesk, which makes it easy to find talented programmers on the cheap.
To add “mwahahahahhahaha” at the end of that sentence would most likely get even more buyers in the future. Here’s another company who wrote:
oDesk continues its efforts to improve tools that track jobs and knit together virtual workers from India to Russia ever more closely with the home office.
Very global of them. Here’s two lists of providers testimonials and buyer’s testimonials for your consideration if my post has you anxious to jump on in and sign up right away. You can find such buyer testimonials as the one who speaks almost lovingly of his Russian programmer he found on oDesk:
He is as talented as the best I have ever hired and he is easier to manage than many other programmers two offices down the hall.
Used in this context however, I’m not sure that I’d add that testimonial to my website if I were the Russian programmer. This being said, think of me what you will, vote for my post or shart upon it, I care not. This is a matter that strikes home for me, outsourcing and watching companies manipulate workers whether they be American, Russian, Indian, or even from a country that sounds like mangina. If we keep up at this rate, we’ll find ourselves working for such circus sideshow acts as
Hey David,
1) Glad to hear that you’ve received a few quality projects thru oDesk.
2) Glad that you’ve taken the time to scour the oDesk network.
3) Sad that you’ve focused only on the lowest quality jobs available in your post.
I hope you’ll agree that there are plenty of “good” jobs available on oDesk as well as the low-quality ones you’ve posted above. At oDesk, our main goal for this year is to focus on user quality, and that means both buyers and providers. We hope you’ll stay involved and help us improve the marketplace for all users.
Cheers,
Josh Breinlinger
oDesk
Hi Josh,
I haven’t actually received any, or applied for any projects through oDesk, of any type or quality, but thank you. In fact, I haven’t had any projects from any outsourcing site to date. I get a great deal of my projects primarily from salvaging left over projects that have been outsourced beyond recognition.
Scour is a strong word, but as this post originated from a remark I received challenging my knowledge of oDesk, I’ve decided to take a deeper look and give it a fair shot.
Sad indeed is my focus on the lowest quality projects listed though not only on oDesk.com, but guru.com, ifreelance.com, gofreelance.com and so on. The focus of this post however was two-fold; 1. To give some clarity on some of the listings I’ve seen like the image cropping for $5 per 500 images, and 2. Outsourcing overseas for cut-throat rates really stinks….but only if you’re an American developer, not if you’re an American company who’s currently outsourcing.
I definitely agree, to be fair, that I have seen some decent looking projects listed on oDesk. I was simply pointing out some of the ones that get hardly any coverage. On top of that, who’s to say what’s a good project? Cropping 10k images for $100 could be one man’s ceiling, unfortunately though, if you’re an American developer, it’s the electric company’s floor.
I have seen some quality jobs, listed on oDesk, Guru, iFreelance etc as well as the ones that make me chorttle almost as powerfully as when I watch an orangutan peeing on itself at the zoo.
I will, however, definitely always add my input and try to stay involved with the marketplace in hopes that my doing so will help provoke more conversation on the topics of outsourcing and finding projects online, as they are topics that closely concern myself and many other colleagues in the field.
Ah, gotcha.
I misinterpreted this statement:
“In a recent post, I made a comment or two about some quality projects I’ve found on oDesk.com.”
Anyway, some of the jobs make me laugh too – my favorites are always the buyers that want a “clone of ebay” for under $1,000. There are always going to be some crazy people out there. It’s our job (and our goal) to filter out those people and allow high quality buyers to find and work with high quality providers.
-Josh
Top sellers on those sites would charge at US/EU rates, and still get more work than they can handle. The common entry strategy for sellers on those sites is to bid as low as they can in order to get their work rated (pretty much like your trackback example). If they manage to get a good rating and a decent project history, they raise their rates.
Then, I work for a Russian company and we tried those sites a few years ago. Even though we did not compete on price, we landed a few small projects through RentACoder.com at $25-30/hour.
Finally, you may be able to get a much bigger deal on more favorable terms after you are done with the first “test” project. One of the RAC jobs I mentioned turned into multiple man-months direct engagement and the only client we signed up through Guru.com is still buying our services from time to time.
@T
Agreed, for people across the world living on under $2 USD a day, $100 per month would be a decent setup. So the workers overseas, and the companies (specifically the American and European ones) would make a killing paying such little money for labor.
Great deal for the companies, and the overseas workers. The ones who suffer for that deal is the American and European workers who would have been hired otherwise, but their rates are “too high”. I wouldn’t have a problem being paid $100 USD a month at all, if my bills were more like: Cable $1 per month, Electric $2 per month, food $3 per month 🙂 But the American companies collecting on my bills unfortunately don’t pass the savings on foreign labor on to me, but instead they line their pockets and make massive year-end bonuses for themselves. I would imagine it’s the same thing for a programmer in the UK who lost his job at a big company in the UK because they’re hiring overseas workers and still charging the ex-employee the same price for his cable tv every month.
@Dmitry
No doubt a worker in Russia or India, for example, is getting more work than they can handle from this outsourcing. I wouldn’t ever suggest to anyone to bid low for themselves because it only hurts them in the long run, but eventually I’m sure they do make some great money and are loaded with work.
For that worker, and for the hiring company, it’s a great deal. I can’t claim to be an expert on the exchange rates, so if a Chinese company hires a Chinese developer at what appears to be a silly rate to me ($5 for 500 cropped images in Photoshop) it may be a great deal? No idea. But if an American company hires a worker overseas for that rate, and then turns around and tries to sell an American a service at a typical American rate, that’s great for the overseas worker, great for the company, and the American citizen gets screwed. Our jobs go overseas so less work, but we’re still forced to pay the same prices for everything, in fact the prices constantly go up.
Many American companies moved their manufacturing to Mexico, or China, sent all those jobs over so they can have their products built cheaply. So Americans lose work, and the very same companies turn around and force us to pay the same old prices, there’s little or no savings passed onto us, but the big guys at these companies get astronomical year-end bonuses…nice!
They’re beginning to reap the rewards though, the Euro is ever so slightly worth more than the American dollar now, which is the first time in my life I remember seeing that 😉 Maybe in a few years I’ll be living on $2 Euros a day?
That being said, I have some images that need cropping, and I lay out a nice ham sandwich, I’ll even toss a shiny Euro to the first person to send me their resume…..hehehe.
Welcome to global economy, Dave. 🙂
In fact, the outsourcing trends have reversed to a considerable extent recently. Companies realized that on-site personnel having the same (business) culture is more cost-effective in many cases. So now the hottest buzzwords are “nearshoring” and “rural outsourcing”.
Also, Russia is in a difficult position – the costs of living are much higher than in India or China, so we cannot really compete on price. In fact, all the commodity goods and food are much cheaper in the US, even in SF Bay Area, than in my place. We are still behind in property and medical insurance costs, but we are catching up. 🙁
That said, what you and us have to do to protect our jobs is to master our scientific/business knowledge and engineering skills. I won’t care how much my customer would spend on image cropping if they paid me $100/hour for producing those images.
Dmitry,
Definitely agreed. I have seen many companies like Dell moving operations back to the US. The word “nearshoring” freaks me out still 😀 but hopefully more companies will realize that they need to put the money they save back into our economy by not sending most of their operations overseas and/or cutting down on costs.
If Dell gave me a kick butt XPS (and I mean kick butt) for $500 it wouldn’t be so bad.
Agreed also, we have to stay on top technology-wise, that’s why I became my own boss. A. I allow myself to sleep in the office, and B. it forced me to stay even more on top of cutting edge tech.
Medical bills are the #1 (or close to so I’ve read) reason for bankruptcy in the US and thats just sad. I’ve posted about my awesome hospital bill a while back that I’m still paying off, and probably will be until they just tack it onto my funeral expenses one day and make my family pay it.
