Team Sleep - 2006 Demos - 00 Formant.

Team Sleep consists of a group of friends that includes members of such groups as The Deftones, Crosses, The Dillinger Escape Plan and Marilyn Manson within their ranks. The group s 2005 selftitled debut album captivated the world with its experimental and at times unclassifiable amalgamation of musical styles. While reception for Team Sleep was positive, the individual projects of the members didn t leave much time for a proper follow up. However in October of 2014, close to ten years after their debut, Chino Moreno, Chuck X, CrookOne, Rick Verret, Todd Wilkinson and Gil Sharone descended on at Applehead Studios (Coheed & Cambria, Chiodos ) in upstate NY. The resulting record Woodstock Sessions Vol 4 includes powerful reworkings of their classic material as well as official versions of songs heretofore only appearing in demo form.

Hugely impressive - Kerrang - 4K.

I wasn’t going to write this article. I was comfortable with my stance on outsourcing, comfortable enough to recommend it and promote products, and profit from the affiliate commissions, from people who use the catch-call of $2-per-hour labor and the phrase – “ they do the work, you get the money“. I’ve begun the process of outsourcing to the Philippines.

We’re currently running tests to find a good graphics person, then next up will be a coder, a VA and so on until I have a solid team of talented people, all of whom will cost under $1600 a month total to employ full time. I can’t even hire ONE Australian full time on that kind of money, let alone an entire team. I decided to write this article and highlight this issue because it bothers me.

The people who emailed me to explain that outsourcing bothered them and that I contributed to the problem by promoting the idea, are to be credited for this article as well. A friend who challenged me, who pushed me to look very closely at my attitude towards outsourcing and the bigger picture, is also due credit for pushing me to shine a light on the issue and change how I outsource. Sometimes You Need To Challenge Accepted Practices If you’re considering outsourcing overseas, or you already do, it’s important you read this article. Over the last few weeks I wrote several articles on the subject of outsourcing. It’s fairly obvious that I recommended outsourcing as a great way to grow your business or even start a business, and enjoy true leverage through help from other people. The basic premise behind the type of outsourcing we are talking about here, is hiring people from other countries where labor is comparatively cheaper than hiring from your local country. This is only true if you reside in a country with a strong currency and comparably high average salary, like the USA, Canada, Australia or countries in the European Union.

People from wealthy countries outsource to people in poorer countries in Asia and Eastern Europe, where there are plenty of skilled individuals willing to work for a fraction of the cost of hiring locally. When I first heard about this concept many years ago it sounded like a great opportunity for me as an Australian earning money online in US or Australian dollars.

Then, as I grew more exposed to the Internet marketing industry, when people promoted outsourcing, using language like “ you can hire people for $2 an hour” something bothered me. I didn’t understand how people could be paid only $2 an hour and that not be considered slave labor. I started to wonder if this was a form of exploitation. During John Reese’s Outsource Force launch campaign, which I promoted in my, John released a video which used the phrase “$2 an hour” as part of the benefit of outsourcing. This, at least to a business person thinking about reducing costs and increasing profits, is a selling point and well worth promoting as a good thing. My readers are a varied bunch of people who come from all walks of life, with all kinds of opinions, which is wonderful because you provide me with different perspectives on what I write about.

In response to some of the emails I sent out promoting John’s launch, I received a handful of messages from people upset that I was supporting what they viewed as exploitation, especially around the concept of $2 an hour labor. While sometimes I receive negative feedback in response to my writing, it’s not often that I feel a need to write a post to respond to an issue. This time, I do – and it’s because on some level I actually agree with the negative feedback, which tells me that it needs more open discussion.

What Do People Think About Outsourcing? I’ve interviewed internet marketers many times where the subject of outsourcing has come up.

It’s such a common subject, because nearly all successful internet businesses use outsourcing in some way. In fact, outsourcing is often at the heart of the success of online business because of the leverage available from cheap labor, and the ease of access to it thanks to the digital age.

Recall the interview I did with, where he explained how he uses overseas outsourcers to build his niche websites and earn as much as $90,000 a month in income. During the call I asked Adam to justify his use of outsourcing given the claim that it could be viewed as exploitation. He explained his argument, which I came to see as a reasonable point of view, because it is based on helping people in other countries, not taking advantage of them. More recently I, who specializes in outsourcing to the Philippines. Due to the negative feedback I had received about the idea of outsourcing in the past, I specifically challenged John during this interview to explain his take on the exploitation issue.

He had the same argument as Adam, which as you will hear in the recording with Jonas, I agreed with and supported. When my business partner recently hired a full time Filipino at around $400 US a month, I had a long discussion with him about why it is okay to do this and why it is not exploitation. Just a couple of days ago as I write this article, I talked to Gideon again and asked him to reiterate his stance once more.

We talked for almost an hour about the subject, and agreed that the situation is not ideal, but on an individual basis, we are helping the people we outsource to. I also asked my assistant Angela for her take, which turned out to be interesting as she had been discussing it with her husband, who had a view that I should hire locally to support Australia. I spoke to some of my other friends to get their opinion on the issue. I also have the feedback emails I’ve received from people in response to my recent articles and emails about outsourcing, as well as feedback in the form of blog comments, including comments from several Filipinos, who explain what it is like being an outsourcer living in their country. My conclusion after all of this is that I don’t actually have one that sits comfortably with me 100%. Clearly the issue is not black and white, however I have decided to make a change, and I’ll explain why now. When Is Outsourcing Bad?

When Is It Good? Before I talk about what I am going to do differently, it’s a good idea to lay out some of the biggest complaints people have about outsourcing overseas, so we know what we are dealing with and really take a deeper look at this issue. I’ll also explain the common justification that most marketers use today to reason why outsourcing to cheap labor is okay, which you might explain as the good outcomes as a result of outsourcing. Let’s begin the with the arguments against it • Outsourcing overseas means you are not hiring locally, which results in fewer jobs, or even lost jobs in your country. • Outsourcing results in a flow of cash out of your country into another, potentially having a detrimental impact on your economy, causing local businesses, who employ locally, to lose business to cheaper overseas groups, and possibly even close up shop completely. • Paying $2 an hour (or similar) is slave labor, even if workers are happy with their pay.

People should be paid a fair wage based on the benefit you gain from them, not what the fair wage is based on the standards in their economy. • If people work for you at pennies on the dollar, and you reap massive profits because of that – in other words, they do the work and you keep the money – it’s simply not fair. Why should one group do most of the work for enough money to survive, while another group becomes stinking rich? We have two major issues at play.

There is nationalism and the sense of separation of peoples based on geographical borders (the “us” versus “them” mentality). This is a belief that if you give to one nation (in this case hire people overseas), you are causing a loss to another nation (your country, because you don’t hire locally). The other issue is fair pay for fair work, which is subjective. There are benchmarks and standards prevalent in every country, although that doesn’t mean it’s simple to know exactly what is “fair pay”.

One of the emails I sent out promoting Outsource Force talked about how I am looking to hire two Filipinos at a rate of around $300 to $500 a month for full time work. Later in that same email I wrote that I am offering half hour consultations, which I valued at $500, as a bonus for buying through my affiliate link. Why is my time worth $500 for 30 minutes and someone in the Philippines worth $300 a MONTH? You might claim that my time is more valuable because of my knowledge and position. It’s the same argument as to why a CEO of a company gets paid so much more than a mail boy in that same company. (There’s an argument to say that pay scales are out of whack in Western countries too. Why does a professional athlete in certain sports earn so much more than a nurse or a teacher?

But that’s a discussion for another day) To put it simply, we “value” certain roles greater than other roles. Sometimes this is justified due to the nature of the role requiring specialized knowledge, which could take years of study and practice to accumulate, or the responsibility for outcomes in that role is perceived as significant, thus due significant remuneration. Other times it’s the value society as a whole has decided to let something have, even if the justification might seem out of whack. We often accept things, even if we don’t like them, because we don’t have the impetus to change them – there are other things in our lives we choose to focus on instead.

It’s much easier to complain about something, than actually do something to change it. So how can outsourcing overseas, when the pay rate seems so terribly small compared to the amount of time put in by the worker, be considered fair? Even though $300 USD a month may not seem like much to someone living in a developed country, in Thailand, or Romania, the Philippines, or India, it’s above the average monthly wage. Sometimes as much as three times the average wage in that country, meaning this person is actually very well off when compared to others in their country. That money affords the worker a quality lifestyle in their homeland.

It may even provide enough money for them to support their family, which no one is going to argue is a bad thing. Throw in a few bonuses, some extra incentives for good work, and you have a situation where you feel like you are empowering someone and saving them from a situation where they might otherwise be earning half that money doing something like washing dishes.

That’s great right? You can’t argue against improving the quality of someone’s life, and in exchange you get a hard worker for your company? In isolation, no, I don’t think you can argue there is anything wrong with helping people in a relationship where everyone benefits. The problem – which could be perceived as a moral one – comes from a situation where the value one person derives from the transaction is so much more than what the other person does. Of course, again we have the challenge of deciding how to “value” value – it’s different to everyone and a completely intrinsic judgment. If $2 pays for a fantastic meal in Thailand, and the same meal costs $50 in Australia, yet the people who consume the meal all experience the same level of value – the satisfaction from a good meal – what’s the difference? It’s also important to consider what people value.

In Western culture we value “things” and focus on accumulation of material possessions as a means to feel good about ourselves, even if it is only a temporary satisfaction. In other cultures family, or community or faith are more important, and if your basic needs are met, there is no need to earn more money, it won’t result in any more happiness, and thus some people choose not to go after more money simply for the sake of material wealth. However all of this assumes basic needs are being met, and in most countries where outsourcing takes place it is safe to say they are not – there is work still to be done to bring these countries up to developed standards.

