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$1.78 Worker!! Exploitation?

by Gary Ning Lo
68 replies
Hi Warriors,

I recently had an interesting conversation with a marketer who is currently outsourcing most of his daily tasks for $1.78 an hour to someone from the Philippines. (Mostly FREE traffic tasks)

Personally i would really feel bad to pay this low for a dedicated worker.

What do you guys think? Ethical? Exploiting people?

Your thoughts

Cheers,

Gary
#$178 #exploitation #outsource philippines #worker
  • Profile picture of the author drewfioravanti
    It's all relative.
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  • Profile picture of the author Christian H
    Let me ask you this instead..

    If you were offered a job that would make you 2000$ a day for the rest of your life, as long as you kept working.

    Would you work for a year and then reinvest the money and quit the initial job?

    People pay other people low salleries to keep them working.. I hope you can see where I'm going with this. (:
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  • Profile picture of the author NoobSensei
    I don't see anything wrong with it. If someone is willing to work for $1.78 an hour, it's because he/she considers it a good wage. I think many people in developed countries shy away from it because they don't want to feel responsible for economic conditions in developing countries...but the truth is that the fastest way to improve a nation's economic wellbeing is to engage in trade with the people and businesses within that nation (witness China's meteoric rise over the last 30 years).

    I view it as both a smart business practice, and a way to help the people with whom you're doing business. (And I'm no libertarian, by any means...international trade is an extremely effective way to advance the progressive cause of reducing poverty.)
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  • Profile picture of the author onSubie
    If someone from Dubai hired an American for $50 an hour would you call that exploitation because it is below the hourly compensation in Dubai?

    Or would you say the American was lucky to get such a high wage from a wealthy foreigner?
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    • Profile picture of the author IsiahKemp
      Originally Posted by onSubie View Post

      If someone from Dubai hired an American for $50 an hour would you call that exploitation because it is below the hourly compensation in Dubai?

      Or would you say the American was lucky to get such a high wage from a wealthy foreigner?
      Very good sir, very good... 1 point has been added to your score.
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    • Profile picture of the author Josh Monroe
      Originally Posted by onSubie View Post

      If someone from Dubai hired an American for $50 an hour would you call that exploitation because it is below the hourly compensation in Dubai?

      Or would you say the American was lucky to get such a high wage from a wealthy foreigner?
      touché
      /10char
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    • Profile picture of the author Gary Ning Lo
      Originally Posted by onSubie View Post

      If someone from Dubai hired an American for $50 an hour would you call that exploitation because it is below the hourly compensation in Dubai?

      Or would you say the American was lucky to get such a high wage from a wealthy foreigner?
      Good point.. But still i think it really comes down to the purchasing power in the country..

      I live in a country where $400 is the average wage and but it's almost impossible to live ONLY from it..

      Maybe these guys in Philippines are forced to work for this amount per hour because they have no choice. (unemployment rate etc)

      Cheers,

      Gary
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      • Profile picture of the author domainscience
        Originally Posted by Gary Ning Lo View Post

        Good point.. But still i think it really comes down to the purchasing power in the country..

        I live in a country where $400 is the average wage and but it's almost impossible to live ONLY from it..

        Maybe these guys in Philippines are forced to work for this amount per hour because they have no choice. (unemployment rate etc)

        Cheers,

        Gary
        Why do you think U.S. Corporations have over 2 trillion dollars offshore?
        I can assure you it's not because they are paying U.S. wages to those workers where they have set up shop.

        I was once vacationing in Mexico, tipped someone $20.00 and my friends who are from there said I just put one of his kids through college.
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  • Profile picture of the author Igor Fridrihs
    Hey, Gary

    You can be sure it's ethical. Nothing wrong to pay so low money to a person who is living in Philippines. And not just there. I spoke to Ecuadorian guy recently. He lives in Quito (capital of Ecuador). The average salary is just $300 there.
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  • Profile picture of the author arranrice
    Their cost of living will be alot lower than the United Kingdom or UK... Its average for them!
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  • Profile picture of the author talfighel
    Originally Posted by Gary Ning Lo View Post

    $1.78 an hour to someone from the Philippines. (Mostly FREE traffic tasks)

    Personally i would really feel bad to pay this low for a dedicated worker.
    For you it may seem low but for the person who is doing the job, it may seem like normal pay that can put food on the table for them.
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    • Profile picture of the author Kay King
      What someone pays a worker - and what pay the work is willing to work for - is between the employer and the worker. My opinion of it is irrelevant as it's not my business.
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      • Profile picture of the author Patrick
        Originally Posted by Kay King View Post

        What someone pays a worker - and what pay the work is willing to work for - is between the employer and the worker. My opinion of it is irrelevant as it's not my business.