If you hear of anyone hiring for image cropping at $100, definitely let me know! 🙂
Dave,
Think Canada for nearshoring. Don’t know what the CAD/USD rate trend though. 🙂
Just read that Euro has broken through $1.50 level. Uh oh.
I know people from the US and the EU used to go to Russia to undergo eye and dental surgery – it was much cheaper even if you add the cost of the trip. Not sure if it is still the case.
Wish you good health. 🙂
Ya, fantastic news 🙁 Euro is kicking USD’s rear, and I think the CAD has been worth more for a few months now. Very sad.
I’ve read many stories of people swinging over to other countries for medical treatment because it’s way cheaper which is really sad. That is why I offer the Dave Flatley Medical Plan (don’t get sick) for $0.00 per month for anyone. I really think it’ll end up taking off someday.
I thank you Dmitry, and I wish you good health too, and certainly there’s always the DF health plan should any of us ever need it 🙂
good article
RE the picutre cropping – I think, maybe, that you are forgettign this is the information age and many tasks can be automated. Don’t expect that because the price is cheap, it will be done by untrained people manually.
In about 15 mins to 1/2 and hour I could whip out a program that can crop images – and it could easily link to a list of crop sizes if their sizes changed. Assuming that this job goes to someone who can also whip out a program like this, then they have just made themselved $5 for 1/2 hour work. Assuming it takes another 1/2 an hour to process the images, that’s $5 for an hour’s work. That is well over double the average wage in many countries (calcualtes to an approximate wage of $90-100,000 US per year).
As oDesk gains in popularity an economy and equilibrium will form, so that unrealistic jobs won’t get accepted, and poor workers will be identified. But as it stands, I think the system is brilliant.
I definitely wouldn’t think that just because the hourly is cheap, that it’s untrained people. On the contrary, I would imagine it’s mostly highly trained developers/designers/etc, in a lot of cases, better trained than a lot of people in the States can afford. In many other countries, education is actually affordable.
Considering the value of the USD now though, this post is kind of dated anyway because a lot of other countries currency caught up thanks to the powers that be. So maybe one day, someone in Europe will hire me for a $5 EURO per hour Flex gig and I’ll be a happy man 🙂
Dave,
Good try to analyse the market place.
I guess you know nothing about oDesk. Please dont try to compare oDesk with the scrap like guru, gofreelance, ifreelance.., etc.
Some points i want to let u know.
1. On oDesk, we have hourly rate between 1 USD to 30 USD.
2. oDesk charges very little amount from the provider and the buyer AFTER the assignment is completed(Buyer is safe here) and AFTER the provider gets funds from the buyer(Provider is safe here), which is not happening in any of the websites listed by you.
3. oDesk GUARANTEES money to the provider in case of hourly assignments. This is the biggest factor to be considered in current situation of FRAUDS and SCAMS.
4. oDesk has WELL MANAGED and WELL ORGANIZED structure which is not found in any of the sites given by you.
5. You ignored the fact that 1 USD is equal to 48 Indian Rupees and 47.5 Philippines Pesos.
oDesk is UNCAMPARABLE place where the buyers as well as the providers are HAPPY.
You can discuss this with me any time on nnasika@gmail.com.
Thanks,
NNasika,
Successfull oDesk Provider
Hey NNasika,
Sounds happy to me. But I should probably update this post; my issue wasn’t 1 USD = 600,000 something-or-others, it was American jobs going over seas, where the money would be great for an overseas worker, but American’s get screwed when our jobs are disappearing. Hence the current market. And I guess with the USD dwindling, it won’t matter sooner or later.
For the record, I should say oDesk = oDesk, and American companies that farm jobs overseas for some pathetic amount of money in the guise that “hey, this is a lot of money for someone in the Ukraine, but I’m not lowering the price of my product accordingly when I want Americans to buy it” aren’t thinking too hard.
That’s less jobs for Americans, less money, and who the hell is going to go out and buy anything? That just makes for a sucko economy. Unless I can grab a job for $10 per hour building killer RIA’s, and then go pay $10 to fill my gas tank, then I won’t complain 🙂 But oDesk isn’t responsible for those companies’ projects, and overseas workers aren’t at fault for talking jobs. IF you’re American and you can afford to work for the lower paying projects……awesome, I’d like to talk about how you plan your budget 🙂
Back again. Just one rather long point about a misconception.
“American jobs going over seas” – or as Southpark says it: “theeeir taking oooor jooooobs”. On the face of it, it sounds exactly like what is happening but it doesn’t work out that way. Increased outsourcing has, todate, generated greater produtivity, creating a larger economy and more jobs. This is a macro-economic argument that actually has stood up to the rigorous test of time.
If an American company can pay Person1 $30/h to do a job, or Person2 to do the same job at $5/h, then on the face of it is sounds like $5/h goes overseas, and that America looses out on a $30 job. But from the company’s perspective they are paying an American $25 an hour extra to do something just because they are American. From a company’s perspective, they are loosing $25 for no good reason.
Let’s say this is a large organisation and they decide to ourdsource 1,000 Admin positions at this $5/hour. That’s a savings of $25,000/hour – or $52,000,000 per year. Also assume that the company is producing the same products at the same quality when they do this.
To a business a savings is as good as a profit. So the company has actually made $52,000,000 more. That’s $52,000,000 more that can be taxed, $52,000,000 more that is available for investment, and $52,000,000 more that goes to the owners of the company (share holders). Alternatively, that’s $52,000,000 LESS they can charge for products to other Americans, effectively saving Americans money.
Because of a reduced cost while producing the same product the company is more profitable, and has the ability to reduce prices to increase market share, or maintain the same proce but take the reduced cost as profit to the share holders.
Either way, if a company can do the same tasks for a cheaper price, the company is more profitable. That’s increased productivity and improved efficiency. America benefits by the company outsourcing to a cheaper worker. Increased profits of companies means increased economy, means increased number of jobs.
But that doesn’t make sense, sending American jobs overseas makes more American jobs, right? Look at the major manufactures such as Nike. They oursource almost all production overseas and yet by independant evaluation they are able to employ more Americans because of it!!! Sure – there are few textile manufacturers left anywhere in America, but there are lots more sales, marketing and executive jobs, all with employees who are much happier than factory workers. And that’s not to mention the fact that American cloaths are VERY cheap. 100 years ago, even with industrialisation, clothes were so expensive that most families made their own clothes. Due to outsourcing American families save money and time, money and time they can invest in other things (such as themselves).
So by outsourcing jobs that can be outsourced there are going to be more American jobs. Maybe less jobs in some areas, such as data entry, and other basic areas, but overall more jobs.
It isn’t all peaches, and there are down sides to globalisation, but in the end outsourcing, and oDesk, is a good thing for America, and a good thing for the world.
FYI – I am Australian
Hey Philip,
I have to respectfully disagree with most of what you said. As an actual American business owner, as well as citizen who actually does need lots of good ole USD to afford an actual material existence.
You said: “But from the company’s perspective they are paying an American $25 an hour extra to do something just because they are American. From a company’s perspective, they are loosing $25 for no good reason.”
It’s not just because we’re American, it’s because we need a certain USD amount just to maintain a decent life. $30 USD comes to about 62k per year. If you’re a single 20 something renting an apartment (depending on where you live also) you can maintain a decent life.
If you’re married with kids, now you’re in trouble unless you happen to be renting a tiny apartment and not above eating the occasional pet for holidays. Now having lived in NYC, I can say that 62k per year when you’re raising kids isn’t going to cut it. Option A, move to a cheaper spot, there are plenty of spots in the US where you can live on 62k with kids, although I hope you don’t plan to send them to Yale, unless they get scholarships. Education and health care cost big money here.