Exploitation Or Just A Better Use Of Resources? My friend Chris, when I asked for his opinion on outsourcing and whether it is exploitation, agreed with the topic definitely being a very “grey” issue, and came to this conclusion He views outsourcing not as exploitation, since the workers feel a benefit from their employment and are happy to do the work for what they are paid, however the business or person who does the outsourcing is taking advantage of a situation – a situation of inequality. If you ask people who own businesses and outsource, would they pay what is considered an average wage in their country to get the same job done as they currently pay at much cheaper rates to someone overseas, they will probably say no, they won’t. You can’t afford to pay $4,000 a month to a local graphic designer for your business, so you don’t hire anyone, but you can afford $400 a month to an overseas outsourcer, in which case you do employ someone. In this scenario, at least someone gets a full time job, and your company grows quicker, allowing you to employ more people.

Let’s not forget, there’s nothing stopping an entrepreneur from the Philippines also hiring cheap labor from the Philippines (or India, or the Ukraine, etc) and reaping huge profits selling in American dollars on the Internet to a global audience, including Americans. Anyone with access to the Web has the same opportunity, it’s just what you do with it that counts, right? Well sort of.

For many reasons, very likely due to the education system, values, culture, infrastructure, standards of living, and the economic and political environment, it’s much more likely that a person from a rich western country will start a business and outsource. People in third world countries face greater inherent challenges, and may simply not see entrepreneurship as an option to them.

They don’t have the awareness of the opportunity on the same scale as people do in Western cultures and face more barriers to entry. Here’s How I See The Problem I look at it like this: On a micro level, outsourcing is helping the individual and those around him or her. It improves their lives, which is great. On a macro level however, what we are looking at is one group of people who live in a richer country taking advantage of a situation that exists only because another country is poorer.

On a macro level, the inequality is obvious – that’s why we have the label “third world country”. This means the standards of living are not the same, and we should be doing everything we can to ensure all human beings on this planet have basic standards like food, shelter and health. This begs the question – does outsourcing help a country move away from third world status and raise the standards for everyone in that country?

I think the answer is yes it does, but it’s terribly slow. I like using a projection based on what you might call a utopia of wage equality and financial opportunity, which could arise as a result of movements like outsourcing (others might call this globalization, but I think that label is difficult to interpret – it means different things to different people). If enough money flows from one country into another, then the country receiving the money becomes wealthier. As it becomes wealthier the value of its currency becomes stronger and wages increase, thus outsourcing becomes less viable because it’s no longer “cheap labor” – it starts to move towards parity with developed countries. The natural outcome as a result of this is for businesses to look for other countries where labor is still cheap. Eventually, given enough time, and believing in a world of abundance rather than scarcity, it’s possible to conceive that this process will help to equalize all nations, create a global currency of equal value and a global standard of wages regardless of what country you are located in. This outcome may be a pipe dream, or even if it is not, we are not going to get there quickly.

The big fat reason for why this is? If people and companies prefer to hoard profits, which don’t forget is the purpose of a publicly owned company – to maximize profits for shareholders, most of whom live in developed countries – and this profit is made off the back of transactions based on inequality, like outsourcing to third world countries, then change is slow and one group benefits exceedingly more than the other.

How Can We Speed Up The Process? The simple solution to this problem is to not be greedy. That is such an easy statement to write in an article, but such a challenging concept to embrace fully and make part of your life. I’m greedy almost on a daily basis, yet I know I want this to change. One attitude shift that I think is particularly powerful is to stop looking at the people in other countries as somehow separate from you.

An American or Australian is no different from an Indian or a Filipino when it comes to basic human rights. We are all human, and if the person living next door to you was starving and you have ample food, you’d offer some to them right? So why is this different when it comes to someone living overseas? Does the distance between you and them or the perception of differences based on race or nationality make it easier to discriminate? Yes it does, but it shouldn’t.

If you look at every human being as a member of your family that you care about just as much as you mother or father or sister or brother or daughter or son, then you wouldn’t allow yourself to be greedy while they suffered some kind of basic lack in their lives. I’m not saying that people in the countries we outsource to are starving (although some are – and developed countries have problems too), but there is certainly an inequality that is not acceptable, especially if you continue to reap massive profits as a result of it, without doing more to give back than just taking advantage of it by paying a “good wage” based on current standards in that economy. It’s critical that you adopt an attitude of abundance over scarcity.

This process is about everyone having enough AND people enjoying wealth in exchange for passionate work. This is viable if you believe there is enough to go around if we learn how to distribute it without greed, or fear of loss. You have to stop trying to keep up with your peers when it comes to accumulation of material possessions. Stop believing that by having more than what others have you will feel better.

Avoid materialism, don’t listen to advertising and never attach your happiness to ownership of products – it’s an illusion that never lasts – you know that already. Understand that giving will make you feel good permanently, not buying things – you can’t fight this, it is part of your nature. Know when enough is enough. One way to speed up this process is to take it on board as your responsibility to help the third world countries you outsource to, to raise their standards by reinvesting in, and supporting organizations that help people in that country. The challenge is what proportion of the profits you reap from outsourcing, do you consider fair to return in support when it comes to helping people in other countries?

Some would say that simply choosing to outsource to a specific country is enough help. If a team of three full time outsourcers that cost you $1,000 a month helps you to make $20,000 a month in return, that’s just called good business right? You deserve to keep the profits and of course, your main focus is to make more. Once you make $20,000 a month, you want to get to $50,000, and then a million a year, then ten million and so on. There’s always more money to be made, and thus your profits should be reinvested towards continued growth. Can you see a problem with this treadmill?

There’s no endgame here and eventually the only purpose behind making more money is to make more money. Once you reach a certain amount, adding more millions really doesn’t matter, unless of course you are using it to help those in need.

I know as my truth, if you really drill down to our core motivations, the only real meaning you can derive from your human existence, is through helping and having an impact on others in a positive way. Ask Yourself This Question All of this comes down to choice, and your choice is based on your attitude.

As you can tell, my own attitude has been in flux in regards to this situation, but deep down I’ve known something hasn’t felt 100% right, which is why I’m writing this article. You may or may not agree with me, that’s okay, but at least discussion is possible – change begins with awareness.

In my case, I’m going to commit to taking a larger chunk of the profits I make in part thanks to outsourcing, to directly support the countries I outsource to. I want to do more than just offer employment to a few people in that country, I want to help the entire population benefit in thanks for the benefits I gain. The challenge I issue to you is to ask yourself whether, if you are outsourcing to cheap labor, you feel you are doing enough to help others with the profits you make. If you honestly feel good about the situation, that’s fine, keep doing what you are doing. If on the other hand, something is niggling at you, then consider what you are doing to give back. I realize many reading this might be struggling to get by in the first place, and even finding $300 a month to outsource to just one full time employee is challenging enough. My intention is not to discourage you to outsource.

On the contrary, whatever you can do to get yourself more quickly into a situation to help others is a good thing. Outsourcing can help your business grow more quickly, and as we discussed, it does help the people you employ. I haven’t changed my plans to outsource, only how I redistribute what I reap from it. Just remember when you finally do break through to financial security – and that doesn’t have to mean you are a millionaire – you have the opportunity to support those who support you. If I have helped to plant that seed in you, then writing this article has been worthwhile.

Thanks for reading this to the end, good luck with your outsourcing and your business and don’t forget you always have the option to become part of the solution rather than just complain about the problem. I value your feedback in particular on this subject, as I am far from in complete knowledge about the situation. If you have something to say, no matter what point of view you have about outsourcing or where you come from, please leave a comment. Yaro Starak Deal’n with issues. Honestly Yaro that is the exactly the same thought I had since 2 years ago.

Not from a business perspective slash managerial side but more as a citizen. I live here in Philippines and Im a Filipino. I heard that there in Australia a $3000 monthly income is just the minimal/average salary but here in Philippines that is exactly a dream income for most people here. I mean that is even the monthly salary of a manager or just someone who has a very high position.

I don’t know Yaro but it bothers me in the sense that I used to really think we are really really getting exploited. Bragging aside but its well known that the best country to outsource outside India is Philippines because we speak english well and we’re extremely talented and that somehow adds to the agony. People here could easily triple their income by starting their own business (if theyre taught) but instead they opt to work for other people and think they’re earning big already. Your post is a real lengthy and an in-depth one and as I get to become older Im starting to realize that its not really exploitation.

The world is full of market imbalance and as an entrepreneur, our goal is to actually find those imbalances. After all this is a business and Im sure people understand it that way. But still its just hard to fathom (more from a personal side for me), why its just like that. People working extremely at the same level or pace with others but are earning income very different from each other just because of where they’re coming from. I don’t think it is “exploitation” ever. You are doing a good thing providing work to someone who is willing to work for that fee. You do not force anyone.

If any of your workers want to earn more by setting up their own businesses, they are free to do so. So you are not forcing them, you are not deceiving them, therefore you are not exploiting them in any way or manner. IF there is so much “labor value difference” that, marketers can make $90,000/m by outsourcing ALL the work, soon ALL THE MARKETERS will flood in (just look at the number of recent courses teaching outsourcing), trying to outsource all the work, and money flow will grow rapidly to Philippines and such poor countries.

And then, labor prices will go up, and the labor value difference will go down, making outsourcing not-so-profitable. Free markets will always correct themselves. There are other things keeping poor countries poor, like IMF, WTO, World Bank, WIPO etc, backed with military supremacy of US and Europe. That’s what I call exploitation, not free trade of labor and services through Internet. If anything, it is benefiting these poor people and their countries. Ozer, you are completely right. “Free markets” always correct themselves.

The cons that Yaro speak of is found everywhere here in the US. The white man gets paid way more than the female or minorities for the same job. The female and minority can work for the same company, have the same education, same work value, everything same, but the white male will get paid more. Minority students who go to the same school and have the same teacher gets lower quality of education. Due to the attitude of the teacher. The problem is that here in the US, there is no such thing as “free market” due to all the regulations that the government puts on us.

I can’t really say if this was a good thing or a bad thing. But something is not right.

And if $3000 is the minimum wage in Austrailia, by golly then maybe I should move there. Corporate America has nothing on them. Families here don’t make enough to pay a mortgage, and struggle to pay rent and put food on the table. Most make the minimum wage of $7.25 an hour and have a hard time finding full time employment because the companies don’t want to be forced to pay benefits. Yeah, I don’t think most of the people living in the US agree that we are any better off than the third world countries. Most families here are having a hard time feeding their children too. It is just not publicized.