        Exactly, its between the two people, and if they have agreed upon a cost, means both are happy.

        Looking at your name, it seems you are the person who is outsourced here :rolleyes:
        Maybe not, but I don't get why you are sad about it...
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  • Profile picture of the author TimothyTorrents
    The cost of living in Philipinnes is shockingly low. Trust me, I lived there for 2 years. We paid our maid 1,000 pesos a week (24$) to cook and clean every weekday and she was so grateful to work for us.

    If someone is willing to work for such a low rate then why not outsource to them?
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    • Profile picture of the author Joe Stewart
      Originally Posted by timbonitus View Post

      The cost of living in Philipinnes is shockingly low. Trust me, I lived there for 2 years. We paid our maid 1,000 pesos a week (24$) to cook and clean every weekday and she was so grateful to work for us.

      If someone is willing to work for such a low rate then why not outsource to them?
      Exactly. I've had the same person working for me for over two years now and I don't pay her a whole lot either. I tend to base her wage on how business is going for me at the time. I give her a pretty consistent set of tasks for a flat rate every week.

      I also give her bonuses when I can, a paid week off every couple months and am very low key where she's concerned. I don't stress out on her or get mad. I'm very patient, very flexible, etc. Basically, I treat her very well. I just don't pay a large amount.

      She loves working for me! She's told me so several times and it's for all of the reasons above. Other people have paid her less, yelled at her, put her under stressful deadlines and basically treated her badly. I won't do that.

      For her and I both it's a great situation.
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    • Profile picture of the author arcamir
      Originally Posted by timbonitus View Post

      The cost of living in Philipinnes is shockingly low. Trust me, I lived there for 2 years. We paid our maid 1,000 pesos a week (24$) to cook and clean every weekday and she was so grateful to work for us.

      If someone is willing to work for such a low rate then why not outsource to them?
      Wow, I think you paid your maid a good amount. For a person living in the Central and Southern part of our country (Visayas and Mindanao) 1000 per week or 4000 per month salary of a maid is really high because the cost of living in these areas are low. for a person in the Capital or Northern part (Luzon) that is still a fair amount. :-)
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  • Profile picture of the author WebPen
    The traditional "IM" outsourcing world is ridiculously different than real life.

    Companies expect to pay anywhere from $50-$200 per hour for good labor, depending on the type of labor.

    Because you aren't just paying for that person's wages. You're paying for their admin, benefits, etc.

    The problem is that we have it built into our minds that we should compete with lowest cost, even though that's about the worst thing you can do, since somebody can always undercut you.
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  • Profile picture of the author Mikaedi88
    Interesting question really, $1.78 hour in the western world to any worker that's offline is exploitation, ie labour laws, in our country like in the states, you get unscrupulous employers prepared to pay a measly wage to their foreign workers.

    Online, maybe not exploitation, but quality of service, you outsource a job online to have something done say (Article writing) you won't pay more than $1.78, then what you get is what you pay for..cheap crap, no matter what country the work is sourced from.

    As with the first point about exploitation, if an employer is happy to exploit his workers for low wages, then it shows his ethics and honesty.
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  • Profile picture of the author travlinguy
    Maybe $1.78/hr. is all that person is worth.
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  • Profile picture of the author arcamir
    This is an interesting topic and I can see each one has his own opinion.

    I would like to express my opinion being someone who works online and gets paid with that rate. I am from Philippines. The minimum wage here, as far as I know ranges from approx.250 to 500 Philippine peso in a regular 8-hour working day. That is approx. $6.25 to $11. For a person here in our country, the $1.78 hourly rate is enough, it can already pay for the expenses like the electricity and internet bills and an average 'profit'. Personally, I believe this is OK if the task is not-so-hard and not time consuming, otherwise the rate should be higher.