So it’s not that a company is paying more just because someone’s American, they also happen to be setting the prices of food, electric, housing markets, so on and so on, and supply and demand dictate what one needs to survive, how much one needs to drive a porsche vs a honda civic etc.
Your said: “Alternatively, that’s $52,000,000 LESS they can charge for products to other Americans, effectively saving Americans money.”
Not effectively, but rather, in theory. Doesn’t work though, because that never ending human flaw we call greed 🙂 The great majority of companies save a bundle, and the ones who don’t squash their own investors actual do make them money, but they most certainly don’t pass the savings onto the average Joe. My Nikes cost about $60 10 yrs ago, and they cost the same right now. I did, however, get laid off more than once, but still paid the same for sneakers.
You said: “From a company’s perspective, they are loosing $25 for no good reason.”
I agree….lots of big companies don’t think their employees are a good reason.
You said: “America benefits by the company outsourcing to a cheaper worker. Increased profits of companies means increased economy, means increased number of jobs.”
Agreed, increased economy for elsewhere but most of America (average Joe who just lost his job), profits yes, number of increased job positions, yes……to send back overseas 🙂
You said: “That’s $52,000,000 more that can be taxed, $52,000,000 more that is available for investment, and $52,000,000 more that goes to the owners of the company (share holders).”
To this, I’ll say, agreed, agreed, and agreed, but the first part is conditional. “Could” be taxed, but aren’t. Just ask Microsoft 🙂 they know good accountants.
As a company owner myself, when I look to hire someone for a job, I know I could farm it out overseas and make quite a profit. But I don’t. If I were to hire an American, I know I can’t pay them $5 for a programming job, that’s ridiculous, how would they pay for anything? At that rate they could afford 2.5 soft drinks from a vending machine per hour. But I wouldn’t be able to sleep with myself at night knowing I screwed someone.
If I did farm it out overseas, no problemo with that. The only problem is, when everyone does it and there’s no equalibrium, our economy goes….oh wait, our economy IS in the pooper right now 🙂 but Exxon is doing great, so are the shareholders….so far.
With that said, in 2009 I’ll be looking to hire Adobe Flex and Java devs, and I’ll make sure to pay extremely well or I won’t hire at all if I can’t afford it. To me it’s as simple as the golden rule 😉
I have been on oDesk as a Services Provider, for the past month or so, and I have already made a small sum of money, without using any money or credit card. Before this, I spent close to $50 on elance.com for membership fees and buying connects. I have spent $50 on guru.com for an yearly membership and no return on investment. As the broadband speeds pick around the world, including 3G and WiMax. It would become easy to encash skills.
@T
What you are missing is that people who participate in the global marketplace don’t live on $2 a day or $60 a month.
The part of the globe that lives on $2/day lives in slums with no internet, computer, electricity, place to live or ability to read.
In terms of raw human productivity and the rate of resource extraction, it is simply impossible to earn $60/month and have access to Internet and compete on oDesk. ( Who made me an expert? 🙂
@Phillip
What you are describing is contributing to a major erosion of out middle class. Companies that have money and ability to take advantage of the global workforce arbitrage get enriched while middle class gets left behind, and then the companies share the profits with other rich people who are their shareholders. So outsourcing is contributing to a polarization of our society. Have you tried living in U.S. on middle class salary recently?
The other negative aspect is that companies instead of investing into time-saving technology and improve our overall productivity as a society choose to use cheap labor in India. The benefit of course is we are lifting entire countries out of poverty ( that’s if they start charging more than $100 for cropping 10,000 images )
The wages in India, China, and Russia are rising 50% a year. Shanghai where a senior developer is making $3000/year is no longer an outsourcing spot.
Dimitri
I agree with Dimitri, that’s the major issue. The companies themselves aren’t trickling anything down to the middle class, even though the middle class makes up the bulk of American workers. They’re the ones getting stiffed, while the companies are turning big profits and basically keeping them for themselves.
Just wait until PXL gets bigger 🙂 and I’ll be hiring workers for ridiculous salaries to set an example of what an American company should be doing for the middle class.
I know of many oDesk providers from the min.wage $8/hr countries who are earning well on oDesk. And why not. Use each free hours you have, which you feel are being wasted anyway, constructively.
Stop researching on what is wrong on oDesk and utilise it in the best way, buddy.
Best of luck.
True, it makes good material for blog posts anyway 🙂
I have hired some programmers on Odesk to work for me, however after some time I verified that I paid too much on Odesk comparing with some other marketplaces. I have used GetACoder.com and I have found very good and professional providers who charge lower than in Odesk. GAC service is good and their support very nice.
I asked for a developer on one of these sites and was completely overwhelmed with thousands of responses (mostly from India). They all say they can do anything, but it’s impossible to tell. I came upon your blog quite by accident, but maybe that’s serendipitous.
I have a beautiful website that has problems. I’ve been told I need to find a backend programmer in php/mysql/cms with flash applications.
I used a company that hires out freelancers. But none were knowledgeable enough to fix our problem. We paid a lot for very low level talent who actually made the problem worse.
Would you be interested in taking on my project or helping me find the right person who could?
@Dave
I can understand a lot of your reasoning, and in some respects I agree and in others I disagree. You mention a couple of “intuitive” arguments that don’t actually play out. I’ll try not to go into another long message explaining things – but instead I’ll try and break it down to the core arguments.
Argument 1:
Money isn’t going overseas.
There is a focus on paying overseas developers $5 an hour (which is more like $15 now days). But what VALUE are they adding to your software asset? $15 per hour? $50 per hour? If you are willing to get an American to do it for $30 an hour, then let’s assume that the task increases your software asset’s value by $40 an hour (if the task didn’t increase the value of your software asset you wouldn’t get the task done!). So by outsourcing at $5 per hour, you are increasing American software by a net $35 an hour (Value – Cost) in AMERICA’S FAVOUR!!! That is – $5 went overseas but $40 in value came back. In this trade America was the Net beneficiary. If you got an American to do the same thing, $0 came into America. As far as the company is concerned, if they hire an American just for the “feel good” factor or misconceptions that they are doing the right thing, they are reducing their profits AND stopping the intelectual investment INTO America.
Argument 2:
Why pay more to get the same thing?
If the US programmers are inefficient compared to the world market then you are payment more money to get less.
Let’s say that you have the option of buying widgets from China for $5 per 100 or American for $50 per 100. If you buy the American one, then you are effectively paying $45 per 100 subsity for inefficent processes.
The “idea” of trade is that different places are good at different things. For instance, let’s assume that that growing apples in Florida is expensive, and growing oranges in NY State is expensive. Let’s also assume that NY State can grow apples cheaply (I don’t know if this is true), and Florida can grow oranges very cheaply.
Why grow oranges in NY state when the cost is going to be so much higher than growing the same oranges in Florida? Also – you would get more oranges per land area growing them in Florida than NY state. Same is true for apples – only the other way around. So instead of each state trying to grow all their own food, they rationalise and the state that grows oranges best does almost just that. The state that grows apples best does almost just that. The benefit is that, in the end, more oranges and more apples are produced at a cheaper rate than if each state produced what they weren’t good at producing. If NY State said “No – our Orange growers will go out of business if we don’t subsidise them.” or “We are going to loose all of our Orange money to Florida” then they would spend extra money subsidising an industry that is less productive than other states AND they will produce less apples than they would have otherwise, putting them at further disadvantage. They are spending money AND loosing money at the same time. Instead, NY State can grow more apples, sell them to Florida and buy more oranges than they could have grown themselves. Similarly, Florida can grow more oranges, sell them to NY State and buy more apples than they could have grown themselves. If history has taught us anything it’s that when people, states and countries trade everyone is better off.