And congress is too busy giving more power to the big corporations that caused all the problems in the first place. Greed, yes, that may be the root of all problems. I only hope that if I ever do get to make millions, I remember what Yaro said and take all those millions to help others and undo what has been done to ruin the US. Emily, As a Freedom advocate, I see all governments as forces of Evil, not anything good at all. First, all governments are paid based on not what goods or services they provide, what value they create, but based on forced extortion (read taxation, inflation or devaluation). However, government systems does not work, simply because those people in charge are not any wiser than any of us, and are not “less greedy” or have “better morals” than any of us (probably even worse than average). Yet, when an individual makes a mistake and fails, he only harms himself, but when a government officer makes a mistake and fails, he harms the whole nation.

This is why “big governments” are failing in the US and Europe. They are based on a lie. They are no better than a criminal mob “protection racket” saying “pay us our commission o. Ozer, Governments are not sources of Evil. People are sources of Evil.

You can have democracy, dictatorships, free markets or anarchy. Evil will occupy each one because all of these systems involve people. Perhaps you mean to say that the concentration of power governments provide allows for greater Evil to take place than would otherwise be possible. That may be, but it seems that a majority of people in the west at least are more comfortable with that possibility than they are with the possibility of being taken advantage of in the wild west that you propose. Yaro, Thanks for your views and for creating a serious discussion.

I’ve been out souring for nearly 12 mths and I’ve had to think through some of your moral challenges. A few points:- >>Your point that our neighbour these days can be our PA or IT programmer in India or the Philippines & us as Internet marketers should be the first to understand that the Internet has no international borders. So I agree with you we shouldn’t be exploiting our neighbour were ever he lives. Since we have laws to protect against exploiting our low skilled workers maybe if we can self regulate we need International lawyers to protect our international neighbour (3rd world) from being exploited by us out sources. >>Yes I’ve had people bid for jobs as little as a few dollars an hour but just because 25 people desperate need the work. I personally don’t want to exploit this situation to by advantage. I always pay a fair fee and often give a bonus for work well done.

I’ve got a “PA” who works 24 hours a week for me she is over qualified University graduate who works for me at $8.35AUD p/hr I’m still saving and I don’t feel I’m exploiting her and I can also find other ways of helping as well. Also I employ Indian Programmers. >>While in BKK airport on my way back from India February this year I bought a great book “Creating A World With Out Poverty” Nobel Prize Winner M.Yunus The founder of the Micro Credit bank for the poor now 30 years later lending some 50Billion US to the poor with out security at cheap interest most funds loaned to Women for home based business ventures. This book is aimed at us in the West how we can structure our business to have a higher purpose I found this booking moving and challenging and has inspired me to think of my business to have a moral purpose as well as be profitable. Thanks Again Yaro Paul.

Yes, I understand the reservations voiced over this whole issue. I have just hired my first outsource worker in the Philliipines and there is a little part of me that feels uncomfortable about it, and a large part that is elated on many levels, including the possibility that I might positively contribute to their career too. Let me tell you a tale which put it into perspective for me.

Years ago when I went to South Africa from the UK I resolved not to employ any black labour in the home because I felt it exploited them. I soon changed my mind when I had lovely ladies trying to make ends meet and feed families begging me for a job, In the end I wished I could have employed more to help them out.

If I had maintained my refusal to hire them I would have been mean. Exploitation is when you take advantage of someone. If someone is desperate to work for a lower wage that is reasonable where they come from it is entirely up to you whether you want to pay them the lowest possible amount, or somehow contribute more to their lives. I am really excited about the possibility that my potential success in getting some of the projects I have been meaning to get off the ground by utilising affordable labour will enable me to change that persons life, and I hope I will be successful enough to employ more. The good thing about John Jonas’ programme is that he provides the training for the outsourced worker and so by you giving them the benefit of that training, you are making them more marketable in the future with a higher potential earning power.

So let our conscience decide if we want to pay the lowest wage or change a person’s life. I had loads of CV’s from excellent workers and struggled to get down from the final five to one.

They are all really keen to do the work so it is for them to decide if they don’t want to do it. Firstly – your post is really fantastic! John Reese has been promoting his Outsource Force and all I can see are Internet Marketers promoting it as an affiliate. I understand, every business owner would want “cheap labor”, so to speak. But it only takes a Yaro Starak to properly dissect it. Brave enough to dissect the pros and cons, that is!

Frankly, I made a comment on one of the videos of John Reese – against, of course but never got a reply or comment about it when he gives comments on those that were all “for” it! Anyway, I am a freelance writer and I do get jobs overseas through this outsourcing hype. For third world countries, earning dollars are a welcome treat, that’s why we have many of what we call Overseas Contract Workers. However, perhaps it might not be exploitation, perhaps as what your interviewees said – helping. Financially, yes!

But did you guys ever consider the self-esteem and confidence of that individual working for you? Let’s turn the situation around.

Given that you are Yaro Starak and I am hiring you to work for me. Given your talents and your capabilities, would you consider a $2/hour job? Assuming you are in the Phils. This $2/hour becomes viral! Especially so that there is someone out there promoting it like anything. So you guys won’t settle for anything more than $2 I suppose.

You guys might be helping their pocket, our pocket but you are not helping our self-worth. Why do you think you have the courage of dissecting this issue like this? Because you are a Yaro Starak and because your self-worth is high! If someone like us go out in the open and say these things, do you think somebody will hire us? The probability would be, yes, not impossible but not as much as if you are ok with a $2/hour job! Did you get my drift?

Simply put, a $2 per hour job is not at all fair the way, John Reese thinks it is. If a regular mailman in the US earns a minimum of $7.50/hour. Would’nt an internet marketer still have the “cheap labor” he longs for with say $5/hour job? You still would, right?

That’s $2.50/hour savings, no benefits, no insurance – nothing! That’s an all-in thing! And by the way, if I were you, don’t put your money on organizations when your project profits. Give it directly to your workers – as a form of benefit. They’d appreciate that more. And would you not be happy if you REALLY SEE where your donation/money or whatever went? If I am your worker, I would not mind a free membership in your Mastermind Group.

Your Message Exactly what I was thinking! Give a man a fish, right?

(feed him for a day). Give him/her the tools (knowledge/empowerment) to do their own fishing! (unless you’re rightfully afraid that if you did they would no longer serve greedy fucks like us). Tools such as the free membership mentioned here!And absolutely, treat your overseas outsourced workers you claim are “family” to the massive bonuses and profit-sharing you’d give a family member (you actually respect and love). Give them what they deserve on the fortunes they make happen for you! Or die as spiritually toxic and bloated as your pocket books and bank accounts.

Your Message So great that you’re taking the high ground in contemplating deeply the effects of outsourcing. When I say John Reese’s offering, I was very intrigued (even though I’m not quite ready for it business-wise) but troubled also. So, I’ve conceived of a way to truly empower outsource workers and help them transition into excitement and skills for discovering a realizing their own dream businesses.

I would love to share more about this if you are interested. I think the concept is deeply aligned with your amazingly humanistic, yet practical style of business. Yaro, great post. I would love to get the chance to meet you in person same day and talk about this. My plans are somewhat similar to yours.

I want to some day start or contribute to a non-profit organization that helps train and educate Filipinos to work online in order to better their own lives. My wife and I are already doing this to an extent, with her friends and family (she is Filipina). My perspective on this may be unique.

I am an American who has lived in the Philippines for over a year, working for an outsourcing firm there. I met my wife there, and she was once an outsourced worker who now works with me in the US actually doing the hiring of workers in her home country. The way I look at is there are 3 major price points of wages to consider.

Paying the the outsourced worker the same going rate as in your own country. If you did this, though, there would be no point in outsourcing, since you could just get the same work from someone in your own country, who is more familiar with your culture, language, easier to communicate with, etc. So this price level is the absolute max, but in most cases you would never come close to this. On the other end you could just pay the market wage in the country you are outsourcing to. Basically just try to get the cheapest someone is willing to accept for what you want done. This is a win-win situation since the provider is getting work at a rate they agree too, and you get a low cost solution. From my experience most people who outsource are actually overpaying if you were to consider what local jobs in that country are actually paying.

I personally have met people who work for less than $1/hr. At local companies (not online). My wife worked for around that much during college. However, I think one thing people often overlook in this situation is that even though you are paying the market going wage (even a little more) for the country in question, that does not mean that you are giving them enough money to live anywhere near the lifestyle people in developed nations enjoy and in some cases maybe not even enough to meet what we may consider basic needs. They accept it though because its the best they can do and they may not know that they actually could have a better life. The third price level falls somewhere in between the other two.

This is the price at where the worker can enjoy an equivalent lifestyle as their counterpart in developed nations, but at a still lower wage because cost of living is lower. You would still reap the benefits of cheaper labor, but the worker could for the most part be equal to someone in a developed nation.

This would still be far cheaper than #1 but it would make the worker richer than probably 99% of their countrymen and still be saving you money as compared to hiring in your own country. For me this is the ideal situation. When I outsource, I start my workers at 2. I try to get the best price at first. Once the worker proves they are valuable to me, I slowly raise their rate over time.

I haven’t gotten there yet, but my ultimate goal is to get as many of my workers as possible working at #3 as long as they still at least provide that much value to the business. I know I would be overpaying, but I’m okay with that. By the way, when I mention “basic needs” above, I am talking about it from the perspective of a developed nation. This could be things like a warm shower, flushing toilets, decent access to health care. To many people in 3rd world countries these are luxuries.

So the lower going wage in their country probably will cover what thy consider normal, but you may be surprised with what qualifies as normal for them. They just don’t know what they are missing out on. Its a difference of perspective. When my wife first saw my parents house in the US, a pretty average size house, she said something to the effect of “wow, they live in a mansion”.

Chris – thank you for your two replies. I didn’t address the possibility of paying outsource workers a much larger than average wage in my article, which is something I did want to discuss, and you have covered it as well as I could. I agree with you – start them off at the entry level wage and raise it if they prove a quality worker.

