I'm with Preston. It's entirely possible for a job to take 10 or 15 minutes of work, including writing a proposal, completing the work and sending it over to the client. Therefore, a pro-rata fee of $80 to $120 per hour is maybe a bit excessive.
The thing is, if they state a budget of $5 it doesn't mean you have to put in a proposal for $5. If you want a $20 minimum then self impose a $20 minimum.
You have a good point.
However, this has indirect consequence.
The blowback is you would be attracting many headache clients to Upwork.
This would in turn would give rise to more admnistrative overhead.
Another unintended consequence of this is that Upwork will be directly competing for the market share of the race to the bottom sites like Fiverr.
The overall goal of setting the price minimum is so that Upwork can distance itself from sites which has a reputation of being cheap.
A rising tide, after all, raises all boats.
I see what you see.
I'm new at Upwork, but from my observation, the fixed jobs is littered with $5 jobs.
In Elance you can get by with doing only fixed jobs, in Upwork I don't know if this is feasible.
There is even a criteria that you have to work a number of hourly jobs to be qualified.
What if the freelancer prefers fixed jobs?