That’s the theory behind trade, and behind globalisation. That is, if you stop subsidising things you can’t otherwise compete in, and instead put the money into things you can compete in, everyone is better off. Otherwise you are literally paying people, companies and business because they are inefficient.
By hiring someone locally that COULD be hired overseas at a cheaper rate, you are paying more than you should, and what’s more Americans aren’t doing what they are better at than the overseas countries. That is, America does many things much better than anywhere else in the world. Their focus should be on doing more of that, and they can focus on doing more of that by doing less of the stuff that other countries are better at. Not only will America be better off, but so will the world.
BUT BUT BUT…..
Programming isn’t the same as growing fruit. Having someone in your office that you can bounce ideas off isn’t the same as skype with broken English. There are many areas of software development that simply don’t work very well when outsourced. There are many areas that are only successful in team environments. So although the hourly rate may look cheaper, the cost might actually be higher.
Using the orange/apple example – what happens if transport costs go up thousands of percent? Then the equation changes and it becomes competitive for NY State to grow their own oranges again.
Using software development, I have heard of many cases of outsourced projects that needed to be started from scratch with a local team.
So I am NOT advocating wholesale outsource of software development, but rather outsourcing of the “drudge work”. The stuff that is akin to data entry. You wouldn’t get your Software Developers to spend a couple of hours a day cleaning the floors and kitchen, you outsource that to cleaners. Similarly you wouldn’t get your greatest resources to do simple but time consuimg tasks.
The argument is that these tasks can be outsoruced to other countries, and both those countries AND your country are better off.
Finally:
You might feel that “greedy” companies are going to outsource jobs and lay off Americans and keep all of these profits for themselves. You might feel that globalisation is making super corporations that pay no respect or due to middle/lower class people. You may also feel that companyes will put their money into outsourcing instead of trying to improve local efficiency to improve productivity. You might also think that America might gain from all this labour trade, but the gains aren’t distributed equally, so the rich will get richer while the poor will get poorer.
Well…. I’m not arguing that that won’t happen, but that is a political issue. America as a country is better off when oursourcing, but it is up to America as a country how it governs that wealth. Maybe limit personal wealth (e.g. the British have a Death Tax to ensure that no family propogates wealth through inheretance alone). Maybe limit corporation size (cororations are becoming too large and too powerful). Maybe market forces will mean new – more productive companies will start up locally.
So many of your concerns are valid – but they don’t stop the basic logic being true.
I hope that makes my statements a bit clearer.
@Phillip
I have to say, basically this economic crisis we’re going through now should be solid enough proof that outsourcing doesn’t currently work well for Americans. By Americans, I should be very specific. I mean regular plain ole workers. If you don’t own a company or are not a share holder in a company. The Middle Class.
Argument 1. Money actually is going both overseas and into wealthy people’s pockets. My tax dollars just bailed a lot of them out because they’re efforts of outsourcing and keeping the savings for themselves, getting more and more greedy clearly don’t work. Else my tax money might be doing something more beneficial 🙂 than saving their failing companies. My company is currently doing great, but I’m not a huge conglomerate corporate slob. I’m a middle class, small business, and I’m an American programmer.
I wouldn’t exactly say American’s are no good at programming…I like to think I’ve done my fair share of quality work 🙂 but certainly many languages are invented, perfected, and standardized here in America, and I can safely say I know many American programmers who would be tough to compete with.
The old adage is, you get what you pay for…and it still stands today. Outsource manufacturing to China, and look at the lead-laden toys we get to buy ( at the same rates as American-made, and lead free as the old days ) our kids for Xmas.
I can name a bunch of projects that were farmed out overseas, only to be broken down and completely recreated later by a local American team. In fact, some people have commented on my other blog asking if I’d take over their projects that were on fire.
The Big 3 (Chrysler, GM and Ford) just recently went and asked our Congress for a bailout. They closed plants, shipped production overseas, laid people off, and cut the quality of their cars for years. But most of their cars go UP in price, not down. So who gets the savings? Our middle class? Nope…the American workers that are buying their cars still have to pay anywhere from 500-1000 bucks (roughly) for a modest rent/mortgage. How could they work for $5 per hour?
If some jungle island in the mid-pacific uses frog nipples as it’s currency, and 5 frog nipples could buy you a nice mud hut, how does that affect me? Maybe I can buy 5 frog nipples for $5, but I can’t turn around and offer my landlord frog nipples as this month’s rent. He’ll punch my own nipples off. If an inhabitant of that island comes to NYC with 500 frog nipples, he could potentially trade them for $500, but that’s not going to buy him a home to live in for his family for the rest of his life. But, I could move to the island and buy half of it with my $500 if I were to buy a load of frog nipples.
Currency is only accurate for a domain. In this domain, America, we have our own currency, just like each other domain in the rest of the world. They don’t match, they never did. By trying to play the game of leveling the playing field, by having an American company NOT hire Americans at $30 per hour to write a program, but rather hire a bunch of people overseas at half that rate, there’s a big savings for THAT COMPANY, not America as a whole. Not for the shmoes who no longer have jobs.
When the company produces their software, 99% of the time they’re going to keep the price exactly the same and pass the savings on to themselves…not even their shareholders necessarily. Many shareholders who got screwed can attest to that. If I’m a middle class guy, and I need that software, but have no job because so many of them are going overseas, how am I going to afford it? That’s EXACTLY what’s going on right now. Job cuts here in the US are the highest since 1945….hmmmm I wonder if all the manufacturing went to China and Mexico, the programming to India and Russia, and I wonder if the Big 3 just got some bailout money, yet stopped production of their cars. That means people ( many of whom I know personally ) are out of work and won’t be buying cars or much else anytime soon, and the economy slows down.
On a large scale, just take a look at the world right now. The economy isn’t doing so great and it’s that thinking that brought it down. Globalization doesn’t have to suck….there just needs to be checks and balances. If an American company doesn’t hire American workers to produce their product, then that company should be taxed at a higher rate. Funnel the money saved back into America forcibly, else the fat cats aren’t going to play nice and share.
Argument 2: Only makes sense since both NY state and Florida are under one domain, America. If you have a company that sells oranges, and hire some overseas workers to produce them, yet turn around and sell the oranges to Americans for the same exact price….who benefits? The company sure does, the shareholders possibly, the overseas workers no doubt. Who’s the backbone of America? The middle class workers, same as any country.
Ultimately, America no longer produces much of anything, we’re a service country. And now the big companies are farming more and more service jobs overseas…while they lay off more Americans, hence the 7.2% unemployment rate and 2.6 million jobs lost in 2008 here in the States.
I’d have to say that all evidence points to not making America, or the world, better off. Well at least not for us small guys, the big CEOs still get their 11m dollar bonuses, regardless of whether they run their corporations into the ground or not.
You’re absolutely right when you say it’s a political issues. Outsourcing in itself might not be a bad thing if there were the proper checks and balances. After years of abusing and taking advantage of outsourcing, these big companies all get my tax money with no say from me……doesn’t work!! If the gov said that if you’re going to hire overseas workers for a fraction of cost, make all that savings, and still turn around and offer your products for the same price, or less than some tiny savings to the American people, then we’re going to hit you with a “greedy bastard” tax so we can build some bridges and roads and not sell them to China 🙂
You know what – I think we are on the same page here.
In theory trade and outsourcing works. And in practice (at a macro level), each country/company is better off, but are the people? Americans are out of work and many Asian countries have workers in appalling conditions (which is quite often WHY things are cheaper from these countries).
CEOs get millions of dollars because… well because that’s the “market rate”. Factory workers in Asia get a pittance because… well because that’s the “market rate”.