Invest your profits back into the country to help some of them become entrepreneurs as well. Invest back into the country to help raise the standards of what “basic needs” are to on par with what we have. To me, those are noble goals, and attainable if we as entrepreneurs just decide to spend some of our profits this way.

Great post Yaro. The people who are of the opinion that outsourcing is slave labor really need to think about this again. Australia is a relatively wealthy nation (although with the current political shenanigans some would argue that.lol) however, let me use Australia as an example. If I am here in Australia and our avg monthly wage is say 3k a month and someone from a XXX country whose monthly average wage is 30k a month (Remember just an example) then, If they pay me 6k a month for doing what I was doing before, how do you think I would feel knowing that the people who hire me are making 30k a mnth on average?

Well, I suppose that is up to the individual however this is how I would feel. I would be doing damn cartwheels and jumping for joy, that’s how I would feel. Can you imagine how that way above average income would impact my family and my local economy? Some would say, that you are taking away jobs from your country to pay outsources or Outsourcing results in a flow of cash out of your country into another.

Well if my business can not remain open in the first place then whats the point? I would rather outsource which achieves 2 things. It provides another human being with an above average income and 2.

It keeps my business open or even can launch a new one. If people want to then hire staff from there own country to balance things up a bit.

Yaro is right. It is all about Greed. But it all comes down to not the system, but our morals and values as a society. If you are prosperous, then use it for good.

If I had a million dollars sitting on a table, it would sit there for all eternity before IT did anything bad. Money is just an extension of our values. One other little thought popped into my head, If you are of the school of thought that outsourcing is exploitation then as Yaro most brilliantly pointed out. What football team or sports team or sport do you follow? Do you enjoy watching it? Well, if you do. Why support them by watching it and have them getting paid Millions upon millions for it and yet our Nurses, teachers, carers,disabled etc.

Do not get paid enough for what they do. But again, that is just an opinion. There is no right or wrong here. Just good and bad depending on which way you want to go, how you view others and what you want to give back to others. I think you should pay them more but really as a spiritual teacher you are getting close to the core of a deep issue. We have to decide if we want to really help people or just use them to help ourselves.

Someone once said: “Man will prey on man until man prays for man” I think those were very wise words. I do feel it is exploitation to say on the one hand you make thousands but only pay anyone a few hundred a month for full time work. I think the golden rule applies as usual; if you were in that country how would you want to be treated? Put yourself in their shoes, see yourself as them. Many teachers had to face this dilemma.

Check out “Peace Pilgrim” and “Dorthy Day.”. I deal with this issue daily and as I am a Virtual Assistant and am developing my own Virtual Assistant company. The way I see it is that it is a choice.

If you hire me directly to do a job – I will do it, at a premium price. However, before accepting the offer if the option is available I will offer to find an offshore person who can do the same job for half or may less than what I would do it for. At the end of the day you are running a business and you need to do what is right for you and your business. I personally am not materialistic I don’t need the latest ‘things’.

However I do love to have experiences and sometimes getting ahead means finding legal and viable options. Any income I or my business makes, at least 10% if not more, goes back into helping third world Entrepreneurs through Kiva. So yes I am making better profits by outsourcing offshore, but I still give back.

I don’t believe it’s exploitation as people in those countries have just as much choice as we do in the prices they charge and are willing to accept. But I am in the Virtual Assistant industry – I know where to source local and offshore assistant no matter what country your in and I know how to make it work for the client. Dear Yaro, I very much appreciate your willingness to address this complicated issue. I also admire the instinctive integrity that has obviously moved you to think so hard about this, and the intelligence that you’ve applied to it. Thanks, and good on you, mate! It’s with one of your respondents, not with you, that I have a serious quarrel. This is the outsourcer who seems proud to announce that they charge “premium price” while paying minimum price to offshore workers, but then asserts “I don’t believe it’s exploitation as people in those countries have just as much choice as we do in the prices they charge and are willing to accept.” This last statement is utterly false and could only be made by someone who has never lived the grim, often life-threatening daily reality of having to choose between $2 an hour and starvation.

I was listening just yesterday to a report from Afghanistan where just last week (while these posts were being written) a 30-year old father hanged himself out of the soul-breaking anguish and shame of not being able to feed his young family. Seems he was a very silly man. He should have just exercised the same “choice” that we have and started charging premium price for his services.

He should have just said “I’m not accepting less than this! No, not right! In fact dead wrong! The moment this man (and the millions like him) “chooses” to put his prices up, the outsourcers instantaneously choose to flick him off like a speck of dust and employ the next $2-an-hour candidate.

And when the outsourcers dump him for his cheaper competitors, where will this guy do to sell his newly “chosen” premium price services? In his own country, where life is so impoverished that $2 an hour is considered “good money”? That’s not a choice!!!! The reality – the daily lived human reality – is that the level of choice we take for granted in our cash-flushed western economies is beyond the wildest dreams of the majority of humans living on this planet and probably will be all their lives. This is worthy of some heart-felt reflection and serious thinking about fairness and generosity when we venture into the ethically complex territory of outsourcing. Success, and our clamouring appetite for it, can be a blinding thing.

We have come to consider success our God-given right. Maybe in an ideal world it is. But until the real world offers a level playing surface on which that Afghani father can meaningfully ask premium price and live to enjoy the prosperity that flows from it, I think we should regard success as a rare privilege. And I think a good way to start honouring this privilege is to outsource (yes, I advocate outsourcing!) with 2 questions in our mind, not just 1. Question 1 is: “Who is out there charging a low enough price for me to make the profit I want?”. This is the mandatory question. We have to ask it.

It’s intrinsic to any business decision, There’s nothing intrinsically exploitative about this. But there’s an “optional” question 2: “How can I give my outsourced workers a genuine opportunity to enjoy the same level of success and wealth I am wanting for myself?” If we brought to this second question even a tenth of the energy and creativity that we bring on a daily basis to our own business plans and strategies, I think we’d be surprised at what’s possible, how much we can do to help, how much we can positively change – both at the micro and macro level – the lives of struggling people who need our support and compassion so badly, Thanks, Yaro, for taking an honest look at this issue. There is a “dark side” to the outsourcing strategy, the “wham, bam, thankyou ma’am” attitude being promoted so arrogantly right now by some of the internet outsourcing “gurus”. I appreciate your willingness to question and challenge it. Michael – I am open to your feedback and actually welcome it. We live in a world there is a lot of devastation going on, however we also live in a world of opportunity.

There are hundreds of stories if you choose to Google them on people coming from the countries of devastation, where they had nothing and turned their life around and made it better if not profitable. If one of my assistants that I work with offshore put their prices up, which they have, I would not drop them like a hot cake, because it is about a healthy balance between price and quality. I don’t see the point in changing services if I am already receiving a quality product. I also believe that you have made a point with Question 2 “How can I give my outsourced workers a genuine opportunity to enjoy the same level of success and wealth I am wanting for myself?” How I run my business is mostly motivated by this, because at the end of the day who you surround yourself with is who you become. I am all about making a positive difference, my business will only grow as good and as fast as those I work with. If I am helping them grow and succeed the way the want to, in my experience it is returned back to you. My intention was not to be a ‘wham, bam, thank you ma’am’ arrogance that you perceived.

I just believe we all have a choice. Those choices might be limited by knowledge, and circumstances. However it is still a choice. Dear Katey, Thankyou for being so receptive to my comments and so clear in your reply.

I’m left thinking that we bioth agree on far more than we disagree on. I respect and appreciate the foundation on which your business is built: “about making a positive difference”. I hope you and the many people you help will thrive I also want you to know that I did not have you in mind when I talked about the “wham, bam, thankyou ma’am”. That was a more general closing remark about the people brandishing the “$2 an hour” slogan to promote their outsourcing strategies. I’m sure, in the light of your reply, that slogans like that are not motivated by the same spirit that motivates you. I like yours a lot!!!

My best wishes to you. Claims about low hourly wages being unethical almost always assume that things overseas are the same or similar your home country. No, they are different, very different in most cases. I am happy to pay between $320 and $400USD a month to my VA’s in the Philippines and they are happy to work for me. It is a mutually beneficial arrangement that was freely entered into by both parties.

No one is being exploited. Would someone do the same work for the same pay here in the US? Of course not, nor would I expect them to. $320 is an average WEEKLY wage here, but in the Philippines $320 is an excellent MONTHLY wage. Yes, my business benefits from their work and low wage cost. I make a profit.

They have jobs. Everybody wins.

Yaro, you’re right to question whether or not outsourcing is ethical. It’s a very tricky question because we have tho apply our own sensibilities to the question. Of Course everyone should be paid a living, fair wage for their work; but that’s different in every country, and even in different parts of their country. Who decides what is fair or right in some circumstances? Does every one need a flat screen TV? Do they even have TV?

How about a car in a small village with out a gas station? Who are we to say they need these things just because we take them for granted? I’m reminded of a documentary where some “westerners” encountered a tribe of stone-age people (I think in South America) and actually gave the leader a lighter!!!! Those people were, arguably, happier without the influence of these people who “knew what was best for them”. So, yes, you should pay the prevailing wage for the area and then some; but be careful about doing “good” for the people you deal with. Your standards could be to their detriment!

This is silly. The amount of outsourcing done by website owners to the Philippines or India is a mere drop in the ocean compared to outsourcing of many things done in China. Next time you buy something made in China (and many things are these days), think how much the workers are paid there. Does it matter if the outsourcing is done by a large multinational company or an indivudual? And if it is done by a multinational company does that make it more legitimate or is it just that it’s harder to critise a large multinational company, because they have a team of PR people and lawyers when anyone questions this aspect? If you feel strongly about labour rates in overseas countries then make sure you give up most of your electronic goods and other stuff made in China. Excellent Point Jeff.

Here is another point. Person A, goes and gets himself a job and is quite happy to do this for the rest of his life. His main priority in life is to pay off his home and provide for his family in every way. This is very honorable and he should be a proud man. Person B, owns a graphics business and starts to outsource to India or Philippines he pays them well for a job well done and the good profit he makes goes into paying off his home and provide for his family in every way. Except now he can make even more money than the guy who has a job and he can donate money or build another house which puts someone in a job or start up a local charity or he may even hire locally now all of this he could not do before working 9 to 5 ( unless your boss pays you very well).