    But, for a person here in our country who can't find any other job, regardless of how hard this the job is, he/she has no choice but to accept even a $0.50 hourly rate. I am speaking from my personal experience. It is better than getting lots of debts and getting hungry.
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  • Profile picture of the author Corey Geer
    Anything wrong with it? Nah, it's legal.

    However, I'd love to see the quality work that this brilliant Entrepreneur is receiving. I tried the whole ODesk $3/Hour route. After hiring probably over 100+ people and putting in a couple of grand into the project, most of the work was piss poor, had to be re-done and it was a pain getting them to actually work.

    Lesson learned for me.. as for everyone else, eh, we'll see.
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  • Profile picture of the author goodewealth
    I agree with the wages. I at one point didn't realize that I helped a staffer move from what was considered a impoverish area in Philippians to a nice part in the city based on my generous pay of $400 monthly! But, I will say this....he bs me the whole time for 3 months telling me that advertising takes time to show results. So, he got me....lesson learned on me for sure. But, now I have many coming to me begging for work for under $1 even. It is getting tough out here...but when you produce no kind of results and profits for me....what good are you even at $1 rate....I am loosing. When someone finds a good source other than odesk....let me know
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  • Profile picture of the author Benjamin Ehinger
    It really depends on what the $1.78 buys for the person. If this allows for them to live a decent lifestyle in their country, I wouldn't feel bad at all. It also depends if this person is from a company with many virtual assistants of this type. If so, they may be handling multiple clients and making far more than this meager wage per hour.

    Benjamin Ehinger
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  • Profile picture of the author datingworld
    This guy is being paid $284 per month if he works 8 hours 5 days a week...

    and the average salary of teacher in Philipines is £237, Flight attendant $203, Accountant $ 278 according to the World Salaries
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  • Profile picture of the author Nole Hopkins
    I think it depends on several factors, if you've ever gone on an interview one of the questions you've liken been asked is "how much are you interested in being paid?" If you're smart most times you say that it's negotiable and turn the question back on them, but if you aren't you'll name a price and most times get what you asked for (unless your request was way out in left field). The benefit for an employer asking you first is that if you low ball what they were looking to pay then great you make less, they save money and you're none the wiser. On the other hand if you ask them and they low ball you can always negotiate more. Perhaps that's what happened here, someone desperate for money gave a low ball rate just hoping to get work and some sort of income in. The other side of it is maybe the person who told you they're paying 1.78 an hour is lying.
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  • Profile picture of the author Joe Thio
    I'm curious how long the person would be willing to work for that price. I have no idea what a good wage is considered in the Phillipines, but obviously if it was insultingly low he wouldn't accept at all. Plus, if he finds a better job or wage, he will surely take it. If he does an outstanding job, it might be beneficial to give him a raise, as it might increase his productiveness even further.
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  • Profile picture of the author dhaniramkesari
    Like many others have mentions, it may seems unethical. But the average salary is probably below $300 yearly. So as long as they're being paid reasonably, why not?
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  • Profile picture of the author CharlesL
    There is nothing wrong with it whatsoever.
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  • Profile picture of the author Justin Says
    I wouldn't consider it exploitation unless the worker was unhappy.

    If I was paid $1.78 for doing something that made me happy (like playing video games for example) then I'd be okay with it.

    To some video games aren't fun and instead writing, marketing, business, website creation, are more fun.

    In most circumstances though I feel $1.78 would be entry level into the working for yourself type business.

    I mean wouldn't it be cool to get paid to practice growing a skill? I wish when I first started online someone would have trained me a skill that I could have made $1.78 from because I worked my tail off and didn't make anything for some time..
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  • Profile picture of the author katherineolga
    It isn't exploitation if that is within the realm of what is considered a good wage in whichever country. But, I don't like it. It drives the value down of the service that I offer my clients and I find it increasingly difficult to use the outsourcing sites. I won't write a 500 word article for $2 and I am not sorry!
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  • Profile picture of the author grandstar
    shave in my country cost $0.65 and a haircut $1.30. a plate of food the same as a haircut and there are even cheaper places to eat. from such a perspective, is the income low? i however cant do it. isnt worth the time. $3 or more will be better
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    • Profile picture of the author rodsav
      If both parties agree - then I would say it was okay.