I’m against sourcing locally just for the false assumption that it is automatically better for the country as much as I am against outsourcing without governance. That is – there should be a level playing field – same worker standards and rights and same benefits. i.e. “under one domain”
I REALLY like the idea that a cap be placed on any executive’s pay at ??50?? times the lowest paid worker or contractor. Okay – that figure might be moved up or down… but you get the idea. If the execs want a pay increase, they have to increase the pay to the plebs – and it would be better if their plebs were very well paid.
I also like the idea that companies should be taxed at personal tax rates. Companies are legal entities and can act in a court against a person as if company was a person – so why don’t they get taxed like a person??? If I tried to take too much money out of the country, or into the country – I get taxed. Why not a company???
Anyway – interesting topic and you have some great insights.
@Philip
To this, I agree with much more. In theory, there’s nothing wrong with outsourcing, it’s the big corps who take advantage of things that makes it not work. The greater majority of any country is the middle class, so it can work great for the companies and CEOs who line their pockets with the savings in production cost. But for the majority of the country, the workers and customers who buy the products get the shaft basically.
If the tax laws said ok, you can outsource but we’re going to level the playing field if you do, then I think it would work better and could be beneficial in the end. If your company hires overseas workers, perhaps you pay a different tax on them to balance out your savings. Sending a job overseas, and most likely keeping your price for your products exactly the same is only going to hurt the country. So if you’re not making up for it by lowering your prices, have a nice outsourcing tax 🙂 It’s your patriotic duty!
A salary cap sounds nice, but that wouldn’t fly here. I’m not against CEOs getting rich if they want. And morally, they shouldn’t screw local and overseas workers, taxes, and their country, but I wouldn’t force them to have a cap. If I go out and buy a rare exotic sports car and have it imported, I’m going to pay a luxury tax. It’s above and beyond what most people have, and I’d obviously have the dough to buy it in the first place, so I shouldn’t complain about that tax. Same idea for outsourcing. Can’t have your cake and eat it too. If you’re making a killing by saving all this money on overseas workers, but you’re not lowering your price for products significantly, then you get to pay a tax on your company above and beyond what you’d normally pay.
There’s just got to be something to level out that playing field. Too many companies went with the cutthroat methods, made a bundle, CEOs got rich, and now the economy crashes because the majority of people ( the workers they screwed ) can’t afford to buy their products because so many of them are out of work. So what do they do? Ask for a gov bailout. Who pays for it? Workers do lol That’s quite a nice racket!
Trickle down doesn’t work……should be trickle up! Also, rich folks don’t seem to understand, you can only use and suppress workers for so long, and then they’re going to get sick of seeing the rich have their cake and eat it too. They’ll rise up eventually and then the rich realize they’re far outnumbered. It’s much better to follow the golden rule 🙂 Greed is the only thing wrong with the world ultimately……self. You can’t live in a country and only think of yourself and what’s good for you. That’s the lesson the CEOs need to learn.
This year, when I hire some developers for freelance programming and graphics, I won’t be looking to screw anyone. I’d pay market rate or better when the time comes. If that developer is American, he/she’s going to use that money to pump back into the economy. If they’re living well, they’ll spend well and it’ll flow nicely…..trickle up. You only get to keep what you give away 😉 Someone needs to teach the CEOs that.
So ultimately I agree with what you’re saying, in theory it works, but in practice it’s been done all wrong.
And ultimately I agree with what you are saying. BUT – getting back to the topic “What is oDesk all about exactly?” – have you checked it out lately?
Lately the major growth has been from the USA and Canada. Provider growth has outstripped any other country many fold over. People have realised many of the arguments put forward and are voting with the people they select.
So “outsourcing” doesn’t have to be international outsourcing. In fact, USA is competitive with a lot of other countries – especially for quality work. So if you have odds and sods to do (i.e. you don’t need a full time employee), I’m still going to use oDesk for this.
http://www.odesk.com/community/oconomy/country_statistics
You can ignore the massive drop at the end of the year – nobody works during Chrissy.
It’s not really ODesks fault who lists jobs for how much money. I was originally just chuckling at the companies who were listing jobs at horrific prices ( for an American ), but all the jobs boards have postings with low prices like that.
It’s the companies who are taking advantage of outsourcing. That’s why I never bother replying to any of the freelance project boards. I mostly get my work through word of mouth and previous clients.
I do want to do an experiment this year though if I can. I want to list either graphic design work and/or Flex work for the most ridiculous amount of money that I can 🙂 ha! Why? Because of the golden rule. Why would I want to screw people as a company, when I should be taking better care of people if I’m in a better position to do so especially. PXL Designs is very tiny for now, but when it grows, people will like working for my company. I know from past experience, companies who took care of me got much better work out of me and much more of a connection between us, more loyalty. It’s very basic really, take care of people and mean it, and more often than not, they’ll take care of you too. But use them and take advantage of them, and they won’t give a damn about your company or their part in it. It’s like anything else.
Now let’s all smoke a big peace pipe, and sing folk songs by the camp fire ~ Ha! Clarence, from It’s a Wonderful Life, said “No man’s poor who has friends”. Same insight.
Sounds like a great plan. This is now spinning off into a whole new and interesting realm – so sorry for the constant posts. But I agree. Google is the number 1 employer in USA. Why? Because it treats people like you explained. I guess they just don’t want to be evil.
this is crazy! they are offering cheap pay for an expensive job. some people from other countries will take $2/hr any job they find. there currency value is lower than dollar so they get big bucks even if it’s $2/hr or per project. they’ll take it.
Yup, the idea behind it is this: Lower all Flex developer salaries to $2 per hour, anywhere in the world and……..hmmMMmm?? We’ll all be equal, right?
Sounds like a great bargain, where do I sign up? I’ll just go and ask the bank if I can start paying $10 per month for my mortgage, I’m sure they won’t mind 🙂
I guess I’m a little tardy to the party here.
I wanted to address one thing about the idea of the outsourcing taxes between Dave and Phillip the key behind that is you are both thinking optimistically about it. What it boils down to is who is getting the money, throughout the dialogue here; the bread winner has been undoubtedly the company and sometimes shareholders.
The problem currently, is the companies/shareholders receiving the money are being irresponsible with it.
By adding a tax in an attempt to level the playing field we are only hurting everyone in the situation; the company (who now pays a tax) the consumer (who the tax will undoubtedly be passed on to, as they are now) and the worker who when the work is outsourced is already out of a job. Who benefits in the situation of a tax; the government.
In that situation the money goes to the next echelon up, not in the direction we are hoping to send it.
Most of the conversations and points made here are completely “in the box” models (out of convenience I’m sure) and I’ll admit I don’t have all the answers (otherwise I’d happily be sitting on top of my own empire).
I think this all started within the last decade and it has spiraled uncontrollably into the state it is in now out of necessity. My theory (key word there) is that one (or a few) businesses caught on to the idea to outsource the labor and as is usually the case their company made bank due to the savings on labor costs alone.
Like a pebble in a pond the effects trickled out and other businesses caught wind of the model, but like a natural resource that was being exploited too many people started to suckle on the teat of outsourced work.
Having more and more businesses jumping on the band wagon in turn forced more businesses to do the same out of need. Simply, they could no longer afford the goods and services required to sustain the business (going back to Dave’s early references on the price of electricity, gas, food, internet, the cost of education to get the person that knowledge, etc..) and still make a profit.
Without balance, the model started to collapse and is continuing to because American businesses can’t afford to pay for local labor.
The truth of the matter is it’s never as simple as anyone could outline, it’s not just math and numbers, it’s not a physics problem; otherwise someone would have solved it (or at least looked in the back of the book for the answer).
All in all some really great points, and a good discussion; worth the read.