He is now spending money in HIS own country which provides jobs to people. There are so many for’s and against with this issue and it all comes down to one thing. Are you going to use this opportunity to improve your life AND others? Or are you going to improve your own life and not worry about anyone else. Money has no morals, PEOPLE do.

I recently have hired a part time Filipino worker so I wanted to comment to say that I obviously support the practice of outsourcing. Before I did this I spoke to my Filipino sister-in-law about it and not only did she think it was a great idea but she helped me find some writers. I also want to say that, as a new blogger, I don’t have the money to hire within the U.S.

If I didn’t outsource to the Philippines then I would have to do all the work myself. So in my case the issue of Nationality really isn’t an issue. And, at my day job I didn’t get a raise last year and this year it is a company-wide 2% increase. I know that my efforts result in the company making over 10 times my salary but no one is concerned about paying me based on the gain they get from me. Is this wrong? If you are asking for a ridiculous amount of work and paying low on say Filipino standards then that is one thing. If you are paying a Filipino very well on their standards, they are happy with their pay and very happy to be working with you, is there really a problem?

Thanks for writing this article Yaro. I hire two women in Brisbane on a contract or “as needed” basis which is perfect for them because they’re both mums that spend a lot of time at home looking after their children and could do with the extra cash. I was considering hiring a Philippino with a friend later on the year but did have a icky feeling about it because there was something that didn’t sit quite right with me. I guess everything you mentioned in the article explains why. I also love how you talk about having our “needs met”. It’s so true. Sure having a comfortable lifestyle will help raise a level of happiness, but spending a lifetime finding a way to obtain as much money as possible is not going to bring happiness.

When I think about what brings me joy in my life it’s the stuff that doesn’t cost a lot of money or even any at all – friendships, nature, lovers, food, music, sunshine and of course love. So I’m going to flip around my way of approaching this outsourcing situation from “how much money can I make” to “how much happiness can I bring to my life and to those around me”. Thanks for the insight! I’m sorry I haven’t read the whole post but I wanted to say. I’m not going to run a business for the benefit of my country, it is for my own benefit. I’m sorry if that sounds selfish but it is the way I feel, I find it ludicrous that I should employ people in the country where I live, I’m sorry, I’m not a nationalist and I didn’t choose to be born here. Besides, I intend to live in those countries I employ from.

Even so there are many local companies in the PH and elsewhere taking advantage in exactly the same way. I do agree with fair pay for fair work but I’ve not seen anyone calculate what this is based of PPP (purchasing power parity) on the countries we employ from, which is IMO the fair way to calculate it. I don’t see how anyone could say it is exploiting the worker. Fact is that they willingly do work for less.

No one holds a gun to their head and makes them do it. If they don’t feel they are fairly compensated all they need do is offer their services at whatever price they want to whomever they want. It’s a global market now days. I had a guy from the Philippines who did some graphic work for me. Really cheap. Next time I went back it was a little more, and more after that.

At this point it’s the same for me to hire him as for me to hire someone in the US to do the work. Like any good business person he built his reputation for good work and raised his prices. The fact that he’s in the Philippines was/is incidental. What isn’t incidental is that he does damn good work and people pay him what he says he is worth.

Oh, and resilience is valid reason for what you call the “nationalistic” argument. If you outsource all your expertise in a particular area (like the US is doing with food production and manufacturing), then you had better pray that nothing changes. If trade is interrupted by war, weather, politics, industrial relations, rising fuel prices, or whatever, you will have to be able to make do without those products. There is a case to be made in maintaining some minimal level of local expertise and capability so that a nation can be resilient to adverse external events, at least to some degree.

Firstly congratulations Yaro on a very courageous and well thought out discussion. As the years go by it seems EJ has matured from tactical to strategic and in recent times deeper into philosophical territory.

Beneath this I sense your own personal growth coming through in spades. The inequity in Outsourcing has troubled me, which perhaps goes some way to explaining my checkered success with it. Since your business is largely product based I imagine there is minimal back lash from your customers if they are aware the your product has an outsourced labour component.

With my income being largely service based an additional dilemma for me has been disclosure. If a overseas VA helps me with the admin of my business am I obliged to discolse? If a overseas graphic designer does one component of a project for my client should I disclose? If I create a product that helps small businesses should I disclose that graphic design was done in Brazil and sub-editing was done in the Phillipines? Would any of the Australian businesses I have spent money with in the last four years not have taken my money if they knew it came from US, UK, or other overseas countries? Probably not.

Like you said a heck of a lot of gray and it comes down to what you know is right in your own heart. What sits comfortably in your own conscience. $2 an hour, well I guess that is a dollar more than Nike pays its workers in Vietnam. I have been outsourcing for a long time and not just to the Philippines. I have had people working for me from the USA, India, South Africa and Australia. I generally have small jobs that need doing as opposed to wanting a full time worker.

I am such a fan of outsourcing that I have even outsorced myself and spend my life travelling and living in cheaper countries (Greetings from Thailand 🙂 I do feel $2 an hour is low though, there is a morality thing going on in my head. I generally pay around $3 an hour, I’m happy, I think that the people who work for me are happy. I suppose that I could pay them more, but why pay someone the same wage as a doctor?

PS Does this mean that all your posts about outsourcing are coming to an end? They were becoming very repetitive. I understanding you promoting something, but feel that you over promoted this one to death! Very thought-provoking stuff here, Yaro. Right now, I can’t even afford the $300/month outsourced laborer. Soon though, I do plan on hiring one or two to help me grow my business. My big plan, however, is that once my business grows, those that helped me make it grow will also benefit.

Western companies often give bonuses to top-performing employees. Why can’t we, as internet marketers, do the same to outsourced workers? The problem I have with the $2/hour outsourcing is when your business grows and you add more cheap labor without doing anything to help those who made the growth possible.

That is exploitation. Those employees that did a good job for you will not leave you because they can’t. So you will keep riding them at bottom-rate. Nope, that doesn’t work for me. Help those who help you. If you grow, your teammates grow. That’s how we can improve the global economy.

This is the first time in my entire life that I am commenting on a blog post. I don’t think it’s a high leverage activity for me, but I just feel the need to do it this once because of the seriousness and importance of this article. Another possible consequence that was untouched in the article. It’s already the case that outsourced jobs in countries like the Philippines pay more than local jobs. After browsing through resumes from the Philippines I saw many people who studied to be a Nurses, but are now looking for better paying work as article writers and VAs.

On the micro level this seems great, but on the macro level, if the trend of outsourcing continues to grow( I fully expect it will), we are affecting the distribution of human resources and work within the country. It’s probably impossible to predict the actual effects positive, or negative, but be aware that there are consequences.

You outsource someone to be your VA and because of that you help them earn a good salary, feed their family and have a better life. Because of that you potentially take away a teacher from a school, or reduce the quality of care in a hospital. My stand is not against outsourcing. I think it’s a great opportunity. But do it to create good. Take the time to analyze your motives, and to think of how you might be affecting others.

In your plan for success, make sure to devise specific actions to negative fallouts and increase positive. Take steps to leave a positive mark where you are outsourcing. Like Yaro said, donating back a portion of your profits to local causes for example.

Cheers and happy living 🙂. Second lifetime blog comment! Yaro, I have a counter proposition to you “don’t be greedy” solution. Don’t be greedy! Be selfish instead. I’m a selfish selfish man. Pretty much everything I do is aimed at making me feel good!

Nothing else matters to me really. It’s the only true thing. I spend time with my daughter because I feel good when she smiles and I think she’s smiling because of me.

I am nice to my friends because it makes me feel good and I know that they will be nice to me in return. Making me feel good. I will be donating back to communities where I will outsource, because it will make me feel good about myself. Knowing that if I am used as a model by others, and others emulate my actions, that the world will be a better place ( based on my standards ) makes me feel good. Much better than having a few bits of “money” in a database somewhere. I want to feel good about myself.

I want believe I am making a positive difference in peoples lives( Cuz it makes me feel good ). Learning to focus less on what you can have and more on what you can feel ( good in this case ), is pretty powerful I think. Having stuff can be great, but only when used properly to make you feel good.

I think that’s all I have to say about that. Cheers, Yann. Hi Yaro, One of the points you raised was that increased outsourcing will increase the cost to outsource to that country, due to supply and demand. This happened in India. Several years ago you could outsource there for $2 per hour.

But I recently got a quote for web design from an Indian company, and whilst they are still a lot cheaper than an equivalent UK or US company, it’s certainly not in the $2 per hour range. It was about half the cost, from which you can still make a profit of course. But what you get in India now is a good reputation for quality work. People generally trust in the quality. I don’t think the Philippines is quite at that stage yet, but they will be soon, and once they are the prices and therefore wages will go up.

Nice post, super controvertial sure to create a buzz like it already has!! Me personally, I’m an economist. I look at everything in supply and demand. Outsourcing is no differernt except your working within a global economy.

The global supply of developers is at a level where the price point is that a certain standard of living is obtained for your skill set. The supply for ‘the best golfer in the world’ is 1. Thus his price point is $100m. The supply for teachers and nurses is many, thus lower price point.

And the fact that you should be paid relative to the rewards reaped is a load of crap. Anyone working in a bank can vouch for this. Yes they may make $100k per yr but the bank profits in the billions. If that were true, a cleaner in a bank should earn $1m per year, and is drastically underpaid while the apprentice of a plumber is paid correctly beacuse the profits of a plumber are lower. If u start paying Filipeonoa $50k per year – why would u hire them?

Y wouldn’t u hire someone locally. The fact is, outsourcing exists because of a discrepency in supply and demand. You can’t mess wit supply and demand! Hello Yaro, Thanks for this thoughtful article. It’s nice to know that someone cares to think about this issue before blindly subscribing to it.