      Thanks for the gift,
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  • Profile picture of the author refrud
    No, it is not exploiting them.

    I am from Australia but lived in the Philippines for three years. My wifes mother in the Philippines works on her feet for 12 hours a day in a kitchen made of bamboo, hotter than hell for less than that. And even though that it is below the minimal wage over there (which means nothing) there are literally millions of people who would die for it.

    The average person in the Philippines earns about $2 per day. So $1.78 is a great wage over there.

    Probably the same a provincial doctor is on.
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  • Profile picture of the author Gambino
    If someone is willing to freelance for $1.78, what's wrong with it? They can always find other work. Or not work if they don't need the money.
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  • Profile picture of the author Randall Magwood
    It is what it is. It's not like it's "evil" to offer $1.78 for services. I mean after all... the worker DID agree to the price.
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  • Profile picture of the author mikelmraz
    Worse. Some people make others write articles for no compensation. It's called guest posting.
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    • Profile picture of the author paulie
      Why do you consider this exploitational when most marketers are happy to pay $5 per Fiverr job which may take many hours to complete - netting the worker less than $4 after completion or when some western nations are happy to pay a hardworking waitress three bucks an hour??

      I guarantee you that $1.78 in some countries goes 500 times more than it does in the western world.
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  • Profile picture of the author Janice Stacy
    You will find people in Odesk who are working for $0.50 per hour. $1.78 is far more better than $0.50. I think so.
    It depends on the country and currency rate. May be what is dust for you, is gold for someone else.
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  • Profile picture of the author Romeo90
    I would call it helping people, not exploiting - the cost of living is very inexpensive in the Phillipines compared to what we are used to in the West.
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  • Profile picture of the author Mreese601@gmail.com
    I wouldn't feel bad if that is what they offered for the service. I wouldn't offer to pay someone that if I know I was getting 30 to 40 time return. but hey you do have to look at the cost of living.
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  • Profile picture of the author Sornie Samante
    That's OPPRESSIVE.
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  • Profile picture of the author SerpSlayer
    It's not exploitive. In most cases, the only reason the worker was hired, is because they are willing to work so cheaply. Would they be better off with no job?

    You can't live on $1.78 an hour, in America, but in many third world countries, it's a very liveable wage.
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    • Profile picture of the author Sornie Samante
      Originally Posted by SerpSlayer View Post

      It's not exploitive. In most cases, the only reason the worker was hired, is because they are willing to work so cheaply. Would they be better off with no job?

      You can't live on $1.78 an hour, in America, but in many third world countries, it's a very liveable wage.
      I realize, it depends on their worth. So yes, it is not oppressive. I rest my case
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  • Profile picture of the author Jeff Lenney
    It depends where the worker is. In Cambodia, the average daily income across the COUNTRY is $1.00 USD per DAY - or $2.00 - $3.00 per day if they're living in the City, Phnom Penh. The cost of LIVING is also quite low there, you can get a bowl of Nom banh chok (noodles) for $1.00 or less, even as a tourist - if you go into the NON touristy joints.

    So, would I pay somebody 2 weeks income for 8 hours of work if they're in Cambodia, or elsewhere in SE Asia? Absolutely - and I do - and I also give bonuses and tips when they do a great job, or just because I'm in a good mood.

    In the Philippines, the average income is about $10.00 per day across the country - I pay people there regularly $5.00 for a decent article, or sometimes just $25-$30 for a bundle of $5.00

    In India, they're at about $3.00 a DAY (USD) On Average

    Don't think of it as you ripping people off, you're really not - they've got much lower costs of living - and in many cases they're making VERY good money when compared to some of their peers - due to the online work they're doing.
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  • Profile picture of the author TravisO
    Originally Posted by Gary Ning Lo View Post

    Hi Warriors,

    I recently had an interesting conversation with a marketer who is currently outsourcing most of his daily tasks for $1.78 an hour to someone from the Philippines. (Mostly FREE traffic tasks)

    Personally i would really feel bad to pay this low for a dedicated worker.