Hey Christopher,
Thanks! I mostly agree with what you said. I think the major problem though is greed. The big companies are actually taking advantage of overseas workers, American workers, and as is the case now in even there own shareholders. It’s a few at the top that kind of hijacked the whole system.
If we tax them more, I could totally see the gov just dumping more bailouts on them at this point. The whole problem is, how to regulate greed? Throughout history, there hasn’t been an effective way save one. The little folks get tired of being stepped on, so they go and sharpen up their pitchforks 🙂
Hi. Actually I agree with a lot of what Christopher has said too.
One point though – throughout history there has only been one sure-fire way to end “social Darwinism” (where the rich get richer and the poor get poorer), remove inheritance – or tax it heavily. It sounds counter-intuitive, but the benefits are clear:
1) housing becomes much cheaper for everyone because it isn’t “automatically” passed on to the next generation.
2) all people are taxed less during their life because so much money comes in from the dieing.
3) There is little incentive to earn more than one can spend in a lifetime.
The difficulties are also clear, with people finding loopholes left right and centre. Giving assets to children before they die, loss of family heritage. England has done a reasonable job with handling this though.
Any form of tax is a disincentive. Taxing people while they work (even the top end of town) is counter intuitive – why would you want to impede people from working harder? Taxing what people buy something (Value Added Tax/VAT) is a disincentive to commerce. People can’t avoid dieing and therefore there’s no disincentive – so it’s not a bad thing to tax….
But on the balance of things – I don’t like the idea of a death tax, but if you want to stop the rich getting richer, this is what you do.
But when you have these CEOs collecting hundreds of times of their lowest paid workers, that’s just not right. They wouldn’t be rich if not for their workers. And in my experience, the guys at the top are the ones with nice houses, nice cars, nice vacations, they do little work compared to the guy in the mailroom earning $6 per hour trying to support his family.
Pitchforks Philip. Invest in pitchforks 🙂 What was the old saying? If not for religion, the poor would have eaten the rich long ago.
@Dave about the pitchforks: Isn’t it coincidental that there is such an uprising now about the right to bear arms in the US and the fight to own handguns/rifles without ludicrous laws/registrations/invasion of privacy?
A little prophetic don’t you think? Wonder if the government smells the milk going bad.
Along with that the anti-bullying/free speech campaigns that are popping up; a restriction of what people can say albeit they use the idea of “children being bullied” and fair time for everyone to have a voice (a wolf in sheep’s clothing)?
Things start out like this, with *seemingly* good intentions; (I’ll get a little off topic here, but I promise to come back) although I personally don’t think that childhood bullying is that big of a deal. Find any country in the world and a social group that doesn’t have some form of bullying (I’ll one up you even; look in any animal species). It’s a form of asserting dominance, Darwinism if you will.
Now I’m not saying it’s right; we as humans *think* that we are so far above animals, but basic instincts always find a way of getting back in there. My argument is that believe it or not it’s a part of growing up. I find it as ridiculous as someone trying to pass a “let’s end scraped knees” campaign.
*************End tangent rant
Back to the discussion;
@Philip: You said once before I believe that you were from the UK, correct? So I’m curious why you back the ideals of no inheritance, being taxed and not passing on wealth while living in a system that has a royal family? Isn’t that hypocrisy at it’s finest?
Additionally in that model; things become more stagnant in the working class and much more beneficial for the government who gets to recycle all of the wealth on the way out. Anyone wealthy that dies, instead of it going to their family, the government gets a chunk solely because of a death? What a kick to the gut when you’ve just lost a loved one. Although technically it happens like that in the US already; if a person doesn’t have a trust or doesn’t bother to write/define a will in their lifetime and passes all of their assets have to go through arbitration long before the family sees any sort of disbursement. So the government dips in to get theirs first.
That also seems to only work with situations where the death is unexpected; what happens when the person dying passes all of the assets BEFORE their death? i.e. signs over a fortune/gifts it to a family member/friend?
Think below the upper-level class to someone who merely owns their own home and has a reasonable comfortable retirement; was purely working class in their lifetime. If that family is working hard to get future generations a little bit “higher on the social totem pole” shouldn’t that be honored? I mean; isn’t it that families right to decide and not the governments?
I’ll give you an analogy (I love analogies); say you’re a kid and your parents are leaving you alone with a sitter. Now you’re parents have told you that they left you a slice of cake in the fridge for after supper and it’s all yours, but as soon as they leave the sitter goes in and eats all/some of the cake and then decides what you get to have. What it comes down to is authority and the abuse of it.
In this scenario; your parents made you something that they worked to create, paid for, taxed for the ingredients, for their income during the time that they worked to get the ingredients, paid/were taxed for the utilities, and endless other expenses/fees/taxation during the time of this item’s inception.
Why should it then, not be passed to you without the damn baby-sitter digging their greedy fingers into once they are no longer around to say anything?
Also, I don’t see how losing a families house makes it cheaper. In the US there is a trend for people to live at MUCH longer or move back in with their parents, or at least it seems that way (thankfully I’m not in that statistic).
“All people are taxed less because more money comes from dying” – when have you ever known taxes to lower? My experience is to fight every tax that comes your way because the money is already there and misspent. Not to mention the fact that once a tax is implemented it is almost NEVER rescinded, meaning future generations will be taxed more – not less.
I like to day dream back to the days of yore when (in my mind) they didn’t try and tax you for being a carbon based life form living on a carbon based planet expending carbon *WEIRD!* and instead you were taxed ONLY on your income and there was no chance of someone going back through seven years of records to make sure that you dotted your i’s wiped thoroughly, and ate enough fiber *exaggeration of course*.
I like the idea of of not earning more than one can spend in a lifetime; but I don’t think that cuts the mustard. There are already WAY too many people that don’t have enough incentive to work for more than they’ll spend in their lifetime and I don’t believe that those who decide to work for more than they could spend should be penalized for being motivated to do more.
To add to all of this, it’s still checks and balances and when the rich are the ones at the top; making the rules, laws, taxes, etc. how can you stop them from getting richer? Society breeds a class of privilege based on education and notoriety, the more people you know and the smarter you are generally the further you’ll go in life. With this model, the children of families that can provide a higher education and get them in the spotlight for a longer period of time to build up their name have the advantage.
To back up on what I’ve said though (@Philip), I agree with where your heart is; in theory it’s all good but the scope has to be extended to see who benefits.
What we need to do (get ready for a completely unreasonable idea that also only works in theory!) is go back to a trade and barter system; I’ll provide programming/design to a grocery store in exchange for goods/services that they have, same goes for clothing stores and so on. Then if I find someone that needs my services and I don’t require theirs, either I or the person I’m providing the service for can find someone that I do need service from who then in-turn needs service from my client and we all trade, no money involved = no tax.
Since I know that last part was a little crazy in text, see below:
Guy A needs service from Guy B and Guy B needs service from Guy A = fair trade.
B -> A -> B
Guy A needs service from Guy B, but Guy B needs service from Guy C, Guy C needs service from Guy A.
C -> A -> B -> C (imagine it cyclical and not linear although it works either way)
Who would have though oDesk would spark such an in-depth discussion?
I don’t want a gun, I like pitchforks and torches. They make better stage props. But I do think eating the AIG execs and passing bits of them around will accurately reflect nature. If a big fat cow kept eating until it laid out in the field and could no longer move, ants would eventually come and pick mini hamburgers out of it (I think I saw this on Discovery once) and disperse them to their little ant chums.
The way things are going, we might all end up on the barter system again, though I’m not sure who’s going to want an RIA so we can buy some clothes haha!