Coming from the Philippines and having worked for outsourcing firms for most of my career, my view on this is somewhat similar to the others’ comments: if Filipinos received salaries at par with yours, why even hire them? From my point of view (not to say that I speak for my countrymen) outsourcing has been a boon that allowed us to enjoy salaries that allow us to live comfortably in our country — “in our country” being the operative term.

Had it not been for these outsourcing jobs, we would be forced to emigrate to other countries (yes, Australia included, as many have actually done) so that we would earn wages corresponding to our skill — our local economy simply isn’t big and dynamic enough to sustain the kind of money needed for what we consider a decent lifestyle. Even as I speak however, many of my countrymen seek IT jobs outside the country — Singapore, specifically — to enjoy wages they deem fit for their level of skill. The reason outsourcing becomes important is if and when we don’t want to go abroad. Working overseas tends to separate families, with children growing in the care of their grandparents while their parents work elsewhere. With outsourcing, decent wages mean that we can earn USD10,000 a year which allows a single person to live decently in a small rented condo, and up to USD30,000 a year — which allows for a nice apartment, a car and good schooling for a small family of 4, all while staying *in* Manila. Of course all of these are within the parameters/assumption of a 40-45 hour workweek.

Anything beyond that, in my book, will be exploitation, and four decades worth of project management anecdotes warns you about the evils brought about by burnt out, unhappy workers. Also, not everything of value can be monetized, and valuable experience in IT or other fields can sometimes only be found via outsourcing jobs. It’s all about balance, and it’s nice to find out that there are foreign employers for us Filipinos who do seek that balance and care about our rights. Why all the hand wringing over this?

A fair exchange between willing parties where there is no intent of exploitation and a fair bargain is struck seems fair enough to me. I outsource lots of things and my approach is to match the most appropriate resource for the task at hand. Wherever it is best done, is where it gets done. In-house, outsource, local, wherever; surely the establishment of any arbitrary demarcation line is artifice. Anyone or any business can and should seek to deploy the right resources for the project at hand.

If that involves engaging a high end designer in NY, a developer in Romania, a content writer from the Philippines, or a dude from my hood, so be it. I see no ethical issue present with outsourcing, if and only if, it is done fairly with the right intent, and the bargain so struck, sits well with the agents involved. This assumes of course that the agents are informed and capable of understanding the arrangements. Ultimately, equity must be present for anything to be sustainable, including outsourcing. However, as someone who has a full time person employed in the Philippines, PH friends and family connections here in Australia, I confess I felt very uneasy with the recent Outsource Force launch, including the torrent of supporting affiliates.

I kind of hoped they didn’t see it in the PH but not for the reason you might be thinking. I hope they don’t think everyone involved in IM/ecommerce likes to pose in front of their mansions and tool around in racing cars whilst suggesting we’ll all be rich if we’d just get a fleet of these ‘cheap as chips’ $2/hr PH workers. Puke worthy images of conspicuous consumption, supposedly attractive symbols of success, seemingly built, at least in part through the efforts of $2/hr workers in the PH, are sure to provoke objections and some gnashing of teeth as we have seen this past week.

With that sort of objectionable messaging, I’m not surprised people are uncomfortable with the whole PH outsourcing idea, which is a shame, as I believe much good can be gained there through a mutually beneficial exchange. In conclusion, I say that it’s the unseemly promotion of $2/hour outsourcing that’s the issue causing the disquiet, and justifiably so. If you or someone like you gets the job it’s employment, when someone not like you gets the job its exploitation. The exploitation argument is a move backward toward racism and chauvinism.

If you say that people from other countries should receive the same wage as in the entrepreneurs host country or none at all the answer will clearly be none at all. The entrepreneur is worse off, the potential employee who didn’t get the job is worse off, and most importantly of all the consumer who doesn’t get the best service for the best price is worse off. Hi Yaro, I really like your stand in this issue of outsourcing and exploitation. As an online Filipino freelancer, I am glad that someone is brave enough to take up such a taboo topic and write an article about it. Yes, I am a Filipino online freelancer and my employers are Americans. I am one of those people in third world countries people in first world countries outsource to. I have been in the business for two years now and honestly, I am devastated with the view a lot of outsourcers have taken on this topic lately.

Luckily, my employers feel otherwise. When I started in online work two years ago, the minimum rate one can get is $2/hr. That rate is given to someone who just started out with freelancing.

You can expect that these people have a very limited knowledge in online work. Simply put, the $2/hr rate is given to data entry – simple copy and paste work. Nowadays, people trying to outsource their work are offering $2/hr for Filipinos to do SEO, writing, even web design and programming! If you ask for a higher rate, they think you are EXPENSIVE. What started the trend of paying $2/hr for online work, in my opinion, are these big name internet marketers who suggested that that rate is the standard. And since these people are considered the authority on the topic, naturally their subscribers think they are right without even verifying if what they’re saying is the norm or the exception. And because this is what is being said in these outsourcing courses, people taking the course will take what is being said as gospel truth.

The saddest part of this story is that Filipino online workers agree to these rates. Do they agree because they are happy with the wage they’re getting?

It may seem so. But truth be told, $300/month is barely a livable wage in our country, especially with the dollar-peso exchange rate going down. When I started 2 years ago, $1=P48.00. Now, $1=P43.00. But, Filipinos accept this rate anyway.

Because they simply have no choice. Nobody will hire them if they ask for a higher rate. It has been said, and even you mentioned it in your article, that $300/month is above the minimum wage in our country. But it also has to be mentioned that the minimum wage is given to blue-collar workers in the Philippines. These online workers we are talking about are college-educated individuals and if hired for a physical job, they will be white-collar workers whose wages will be higher than that of the minimum.

Plus, you have to take into consideration the fact that online workers have to pay for their internet connection, buy their own desktops/laptops, in order to perform online work. So why do Filipinos accept $300/month without batting an eyelash?

The absence of a choice has been mentioned above. Another reason is that by nature, Filipinos are optimistic people. They take the pay in the hopes that when they show their employers what they can do, they will be offered a higher wage.

There are happy endings, but there are also a lot of giving ups and moving ons, and even more “Just suck it up and plaster a smile on your face. Don’t complain, at least you have a job!” going on.

Another reason a Filipino will take that wage is that they will compensate it by getting another online work on the side. They will work full-time for you and work full-time for someone else. They need to work longer hours than necessary. They wake up very early and sleep very late just to cater to all their clients. Inevitably, some of their output is compromised. I work for an outsourcing site and my employers are advocates of paying online freelancers a fair wage. They even asked me to do research and write an article on our site’s blog about the right rate to give a Filipino online worker.

Here’s a link to my article:. If you notice, the only online work where I recommend a wage lower than $500/month is data entry. Other than that, $500/month and above is the reasonable rate.

I didn’t take these figures out of thin air, I did considerable research in order to arrive to these rates. Anyways, I apologize for my very long comment. I just hope that a lot of people get to read your article and seriously think twice about offering $300/month and lower when hiring online workers. Best regards, Honey. Honey, thank you very much for spitting that out. I have been a VA for 2 years now, and the long hours is really taking a toll me– really. I started up as a VA for an internet marketer at $2/hr.

I endured extremely long hours not to mention 2 book publications and a number of ebook under my name. After a year, I tried to quit because I felt exploited and got a.50 raise because of that. I quit again but this time, I made sure I will not be coaxed again. The good news???

I got myself another employer who I sidelined before as an SEO writer. I am now earning $400 plus perks. I know I should learn not to settle as Filipinos, we are so good at settling and extremely so bad with negotiations. 🙁 We do have a choice. We have a choice between settling for 2/hr or negotiating for better rates. There’s absolutely nothing wrong with outsourcing overseas.

People can complain all they want about exploitation, but without actual research to back up those claims, it reeks of ignorance on their part. People in countries like the Philippines have a lower average standard of living (in terms of money) so if you’re paying them fair wages for their work, you’re doing absolutely nothing wrong. You’re providing someone with a means of earning an income through honest work. The only difference is you’ve found a method that allows you to use their resources at a lesser rate. The quality of their work is the same, it’s just got a different price tag. Big business has been doing this for years – making products in China and selling them at American consumer value. Great piece Yaro as someone who outsources overseas as well, I often struggle with that little niggling feeling you have as well.

But as an entrepreneur trying to make a better life for my family, right now outsourcing over seas just makes sense for me fiscally. Does that mean I never hire someone in the U.S.? Of course not. But there are some projects that I can outsource comfortably here and some that I can outsource more comfortably there. In the end it boils down to what works best for my business. But I certainly like your idea of giving back in someway, so I’ll definitely be looking into doing that on future projects.

Yaro, Your statement that “outsourcing results in a flow of cash out of your country into another” isn’t true. Think about it: if your website and your internet activities earn a positive return (meaning the incremental income from projects done by your team of outsourced help exceeds the incremental costs of your team), then you are actually attracting cash and wealth to your country. Don’t use zero sum thinking! The incremental income benefits everybody, including the economy in Australia. Dan Casual Kitchen. Hi Yaro and Readers, #1 I think those here who think its slave labour, do not understand it. I talk to my outsource employee on exactly this as it is important to understand and support your team.

As well have interviewed hundreds in the Philippines. I learn that often its not about money, its about finding a job that pays. For many jobs are a scarcity.

#2 Most people dont hire to put money in there pocket only, thats short sighted, very. You would do it to grow your business and hire more people local and outsourced. However when you start, affording a outsource employee not cheap. If you make $80,000 a year which is a good salary and you had to hire someone local and its costed you $30,000 compared to $3600.

You would choose the latter as its a reduced risk when giving up a chunk of your profits #3 People think its making money of there sweat. This is a massive misconception, since you are not taking into considering that 99 out of 100 people in first world countries will lose money on there online ventures. And the 1 thats left will work for less then a outsource salary in the first to get to the point of making money from outsourcing. #4 Relationships, treating people with respect and like they are your family. This is a MUST in outsourcing. I agree with you completely that you need to give back and take care of them.

Example we donated $40 for each employee last year when they had the earth quakes. Ask how there family is and honestly $40 goes a very long way there, but is not much for people here. #5 I was in India last year and like you said, cost of outsourcing is going up and up.