    What do you guys think? Ethical? Exploiting people?

    Your thoughts

    Cheers,

    Gary
    Yes that makes the contractor very happy. But, if you feel that it is not enough, try to increase your pay.
    I myself are really encouraged and dedicated to work if ever the pay is more than I expected. You know, I think $1.78 is not really enough, it's like making someone slave.

    But I tell you, if you increase their pay, expect that that contractor of Philippines of yours will really perform a lot more than you expected.

    And lastly, yes, $1.78 is a slave payment lol. Depends on your conscience though.
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  • Profile picture of the author pogospring
    Be nice and bump it up to $2.

    22 cents is nothing to you but it means a 12% salary increase for them.


    I used to pay a VA under $2 per hour, she did such a good job freeing up time from a drop ship business I was running that I was happy to pay her a little more than 'average' and increased her pay. This made a real difference to the way she and her daughter lived.

    If they're a good VA pay them above the average. A good VA is hard to find.
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    • Profile picture of the author TravisO
      Originally Posted by pogospring View Post

      Be nice and bump it up to $2.

      22 cents is nothing to you but it means a 12% salary increase for them.


      I used to pay a VA under $2 per hour, she did such a good job freeing up time from a drop ship business I was running that I was happy to pay her a little more than 'average' and increased her pay. This made a real difference to the way she and her daughter lived.

      If they're a good VA pay them above the average. A good VA is hard to find.
      Yes. But $2 seems also not enough. Maybe $2.50 will do.
      Like in other countries, people must pay their insurances and other government forms of insurance. And also, there were no benefits too.

      One who outsource must not think in a way that they can hire people then perform such tasks without thinking that their pay is very low. It must be considerable. I'm not saying that paying those Filipino VA's as if it is the same with the average salary in your country, but look at it, they are still humans

      By the way, I pay my Filipino VA $5 per hour and I am very productive in many ways with that VA.

      Who would say $5 per hour is very oppresive?
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      • Profile picture of the author Gary Ning Lo
        Originally Posted by TravisO View Post

        By the way, I pay my Filipino VA $5 per hour and I am very productive in many ways with that VA.

        Who would say $5 per hour is very oppresive?
        $5 per hour is very reasonable.
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        • Profile picture of the author Kay King
          I just had an offline experience that perfectly illustrates how I feel about "paying employees".

          I hired a man to do some yard work for me. He does this for a living and his quote was reasonable compared to others.

          He did the work a few days ago - and went far above what I had expected. He did more work than I had asked him to do because "it just made it look better". I was impressed.

          When it came time to pay him - I paid him double the agreed price. I couldn't in conscience pay a low price for such good results. I was happy - he was happy. Win win
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        • Profile picture of the author TravisO
          Originally Posted by Gary Ning Lo View Post

          $5 per hour is very reasonable.
          Yes, as a kind of considering that VA of mine to work with full of qualities and she would become very reliable in the near future. As a kind of help too.
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  • Profile picture of the author edhuu
    It's not a problem. If the worker happy with that fees, then it's ok.
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  • Profile picture of the author kylecom
    I wouldn't pay that little but if thats a lot of money to them its only because I haven't found anyone doing the quality of work I require for that price, not saying they aren't out there but I have found its harder to find them when your paying less.

    Being Australian with high cost of living, the difference for me between 1, 2 or 3 dollars is very little and I would rather pay more for quality work. Also as people above me have said, as it is little to me, if I can pay a little extra and make someone elses life that much better because of it I believe I will usually be rewarded with hard work and loyalty.
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  • Profile picture of the author Rennell Garrett
    It depends on the country. For some people $2 an hour is a nice payout.
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  • Profile picture of the author Curtis2011
    Anyone who is morally opposed to paying low wages for foreign work is completely ignorant of international economics.
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  • Profile picture of the author Anonymous Affiliate
    You know what is exploitation? when in the last year of college you intern for months at a firm under a so-called "scholarship program", and all you do is photocopies, stupid tasks, etc... FOR FREE! So not only you don't learn a thing, but neither you get paid a dime LOL
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    • Profile picture of the author Gary Ning Lo
      Originally Posted by Anonymous Affiliate View Post