Ya death tax….not so much. I don’t think a death tax will solve anything, again I’m no expert. If enough of us drop dead, now maybe we’re getting somewhere. I’m sure AIG wouldn’t mind finding excuses not to pay beneficiaries our own tax money, and there’s be more of everything for whoever’s left.
I’m going to sharpen my pitchfork and make some torches just in case.
Hey ya I didn’t think of that, oDesk should pay for advertising on this one haha! Well, maybe not for this particular post…:)
@Christopher, you said:
“@Philip: You said once before I believe that you were from the UK, correct? So I’m curious why you back the ideals of no inheritance, being taxed and not passing on wealth while living in a system that has a royal family? Isn’t that hypocrisy at it’s finest?”
Actually I’m from Australia which doesn’t have death tax but does does still have the English Royal Family as our official head of state. The argument for no inheritance is purely an economic argument and does stand to economic reason. HOWEVER – I did say “But on the balance of things – I don’t like the idea of a death tax”
I don’t think I drove that home enough. I should have said that I hate the idea of a death tax – they get you when you’re alive and they get you when you’re dead. I actually agree with a lot of what you have said. I was merely pointing out that this is the only thing that has worked to stop the rich getting richer to this point in time.
Okay… not the ONLY successful way – the French sorted this out a long time ago by lopping the heads off their rich (at pitchfork maybe??).
In fact, my PREFERED idea is that no CEO can earn more than a specific multiple of the lowest paid worker or contractor. Say.. 6 times. A CEO’s job is more stressful and takes more education than the lowest worker – but not the millions that the CEOs get paid. Seriously, if you are going to pay a CEO 5 Million dollars, are they REALLY going to be doing a better job than a team of 25-50 highly paid executives? Just hire more people, don’t just hire one person for a lot of money.
So that’s the model I like, but again I can’t see it happening. Governments like to tax, they don’t like to impose regulations on commerce.
Thing is though, I don’t think anyone’s into regulating how much a CEO can make. If sports figures, actors, actresses can make zillions, why not CEOs? There’s only so much you can do to legislate morals, so I don’t think that’ll ever fly.
And actually, a TON of the biggest, richest CEOs out there are college and HS drop outs. Who says they need more education? I do think they all need some pitchforks though 🙂 Maybe instead of trying to limit their pay, just make a law that says if the workers below the CEOs get pissed enough, they can take a vote, and if all agree, they can legally pitchfork and eat the CEOs as retribution. That would keep them on their toes haha!
@Philip: Sorry about the misunderstanding.
I guess we all agree on pitchforks? Hah.
Again – I agree that it won’t EVER fly.
One thing close to what you are suggesting is just about to go through in Australia. At the moment if a CEO is being asked to leave (or just leaving) they normally get a big payout. The “Golden Watch” of yesteryear turned into a “Golden Handshake” and is now termed a “Golden Parachute”. The problem is that the boards make this decision and even if the shareholders object, they are objecting after the agreement has been made.
Instead any payment for bonus or termination must first be approved by the share holders. What’s surprising is that the large shareholder investment companies have come out in support, saying that they would object to some of the CEO payouts that have been happening lately.
Basically – put the power of veto of CEO payments into the hands of the owners of the company. Geez…. who would have thought that could work??? Friggin great idea, and MORE power should be given to the shareholders to approve all executive pay above and beyond specific amounts of money!!!
So the shareholders are sharpening their pitchforks over here on the other side of the pacific.
Hey Dave,
You should give up all this dribble about Odesk and such, guit your day job, and become a writer….Pretty darn good read if I DO say so myself…..Kudos
Hey Mike,
Ya this one’s pretty old, and all oDesked out. I don’t have a day job though, I’m independently wealthy from the Google Ads just from this one oDesk post 😛 ha! I should just buy out oDesk and change the name to moDesk, and only take on well paying projects.
Hi! I was surfing and found your blog post… nice! I love your blog. 🙂 Cheers! Sandra. R.
Thank you Sandra 🙂 Glad you enjoyed!
I realize you’re all developers, but ODesk also caters to providers of administration and customer service.
Looking at trade issues country to country based on skill sets doesn’t make sense. For instance to say that India has better programmers or the Phillipines have better run call centres (at less cost) and therefore in a global economy they should get the bulk of that type of work.
In any given population you’re going to have the full spectrum of talents/education and capability. Outsourcing a slew of jobs based on a skill set (e.i data entry) will leave entire groups of Americans, who don’t have the ability or knowledge to train for something else without a means to earn a living.
Time to take into consideration the human factor.
@Linda
The post that never dies 😛 should make a sequel to this one.
From what I read, it sounds like you’re adhering to the old “Indian’s are better programmers than Americans” stereotype. That’s no different than saying Palestinians are all militant….are they? All of them?
It’s a biased thought process, plain and simple. Workers in India and the Phillipines are cheaper? No doubt, they’re cost of living is much lower than American’s, we’re still paying the ridiculous prices from companies who go and outsource our jobs overseas and pass along zero savings to regular citizens. They only make more profit for the owners of the companies.
Education in this country is ridiculously expensive. On top of that, most of the gurus I’ve worked with are mostly self taught and went to college for something completely different than programming anyway. I’d say this about my American colleagues, they certainly have more brass and go-getter attitude working against the odds to get and keep their programming jobs in this awesome market. A ton of them write the very same books that people in other countries use to learn programming too 😛 How’s that for education?!
I’m going to have to keep up with this topic in new posts because SO much has changed in America and globally since I wrote this. There’s only heaps more evidence now that non-regulated outsourcing overseas is murderous to Americans. The corporate masters are making more, and the American workers are making less…so soon, yup, we’ll be able to compete with foreign workers salary-wise, sadly.
Dear David,
This is a great site! Ur research into these so-called outsourcing online sites is absolutely crucial to helping naive, desperate, unemployed, employment seekers avoid getting scammed! I believe ur effort here started out as an effort to provide free help to unaware employment seekers; this is demonstrated by your comprehensive research into these web-sites and the fact that you even took the time to establish a web-site regarding the issue.
Furthermore, instead of just bitching, and closing the topic, you opened a discussion forum, moreove, welcomed debate – to me that is an honest effort.
And even though I don’t know you or have never met you in person, I trust your opinion and most all of your recommendations. Of course I’m not selling anything nor trying to make donations to your forum (too poor), but just thought I’d say “thank you” for your effort to help millions.
Take care and good luck,
Carlson
Carlson, that’s the nicest comment I’ve received on this blog 😀 Thank you very much!
I’ve been slacking off on writing because of workload, but I think it’s important to say it how it is. So you give me inspiration to get a move on and keep blogging 🙂
“I used a company that hires out freelancers. But none were knowledgeable enough to fix our problem. We paid a lot for very low level talent who actually made the problem worse.”
>I totally agree with this situation.I’ve had similair problem.When it comes to REAL WORK you have not other choice exept to hir providers from your own country.As they KNOW what YOU WANT.That’s the problem why somebody will not work “under $30/hour” and somebody who will work for”$5/hour”.
You get what you pay.Perhaps a little bit cheaper in US or western Europe,but everything offered lower than 60% of the ordinary price and pay rates in US/EU is a headache later.A big big headache.Remember that forever.
@EFC I don’t think anyone from any country is any smarter than anyone from any other country. That’s just not logical, and not how a programmer would think of things.
My Grandma used to say, you get what you pay for. I can only speak from my own experience, but I’d tell you I’ve had many projects that were rescues from outsourced before I came along.
Seems to me the Golden Rule is more than cheap talk 😛 you get what you pay for goes a LOT further than cheap farmer’s almanac quotes.
Do unto programmers as you would have Wachovia do unto you. Then you can’t go wrong.
