George, according to Numbeo living expenses and average salary is very similar in my city and in Moscow, doesn't matter what a ruble was worth years ago.
If the dollar is worth more, why would it not buy more programming?
Because the programmers know what they are worth in the global market and are simply that good?
I'm sure there are many freelancers who charge 10$ and even less that would be happy to work for you.
All I wanted to say that those 1600$ are not that much when you take into account Upwork's 10%, taxes and the actual living cost in this part of the world. But I do understand it looks different from the other side of the ocean when you're not the one living it.
George, I think you need to stop trying to equate a employer - employee relationship and a client - freelancer relationship.
It would also be a good idea to not compare an hourly wage with an hourly freelancing rate.
when you employ someone you have significant costs that are born by you. When you hire someone as a freelancer those costs are included in their hourly freelancer rate.
I assume you don't intend to supply an office, furniture, computers, software, training, infrastructure, a canteen, a human resources department, a parking space, water cooler, insurance, paid holidays, sick leave etc etc etc etc to your freelancers?
you are comparing a US employee wage with an international freelancing rate.
that is a logical error.
when you hire a freelancer you are NOT an Employer.
Try finding a US based FREELANCER of the equivalent qualification and level and see what they charge for freelance work per hour.....
You make some good points. My employees work from their house, no office. They love that. Actually, they can work from the coffee shop. I don't care where they go. Andi is visiting her boyfriend in a different city, but she is still working today. I get up and program at 1am EST and I envision skyping with someone to help me program. They would get the same benefits as my other employees. So maybe upWork is not the proper forum.
But the exchange rate is what makes this doable.
I live in France and back on Elance I have hired a company in Bangladesh for some IT job.
I got many proposals and I chose what seemed to be the best provider. It was a good choice actually, I ended up being really happy with their expertise and I paid them what they asked. Their price was almost European, but before this thread it never occurred to me that I may have overpaid them.
Honestly, this is a global market and every client makes their own choices. I wouldn't even think of exchange rates or of the local inflation while making a hiring choice. If a provider submits a proposal to one of my jobs, I would either accept it or decline it, but the cost of living in their country is none of my business. What concerns me is the price/quality ratio.
And as a provider, I would be shocked if a client asks me to somehow lower my rate because they live in Manhattan and I live in the burbs of Paris.
I appreciate your experience. But you should look at the exchange rate with Russia.
It is massive. And Russia exports Oil and what other things? With the oil prices now, they badly need to export things to get hard currency. As a businessman, this is a unique opportunity for both countries.
I really think there could be a 10 fold increase in the freelance work coming out of Russia. To me, it is just efficiency. And it won't last forever. And relationships can be built and maybe when the exchange rate moves the other direction, the people I hire will be valuable employees who never would have gotten the opportunity except for this circumstance.
It is nice to hear from someone who hires people.
George, I hire people too, as does Preston for example.
I am not concerned with where they are. I am concerned with whether they can do what I need doing within my budget. They could be orbiting Plated Zog in a purple bathtub for all I know. I DON'T CARE.
It is none of my business where they live, what their exchange rate is, or what they do in their spare time.
Think of it this way:
If Freelancers in Russia weren't getting the rates they are getting they would lower their rates to earn money.
Their rates are what they get paid by clients.
If they have offers at their stated rate they will raise or keep their stated rate. If work at that rate dries up they may need to re-think.
You really need to walk away from location thinking.
You are on the Internet. As are the freelancers. That is all that matters....
If airfares to a place change, do you say that someone needs to forget about the rates and concentrate on where they want to go? Prices drive the market. It is irrational to ignore exchange rates. Where else in human enterprise do we ignore prices?
Russians have the weak ruble and US has the strong dollar and the people holding the rubles should get a windfall and the people holding the dollars should get no benefit. That is upside down in my opinion.
They get a job at their historic prevailing price ... in rubles ... and we get a lower priced employee. Win-Win. If they don't need a job, then none of this matters.
Preston's right - this is an absurd thread.
George, with respect, if you feel so strongly about this issue, why don't you just go ahead and find a cheap freelancer, and carry on with life?
It sounds like you're surprised and perhaps offended that this Russian freelancer is not willing to compromise his rate just to work with you.
Remember that you cannot dictate what freelancers charge or what they want to charge. If I had listened to clients like you - who don't want to pay up because of inflation, my location or some other silly reason - I would have been stuck at $9/hr forever.
A lot of people here (who are both freelancers and clients) have given you sound advice and input, but it just seems like you're looking to prove your point to every person who replies on this thread.
I'm sure you'll have no trouble finding a $10/hr freelancer - as for the quality of work, that's just a risk you'll have to take. You might as well link to this thread in your job post so that people who apply know exactly what kind of person they're going to work for.
Best of luck!
Maybe you're right.
I think you are judging me too harshly. I am sincerely trying to understand why the rates are not responding with the market and I was looking for an understanding. But I made a mistake in titling this thread and people found it offputting.
Truly, I don't need to hire a programmer, but if I can get a good deal I might want to hire one. I can do it all myself. But after researching the things people have said here, what is crystal clear is that a $20,000 per year salary paid at today's exchange rates is a hugely attractive job. It literally would put someone in the top 5% of earners in Russia. I can understand why competitors here might not like the competition this represents but for the Russian and for me it looks like a no-brainer.
I am not trolling and I have been respectful to everyone here. I am answering everyone because they went to trouble to respond to me.
Thanks for wishing me good luck.
This is a bit of an offtopic (as you shouldn't be counting how a freelancer spends his money, it's really none of your business), but:
Let's say 10$ x 8 hours a day x 5 days a week x 4 weeks a month = 1600$.
Personally, I can't imagine a freelancer working 8 billable hours a day for a longer period of time. I can manage 5-6 hours max, if I don't want to spend 10+ hours a day at my desk. I have to answer emails, find new projects, refresh my skills etc.
So it's 1600$ minus taxes and Upwork's fee in best case scenario. No idea about taxes in Russia, but I'm assuming it's quite a lot.
And here's a nice table with actual living expenses in Moscow - http://www.numbeo.com/cost-of-living/city_result.jsp?country=Russia&city=Moscow (as you mentioned Moscow in your first post - and Moscow is a very expensive city!).
To give a bit more perspective - Numbeo tells me the living expenses in my city are ~10% higher than in Moscow with the average monthly income being even lower.
Depending on the type of my business I would need to pay 9-45% in taxes. ~45% are full taxes on a salary from a business, if one is self employed I think it’s bit less; 9% is a special tax regime that’ll unfortunately be gone by the end of this year.
1600$ monthly income on Upwork for me as a business or a self-employed person would allow me to pay my rent and some utility bills. Oh, and I would have maybe 200$ left for other expenses. No, thanks.