      You know what is exploitation? when in the last year of college you intern for months at a firm under a so-called "scholarship program", and all you do is photocopies, stupid tasks, etc... FOR FREE! So not only you don't learn a thing, but neither you get paid a dime LOL
      Agree FREE internship is really exploitation.
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  • Profile picture of the author dmister
    While it does sound unfair I think it really depends on the purchasing power of such a low amount which most be at least double compared to countries like the US and UK.

    If they are happy to work for such an amount then I guess it is fair enough. If it was me I would at least round it up to $2 or maybe you should give them a decent bonus if they do a task well but for basic pay it seems fair enough.

    Why do you think everything is made in China?
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  • Profile picture of the author hardnova
    If you outsource for $1.78 an hour.., wow, what can you really say about that
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  • Profile picture of the author rleejr
    I'd have to say yes & no.

    No, because I'm sure before the employee started, a negotiation was made. Knowing that she agreed on that rate makes the employer clean. I mean, the employee, or applicant if I may say, can always say no to the offer, right? She could have asked for a higher rate if she felt that she was worth more than $1.78.


    However, I have a few workers from the Phillipines and based on what I observed, they are not the vocal type. Especially when they badly need the funds (I know because they add it on their cover letters), they would settle for any rate, even lower than $1.78, cause it's better than getting nothing.

    It is up to the employer then to know and be sensitive enough. What I do is I evaluate the tasks that I will give and pay them accordingly. If their bid was lower than my budget yet they performed well, I'd still give them the rate I originally planned and call the excess a "bonus". It always makes them extra happy!

    Hope this helps!
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  • Profile picture of the author Charanjit
    bad time to say I get most of my workers from odesk and most ask for a starting wage of $0.11 cent to $0.56 cent an hour. They can do the tasks I don't have time to do, simple tasks. But on the odd chance you find a gem, was getting medical articles written by a fully qualified Pakistani doctor for $0.50 an 500 word article and wow was some of her stuff good.
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    • Profile picture of the author Gary Ning Lo
      Originally Posted by Charanjit View Post

      bad time to say I get most of my workers from odesk and most ask for a starting wage of $0.11 cent to $0.56 cent an hour. They can do the tasks I don't have time to do, simple tasks. But on the odd chance you find a gem, was getting medical articles written by a fully qualified Pakistani doctor for $0.50 an 500 word article and wow was some of her stuff good.
      That's incredibly cheap for a quality writer :O
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      • Profile picture of the author CyberAlien
        Originally Posted by Gary Ning Lo View Post

        That's incredibly cheap for a quality writer :O
        Yea... I've never seen a quality writer at $0.11 lol
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  • Profile picture of the author Adie
    $1.78 x 8 = $14.24 x 40php = 569.6 Php/day

    The minimum wage rate in Metro manila area is around 450 Php/day and around 310Php/day in provincial areas. You should not feel bad about it. If you are earning thousands of $ per month then its up to you to pay more than $2 per hour.... My writers are earning around 750 Php each day and they are happy...
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  • Profile picture of the author sbucciarel
    Banned
    Unless someone is holding a gun to their head, it's at worst ... self exploitation.
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  • Profile picture of the author Richard Tunnah
    I've chatted lots to many VA's I have used from the Phillipines and as stated their cost of living is low. One of my VA's life long ambition was to earn $1k a month. His mother is a senior nurse with 30 years experience and earns just under $400 a month. I reward my long term VA's at Xmas to stuff like microwaves (which are luxury items apparently).
    I think it's difficult to compare a flat hourly wage across the world. Where I live in Lanzarote (a western country and part of Spain) it's not unusual that local waiters work 80 plus hours a week to live.
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  • Profile picture of the author briankno
    You mentioned daily tasks. This is probably not high level creative work but things that are easy to do with simple instructions that need to be done. It would be a waste for the business owner to do them himself. If you can get an affordable price for your business then I say go ahead.
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