However more people are throwing money to India. They are taking this money now and instead of just working in call centers, they are building the infrastructure to other things (refer to The World Is Flat as this is a huge topic). Treat your team like your family.

Wow, that was a lotI could go on 🙂 Cheers, Mukul. I see no problem with outsourcing. I have a need. Somebody in the Philippines (or elsewhere) is willing to fulfill that need at a set price. That price happens to be a better wage than anybody locally would be willing to pay them, they have the status of having a good job, and I award bonuses for work well done. My business grows as a result of their labor. This is no different than local employers.

If I hired somebody locally, I would spend a lot more money and would probably not be paying the person more than they could make elsewhere locally. My business grows, but nobody states that I need to start paying the local person more as a result of my business growing past the normal raises. If I grow from a $50k to $250k to multi-million dollar company, I’m not going to pay a customer service rep $300k to answer a phone.

This is a win-win situation. The outsourced worker has a job and is paid well for his standard of living and local economy. Money flows from a nation with money to one without, as the local worker pays taxes directly to the government and indirectly through distributing money in the local economy. The business owner gets more work done than they could working alone or being forced to hire locally. The business grows. More money is raised locally and paid to the local government in taxes.

The business owner’s standard of living increases, which will probably lead to more consumptive spending, also flowing money into the local economy and government. If everybody’s standard of living improves as a result of outsourcing, and everybody is happy with the arrangement, then where is the problem? Obviously, if I was exploiting somebody and paying a low-standard of living wage or was asking for somebody to do work that demeaned them or led to health problems or forced somebody to overwork, then I’d be exploiting them. However, that’s not the issue at question here. On a personal level, I put 5% of my gross income towards charitable causes in my local area at a minimum every year. Once I have more working capital I’d like to increase that to 10%. I could certainly see the value in donating to the countries I might outsource to as well, but there’s plenty of need and causes I believe in locally and I’d rather put the money where I can see it doing the most good.

Hopefully my charitable philosophies are evident to my employees as well and they can also donate their spare time and money in their own communities, but that’s up to them. I don’t blame you for writing about this Yaro.

I imagine some people have had a go at you or others close to you for outsourcing to the Philippines. What those people need to remember is we are helping real people with families make a better life for themselves by giving them work or extra work. That’s the big picture here. If everyone stopped doing it then what would happen? How many banks do you see these days using Indian call centres as a way of saving money?

I don’t know about you guys but every time I call the bank it’s an Indian and I have no objection to it. Everybody needs money to survive and how it’s shared around should not offend people. Food for thought and just to end.

Yaro you sent me a link to an interview you did with a certain guru who gave away quite a few decent tips he uses and one of them was outsourcing to the Philippines. I used his tip and found a great guy there and he’s done some really great articles for me and helped my website climb the ranks and in return I’ve helped him and his family achieve a better income.

It was his daughter’s birthday recently and he thanked me for the extra work I’d given him because he was able to throw a nice party for his daughter. That’s the big picture here guys and nothing else. Your Message Hi Yaro I think that paying someone 2 Dlrs and hour is exploytation of the human race. If you want quality you will have to pay for it. Quantity doesn’t equal Quality. If you feel that that is the way to go due to the economic system today you may need to evaluatate again as quantity will not last quality will last as the say we get what we pay for.

Why not check to see if you have someone who can give you the quality as well be able to multitask were you still have a good quality product and you also a able to supply the needs of a family who just wants to be able to survive in todays world. If you are a spiritual person seek God first as ask for guidance as to what and where you should go with this matter whereas everyone can be a winner PS your info in very good I am learning a lot from your wisdom in learning how to use the internet for good of others and to create a residual income for the future. All the best Ro. Hi Yaro, Thank you for your article. I think this will be a good opportunity to voice out my frustration to some employers.

$300 is not a fair wage for a full time work in the Philippines. John Jonas is not being fair to us Filipino Freelancers. If you will make the computation, $300 x 43 = 12,900. Less our monthly office expenses. Internet connection 2,000, Electricity 1,000, Office supplies 500, Miscellaneous for times when we have to work outside on a coffee shop 500. That’s 4,000.

What is left of our salary? Oh and before I forget, we also get charged for the paypal fees, roughly around P250.

The point here is, John Jonas of Replace Myself and others are being unfair by making general statements that $300 is a big compensation for Filipinos. It simply is not true. Interesting perspective, Yaro. K53 Learners Licence Test Papers Download. As an newbie Internet marketer and blogger, I am seeking to find a way to balance my need for good and cost-effective business relationships and services, with the need to not exploit persons in a developing country.

This is an issue that we are all going to need to address, and you are correct that the issue here is really about GREED. I know that I have so much more than many in these still-developing countries, and our current economic situation in the United States is a reminder as to how GREED can undermine and destroy the lives of many innocent people.

That’s a very good question Demian, and I expect it comes down to personality types, limiting beliefs and access to resources. Some people need cash today and don’t have the resources to start their own company, hence they need work and cash flow now so are willing to help grow another person’s business. Some want experience working for others before feeling that they can go out there and do it themselves. Some are just plain scared. Given enough time, education and effort, and a desire to be an entrepreneur, and I believe anyone can do it. Yaro, I love what you say in this articleif you can give back to the country you outsource from, that would be making the extra money work for everyone.

I’m from India, living in the US for the past 2 years. I have seen how outsourcing has made India’s economy grow in leaps and boundsand better the lifestyles of so many poeple. Having said that, I also believe that God didn’t make the physical boundaries whereby we ourselves as Australia, India and China. Man did Helping humanity anywhere should be the driver. We’re all a part of the same creation, how does it matter if someone lives in Thailand and someone in Uruguay?

We didn’t choose our geographical location; we were just born there. If we have a world view of humanity, our beliefs will come from a place of abundance, not scarcity. In a universe where there’s plenty for all, let those who have more share with those that don’t.

It could be money, or time or spirit. Because whatever you give WILL return to you a hundredfold. I’m an US citizen, and I live in Lima, Peru.

My husband is Peruvian, and drives a taxi 10-12 hours a day to earn about $20. If his English was better, he’d be THRILLED to sit at a computer and write articles all day for the same money. The world is getting smaller, and we’re already moving to a global economy, so I feel like the “keep the money here” mentality is really a moot point. I don’t outsource yet – but when the time comes, I’ll be happy to pay someone a wage that allows them a decent life in their own country. Better a hand up than a hand out, no?

This is a great post Yaro, as well as a lot of well thought out and varied comments. I have recently taken on 2 VAs from the Phillipines, and feel that I have been lucky in having found some great workers who work hard and are willing to learn.

I started them at a low rate until I found out whether they would be a good fit. They are, so I have raised their rate and I will continue to reward them financially as time goes by because of their dedication and effort. They make it possible for me to concentrate on creating product while they do posting, articles, link building and more. I would not be able to afford to do this in my local economy, so they will help me evolve in a quicker manner. They will also benefit from being employed and receiving training that makes them more marketable. They are excellent workers and as nice as anyone I have ever met.

They have both asked to have other members of their families become involved in the business, so it seems as if it is a good fit for both parties. I enjoyed hearing the comments from some of the workers from the Phillipines, so that I get to hear what their feelings are on all of this. Your Message Yaro, my view is that’s it’s not a question of exploitation – it’s about right thinking and right action. We humans are evolving at an increasing rate due to a number of factors, including the general rate of change in science, education and spirit.

Our ‘ancients’, who worshiped the sun and stars did so from an Earth centric viewpoint – one that existed for over a million years. Mankind slowly evolved through famly centric, tribal centric, state centric, and are in the midst of the range from nation centric to world centric to kosmic centric. The bigger the frame of reference the less one would see it as exploitation as it is supporting the quality of life of poorer segments of the Kosmos, helping their ability to evolve and close the gap between them and richer segments. Today it’s the Phillipines and eastern Europe – tomorrow they will be producing other products and services – and Africa may take their place. Buying poorer segents’ services gives them the resources to evolve.

How would this help African nations in the next wave. Will it promote increased education and therefore people’s expectations. With education and expectations comes more stable government (I am generalising here), the ability to put more resources into health, infrastructure, etc. In a Kosmic sense, we are making a relative greater contribution to mankind than if we were to outsource only to our own advanced countries. As a new blogger and internet business person, one may not be able to afford “local” rates, so outsourcing to poorer nations helps get the business going faster and more effectively. Is this not just the global village that multinational companies regularly use in quite sophisticated ways. Resources will flow to the lowest cost supplier.

It’s natural. On the other hand, once a business is established and making high profits, there are i/net business people who do create their own local teams because they can afford it and prefer local contact/communication advantages. It becomes a choice. Where it becomes exploitation is, as far as I can see, only when one pays less than a fair market rate in that country. If one makes super profits, right thinking and action would indicate sharing more with those who helped create it and give more to charities or family/friends who need help. Money is only valuable in terms of what it can provide to support mankind. Although there are exceptions, on the whole, I suggest most people who make large amounts of money, whether on the internet or otherwise, do make greater contributions to the community – whether that is by donations to worthy causes or reinvesting in creating new or growing existing businesses – and continue the evolving cycle.

I’m new to Internet marketing, blogging, etc., and just came across your site last night. I have to say that with all that I’m reading online in my learning curve, you are a breath of fresh air. I’m finding that integrity, gut honesty, and morality don’t seen to be at the top of most Internet marketers priority list. You’ve restored some hope for me, that maybe I CAN do this business and continue being an honest moral person. Your post comes through loud and clear.

Your writing is wonderful, well organized, from your heart, and you even seem to understand grammar, punctuation, and other nice language touches! And I really appreciate being shown the other side of outsourcing, as I’ve been reading and hearing a lot about it recently but hadn’t heard anyone dissect it as you have. Truly I’d only heard about how it’s a great cheap way to get your grunt work done.

Many thanks for your post. I’m your newest fan. I am of two minds of this: I do feel on some level it is unfair. Why should they work for pennies when you profit handsomely? It is much the same raw deal as the corporate structure in the US. Why should I work for big company X for $15 an hour 60 hours a week while the CEO makes tens of millions of dollars?

