Elevating our workplace with a new minimum rate

[Humayun K]

Is minimum hourly rate working properly? Please check this job post where client hired somebody Feb 2015 and the rate is $2.00 per hour.

**edited for Community Guidelines**

How come client hired freelancer at that rate?

[Stephen B]

Your link will be removed soon by the mods. But I saw the job page, and the reason is that the client had already hired that freelancer beforte at that rate - there is a get-out clause based on that.

[Preston H]

Humayan, to the best of my knowledge, oDesk's minimum $3.00/hour program really is working exactly as they said it would, which includes a provision that contractors who had already worked for a client at less than that rate or who were in the process of being hired at less than that rate were "grandfathered" in and allowed to continue at sub-three dollar rates.

But on a broader level of thinking, why are you so concerned about seeing one contractor with a contract to work for less than $3.00 per hour? I hope you have your sights set higher than that.

I actually sometimes spend time using oDesk's search tools to search for the HIGHEST-paid contractors in my job category, and I am a little annoyed at myself that I am not yet the highest paid oDesk contractor in my category. I do not understand the motivation behind some forum posts I see which seem to express envy for those contractors who are allowed to work for less money per hour than them.

[Darrin O]

Come now, Preston, you should be smart enough to see that all you have to do is jack your rate to $1K/hour and you'll instantly become the tops in your class.  What's that?  You're worried that clients would probably switch to someone who charges a much lower rate?

"why are you so concerned about seeing one contractor with a contract to work for less"

Why indeed . . .

[Preston H]

LOL.

Darrin,

Obviously my goal is to be highest PAID contractor in my category, not to have the highest posted hourly rate.

But thanks for the suggestion.

-Preston

[Darrin O]

"Obviously my goal is to be highest PAID contractor in my category"

Well, yes, obviously.  And that's all other people are looking to do, too. I'm just asking you to see the the parallels of market forces that occur in all economic segments.

[Preston H]

re: "If you didn't need the work done why didn't you just give them the money why do you make them do a job you don't need if you are such humanitarian. Who asks people to work to recieve charity it's like a slap in the face along with your generosity. It's like me saying to a beggar asking for spare change, "Sure i'll give you some spare change if i can kick you in the a** for it."

Ray, clearly you are a sensitive person with a good heart, but your response to Antonio really distorts what he said and did.

He responded to people asking for work by hiring them to do work. It was work he wanted done, but which he did not necessarily need done right at that time.

But that is beside the point. It would always be a "slap in the face" to simply give somebody cash when they are applying to do work.

There is no dignity in that. And there is also no real help. A contractor just starting out who claims to be in economic distress and asks for a job will benefit far more by getting hired and having a chance to build up their work history and portfolio.

Paying an inexperienced contractor an hourly rate to do data entry work when they apply to your job posting is NOT the same as kicking a beggar in the a**.

[Mark S]

The policy COMPLETELY fails to recognize or comprehend the economics in some countries. The bets example (that I can poin to) is the Philippines. In the Philippines, even a college grad earns 466 pesos per day (and in Manila only). That is the minimum wage, so obviously this can go up. But many companies in the Philippines on;y hire people 6 months at a time to avoid them going into F/T status. Let's put it this way, if you are making P466 per day in the Philippines, it is more than most, and you woudl even be considered lucky. P466 is about $10.

So, let's do the math. If I have a VERY simple data entry job and I just need someone who can enter data into some fields, it might pay just $1 - $1.50 (before this minimum). And it is appropriate. 8 hours at $1.50 will actually be HIGHER than the minimum wage in the city of Manila - which has the highest minimum wage there. It's a job they can even do from home! Philippine employers are total "ball busters". Most peope would LOVE to work online. But now... you will have to pay $3 for simple data entry?? Nahhh. It is WAY over priced for this market.

Price fixing is NEVER EVER EVER a good thing. It's not good when government does it. It's not good in this case either. However, I do recognize that the higher rates means higher revenue for upwork.com because you get a cut of that income. In the same way, a minimum wage increase by the government has the same affect on employers - a tax increase.

This is a VERY bad idea. Hopefully you will see that soon and change your mind.

[Preston H]

Mark,

Thanks for your well-considered post.

Upwork's move to establish a $3.00 minimum allowable hourly rate was NOT met with enthusiasm by everybody, but it has widely been regarded as a success.

Everything you said about markets and pricing may well be true, but it is also inapplicable. Because Upwork is not a government. It is a private business

I'm not sure if "price-fixing" is the ideal word to use here, because that term definitely has connotations associated with government-dictated mandates and laws. This is very much a private, free-market enterprise establishing policies that work for itself as a business. I'm not sure that calling this "price-fixing" is any more appropriate than if you accused the Cartier shop in Resorts World Manila of "price-fixing" because they sell jewelery targeted at an upscale market and they don't carry any $2.00 pieces.

Upwork's move did not establish a minimum wage for Manila or anywhere else in the world. It estabished a minimum hourly rate for its customers, in order to "elevate the marketplace." Upwork recognized that there may well be legitimate jobs in certain markets that are worth paying $2.00 or $1.00 or less per hour for, but that would no longer be a market segment they would pursue. It makes sense, as you yourself pointed out, from a business sense, because it requires as much technical infrastructure resources and customer service personnel cost to service a $1.00/hour account as it does a $100.00 hour account, yet the revenue is clearly less.

Upwork's move to establish a $3.00 minimum made things better for Upwork, it raised the overal quality of jobs and freelancers on the platform (which is something that benefits most - but not all - clients) and it made things better for most contractors. It is better for most contractors to not have to deal with a marketplace with no minimum whatsoever. I feel like even contractors such as myself (with an hourly rate of $86/hour) benefited from the move, even though it is hard to say how I benefited *directly*, because clearly I wasn't competing for jobs at the bottom end of the spectrum.

I know this might not change how you feel about Upwork's move, but I hope you can see that you might look to Upwork for your more upscale freelancing needs, while using other resources for sub-$3.00/hour work.

[Darrin O]

---

@Mark S wrote:

The policy COMPLETELY fails to recognize or comprehend the economics in some countries.

---

Your country is the United States.  You should be paying a minimum wage of $7.25.  It even appears to be $8.25 in Nevada.  Everything you write makes it sound like the only reason you're here is to keep other people living in poverty.  If you really want to pay less than $3/hour to hire people from the Philippines or elsewhere, simply move to the country that has your acceptably low standard of living.  Problem solved.