My personal advice is this, if you’re thinking of percentages, you’re thinking wrong. Do you have enough? Are you really satisfied? Do you need more? Has the world slighted you? If so, go and kick life in the noobs! If you’re so inclined, but remember, you get what you give…without exception. There’s no try/catch for that one 🙂 I promise.
I’ve actually tried oDesk in the past and although it wasn’t a bad experience – I tend to like Elance better. I guess its just that they have SO MANY qualified professionals to choose and so many great projects that they are hard to beat. Plus, their site is much easier to navigate and they seem to have safeguards to protect both buyers and providers.oDesk on the other hand, seems more buyer focused and less provider friendly.
Can anyone tell me how to any fact is verified on any of these sites? I’ve been using oDesk frequently and my main concern now is that I have no proof that any fact from the providers is true, from their photo, education, skills, name, country, or even gender. and even the “Test” process is seriously flawed (I scored very high for Access and I’ve never used Access). Most of the tests can be cheated on by doing at the same time as a development/Google window is open.
At the moment I find I am having to put a lot of time into interviewing to make sure the skills are there, but that only shows they can do the job. I still can’t verify much about what the provider has entered.
Personally I see this as the single biggest issue buyers face.
That’s a rough one Phil. The tests and certifications can only get you so far. Personally, I find word of mouth and a colleague’s advice is worth far more for screening people. But whatever field you’re looking for, I’d start off with some quality screening tests at least.
There are ridiculously cheap employers out there, but there is also a world of talent ready to work.
BTW, $100 = 683 yuan, about a months pay for millions in China. Needless to say, they don’t enjoy our plush American lifestyle.
Sites like odesk are essential now for companies needing knowledge workers and services to remain competitive.
US programmers cannot compete on price. Just forget it, you’ll never be willing to suffer enough. You better be able to do more than the guy in Timbuktu and make your extra value clearly quantifiable, or else, Zàijiàn!
My suggestion, start making stuff people can use. Use your inherently unique value of actually understanding western users. E.g. lots of opportunity to make a decent living inventing mobile apps, widgets, etc. No able bodied coder has to starve.
Basically, US programmers are being economically abandoned by companies that can use offshore talent. You’ll have to re-invent yourselves as entrepreneurs.
@socean
Totally agree with a lot that you said. $100 may be a month’s pay for someone in China, and they may not enjoy our plush lifestyle (definitely not the ones in the sweatshops creating our Nike’s), but they’ve been building up savings accounts for the past few years now. Here in the States, 98% are treading water or out on our backsides, losing jobs, houses, health insurance, you name it.
I said before and I’ll say again, the companies (cough cough Microsoft cough cough) who dump American workers only to hire overseas workers, they’re just greedy bastards the way I see it. Here we are years later and this post is still very much alive, and hardly needs more evidence of corporate greed to back it up. All the large corps sold America down the river, they don’t care for anything but their bottom lines. The all mighty dollar triumphs overall.
How does MS hire 10 workers overseas for the same salary as they’d pay one worker in the States and then still maintain their prices as always? Where did that fantastic savings go? I’ll tell you where; same place it always goes. It lines Bill Gates’ pockets with yet more billions so he can decide (and afford) later in life to skip around the globe tossing mosquito nets around and occasionally marketing Windows 7, and feel good about himself.
The thing I’m happy with is I think people are finally starting to wake up and turn of the Wii’s long enough to realize they’re getting screwed over here. Yankees have worked ridiculously hard for decades and the greedy pigs at the top use us like plastic eating utensils only to be tossed away for cheaper ones somewhere down the road when we’re worn out, and yet their need to fill their gullets is ceaseless. Sooner or later the peasants get tired of it an inevitably they go and eat the rich, and a new society is born (think USA for example). Rich people don’t exist without heaps of poor below them.
Me personally? If I were to switch careers, I’d go into the pitchfork sharpening business. I foresee a big need for that service in the near future 😀
One thing to consider is “domain knowledge”. If you hire workers as part of your company you are building up a “tacit” and “explicit” knowledge – that is, knowledge that can be documented as well as knowledge about your organisation and their job that is very difficult to define, but is just as essential.
If this domain knowledge has no value, then every worker can be outsourced, including mangers and CEOs. Since that isn’t the case, then a lot of thought should be put into who holds domain knowledge, how and when it should be used and what value is put on it.
Outsourced and transient workers – by definition – can’t build and add domain knowledge to the organisation. Dropping one domestic worker for 10 outsourced workers might sound cheaper, but the loss in domain knowledge is likely to be fatal in the long run.
This happened in my country where a large telco cut costs by firing all their most expensive employees. At first they made a lot of money but after about 10 years their share price dropped dramatically because the most expensive employees were the ones that knew what they were doing (they had the most domain knowledge).
Yup, you call it like it is! I’m new to the freelancing industry and I was appalled at the amount of money these companies are paying for their workload.
Ha! I wouldn’t lie to ya, just check out the market now. This post is seriously old when I called it 😉
I’ve been doing the freelance gig for less than year & still my best client is one I see face to face about once a month. It makes me cry a little inside to see the applicant average to be $5 on oDesk. It seems anybody that can download Adobe trial software is a designer today or poor Yin Yin across the pond. Much the same like people who buy SLRs because they can afford them, then bam, Craig Listing as professional photographers. Shit’s rough. But even so, I agree with socean, we need to think more like entrepreneurs than simple labor force. We need to guide our clients along the process of designing or developing & show them the value.
If I said you had to read a five page brochure you don’t care for & told you it cost $10 to buy it. You’d hate me even more. But if I told you could get 5 drinks for $5 each with your best buds in the entire world, you’d think it an awesome bargain. Price is only important when we can’t see the value. I have a long way to go, but I try to stay in the student mentality even after having finished school. Has anyone done or seen a comprehensive chart comparing oDesk, Guru, eLance, &/or eZdia? Maybe I should start my homework.
You are spot on. These new freelance sites (I belong to 2) allow idiotic employers to take advantage of freelance workers. I have been watching this for years and have seen thousands of job postings and have looked at the employers who did them. Some of the rates are appalling. It is a new form of slavery that allows arrogant contractors in USA and Europe to pay contractors peanuts. At the same time it bypasses quality designers and workers who can’t compete for 5 dollars per hour. But the freelance companies sure profit and have Noooo problem with it. New form of slavery is all it is.
David, you are right, it is “slavery”, but you have to, at the same time, realize that wages offered to those 5 dollar contractors are even worse when coming from their compatriots.
Who is a slavedriver and who is an “enabler” in that case? Personally, I saw my offshore employers as enablers when I started, but know I see them as baggage (slavedrivers) now that I realize how much I can truly get paid… it’s just a matter of perspective. I share your opinion now, but did not back when I started (3 years of work wear a guy out).
In this global economy, some forms of employment will go the way of the dinosaur, just like with the industrial revolution or many other smaller examples of such huge shifts… they will either radically change or die out… the information revolution is as huge as industrial revolution… it’s a way of life that will persist as long as there are employers and employed…
For some, those people are slavedrivers, for others, they are just lesser slavedrivers… that is key to understanding the online job marketplace and why it is “thriving”.
I just want to say I was searching odesk for possible seo ( I may need some for my new site) then I found your post. I laughed out loud when you said you’d need your $5 now to read the rest of the guy’s post:) Very funny
@Lisa, I’m glad it made you laugh 🙂 comedy might end up a career switch for me with the economy the way it is now.
This post was immensely helpful when trying to sort out the really strange – and very unprofessional – posts from oDesk. I almost want to offer editing services to all of them in bulk, just so the ads don’t look like crap written by a 10 year old.
Anyway, back to the hunt for me…
Preachin’ to the choir Heidi lol This is a seriously old post, but look how things have turned out in our country now. So many people out of work and we’ll all be begging for cheap projects soon.