Is it really fair? If you help build a profitable enterprise shouldn’t you share in the wealth on some level? On the other hand, I have been to Panama, the Philipines, and Buenos Ares and the cost of living is incredibly cheap.

From what I make online I could live like a millionaire their, so I can understand why the pay level is very low. 2 us dollars go much further their than in the US itself.

I could write a 5 pg post on this, but I will leave it their. Your points are all very good Yaro. Outsourcing does not exploit the workers you hire in another country. For them it is a godsend. It exploits the workers you choose not to hire in your own country because of their inability to compete. The idea that the “best worker gets the job” is a lie.

A graphic artist in the United States may charge $50 per hour, while someone in a 3rd world nation would charge $5 per hour. How much better would that American artist have to be to justify his fee?

He would have to be virtually super-human! But that seemingly exorbitant fee is barely enough to make a living where he lives. Most contractors don’t work full-time so that artist would be lucky to make $50,000 per year.

That’s chump change. He can’t buy a house on that salary. He can’t afford a new car unless he wants to go deep into debt. He can’t save for retirement. The most he can aspire to is to rent an apartment somewhere and pray each month that he can get enough gigs to keep paying the rent. Meanwhile, fifty years earlier, his grandparents (who worked as unskilled laborers) were able to purchase a home with ten acres of land, buy a brand new car every two years, save for retirement, raise six children, and live (for lack of a better term) “The American Dream” (which is basically the same for all first world nations). Make no mistake.

The dream is dying. It is such a fragile thing, and we have taken it for granted. Just because we happen to have been born into a wealthy nation does not mean things will stay that way forever. It has to be zealously protected. From an objective humanitarian viewpoint outsourcing and the global economy is a good thing, because it will eventually level the playing field between nations. But that does not mean that all nations will be elevated to the level of the highest among us. No, it means those at the top will be lowered as the ones at the bottom are lifted, until at some point they meet in the middle.

And that can be a painful transition for those who will be moving downward. Your Message For the price of John Reese’s outsource force, anyone can fly to the Philippines and find someone there themselves and still have change left.

I thought it was a ludicrous amount to ask for – an ‘exploitation’ I suppose of another form. I used to live in Hong Kong where a full time live in Filipino maid was US$450-500 a month. This enabled many families to have a double income whilst the maid did all the house work and child care.

It shocked me when interviewing some of these women that a lot of them were qualified nurses, teachers, many with university degrees, but they just could not find decent paying work at home. A primary school teacher would earn 1/3 what she would be paid in Hong Kong as a maid. So they leave their families and go abroad. By contract, it will be two years before they see their families again. It is far from ideal and in fact, our very own maid went back after five years because her son needed her.

He was the same age as my daughter. So back to the question: here are my two pennies worth – Good points: – They are working in their own country and do not need to be separated from their families.

– It is decent work – It carries some sort of ‘prestige’ to work for a foreign company whether you are one or not. Bad points: – Honestly, $300/month is just ok, not great even by their standards. – “Them” and “Us” factor. I just wish these IM ‘gurus’ would stop talking about them like some sort of pet, and bragging about all the money they make off their backs. The idea is that they can be discarded at anytime you want, whilst you reap in the profits hand over fist. Yes, you can argue the countries are different and all that, but the bottom line is they are people too with families and dreams and they should be treated respectfully.

I just find it ironic that the main selling line for all the IM products is so that you can be free from your horrible daily job, fire your boss, forget 9-5, be your own boss and then we go and employ someone to do exactly what we loathed, and treat them the way we all hated so much. So do it because it helps you and it helps them, but do it ethically and with a bit of compassion.

It should be a partnership of sorts, not you taking all the profits, laughing all the way to the bank whilst they are just some sort of tool in your tool box that can discarded any time. Some people on digitalpoint and freelancing site pay very low amount. I did wordpress theme and editing just for 25$ and that guy forced me to work for more than 1 week. Outsourcing is good for some people as they can take advantage of many people who need money.

I’m doing it cause i need money and with limited internet and time i’ve no other choice than working for the cost they offer. I’m trying to make money with my blog and some freelancing and with competition i’ve no other choice than accepting these hectic and unfair jobs.This is another side of the story which many people who do outsourcing without knowing their requirements needs to know. Thanks yaro for this post, this post will slow down some rational bloggers and marketers who take advantage of others with lower rate.

This was a good thought provoking article, although it hit me on two sides. My job in IT was outsourced to India where they are paying 2 or more people for the salary I was making here in the United States. So I guess the word outsourcing is relative. On the other side of things, I have outsourced jobs and continuing work to the Philippines for my websites and paid the worker what they asked for.

Most of those who did work for my websites did a good job and received a bonus, and were appreciative of the bonus. So I guess if someone says they can work for $X, they are the ones setting the rates, not us. Great article. It is very easy for entrepreneurs and anyone else to rationalise to themselves that paying someone $2 an hour is better than that person being unemployed and not earning anything. I don’t think that argument is so clear cut. At the end it comes down to a moral choice for the person hiring. I grew up in South Africa and I heard the rationale often that paying a human being who lives in a shanty town a few bucks is a lot for their circumstances.

Well, rationally that my be true – but do I want to keep a person in tough circumstances if I can easily help them live a better life? Doing the right thing here requires some soul searching, thanks Yaro for doing a bit of that in this post.

What is a fair international minimum wage? Suggestions for a standard? One last thing – by putting a percentage of profit to a charitable cause may help someone, but it is unlikely to benefit the person who is hopefully doing their best to lift your business to a new level. Why not give it to that person in the form of a job or monthly bonus? I think it is a way around really tackling and resolving the issue of fair pay between you and another human being done good work for you.

This is a fine article written by a concerned and passionate person! Your pragmatic business decisions do not counter your compassion for others. Should someone believe that outsourcing is unethical and decide not to do such a thing then all would suffer.

The person doing business (because the business would suffer), the people being reached out to (because they wouldn’t be getting what they want) and the virtual assistants who are happy making more income than their peers (because they wouldn’t have an income). One of the people who commented is determined that you have created a ‘win, win’ situation. And you have!!

And all will prosper! Having personally visited our outsource staff in the Philippines, my thoughts are these: 1. We were surprised to learn that the members of our outsource team were by no means poor in their society, but REALLY doing well upper middle class Filipinos. Even $2 an hour is more than a LOT of working class Filipinos make. Not saying this is right or wrong, just observing. Reality is that if they weren’t working for you, they’d be working for someone else at a similar rate, probably not with the ability to work from home, possibly in far worse working conditions.

If you really care about Filipinos wouldn’t you rather have them working for you in an environment that you control rather than out there in the big bad unforgiving Filipino work force? The issues that people in certain countries earn far less than others, have currencies valued lower than others, labor standards lower than others, levels of poverty higher than others are REAL issues, that are extremely important and are a result of far more, and far more complicated factors than who we as small online business owners choose as our virtual team members.

I’m a Filipino and in my opinion outsourcing per se is not exploitation as long as it’s win-win for both parties. I’m working as an intern under a famous guru. Since I can’t afford to pay for his personal coaching, I offered my link building services to him. I need him more than he needs my services. He in fact generously gave me $5/hr when I was starting and after 6 months, he increased it to $7/hr. I find the $2/hr line of John Reese ridiculous.

Some Filipinos may accept that because they don’t have a choice. Surely they’re not happy. That I think is exploitation! He also mentioned that one of the good reasons to outsource to the Philippines is because Filipinos are not entrepreneurial. While that may be true for many people, I think it’s exploitation if you promote a system that perpetuates that kind of situation. A better way, I think, is to help your Filipino workers shift from employee to entrepreneur just like yourself.

I am a Filipino VA; and I am proud to be an online freelancer. Been in this business for four years. $2/hour is indeed exploitation for Filipinos like me whose skills, education and training are at par with my foreign colleagues. Just because I am a Filipino, I am ok with being paid at such ridiculously low wage!

My Australian employer is happy to pay me $20/hr. I started at $15. And I accept fixed projects at the same hourly rate. Latitude D400 Video Driver Windows 7. My clients don’t complain because of the quality of my work. If you want to pay cheap labor of $2/hour, expect the same amount of quality of work from your contractors. If you are willing to build up your team, not exploit them and pay what is due them, you will get quality work from them. Why should I settle for $2, or even $5, when I know I am worth more?

Part of my own income is as a freelancer. I took one of those low dollar per article jobs recently just to see what it was like. It was regimented, highly automated, and in this particular case the instructions did not even make sense as I was to write on the subject of a holiday in a location that didn’t even necessarily celebrate that holiday. I felt exactly like a slave, and I bowed out of the job in a day–the only freelance job I’ve ever given up on.

If that’s how we treat people we hire from the Philippines or India, then God help us. Outsource to a developing country if you must, but make sure that you treat your employees with respect, dignity, and reasonable assignments. Otherwise, be prepared to be called the Ugly American or the Ugly Australian, a term that may be well deserved. There are 2 issues that I have with outsourcing.

First, when the jobs move out of the country, the economy suffers and your potential clients “tighten up”, so in some ways it is a long and slow way to shoot yourself in the foot. But, I guess if you’ve banked your millions along the way it doesn’t matter. Secondly, I see a lot of people are recommending outsourcing all the things that I actually like to do for my sites — theme development, writing, etc. I suppose that is fine if all you want to do is make money. But I kind of like doing these things myself. If you want to be a blogger but don’t like to write what’s up with that? However, the flip side to this is that it does help (in a small way) the economy of a country that needs help.

I like Yaro’s idea of investing back into the country to help build it up — things like micro loans and education will help a lot. “Why is my time worth $500 for 30 minutes and someone in the Philippines worth $300 a MONTH? You might claim that my time is more valuable because of my knowledge and position.

It’s the same argument as to why a CEO of a company gets paid so much more than a mail boy in that same company.” But it would be a pretty poor argument. It would assume that your time’s value is determined by skill whereas the value of someone else’s time should be based on location. If you moved to the Philippines, would your time suddenly be worth $300 per month because of location, or would you still base it on the value you feel you provide to a client? If someone living there now had comparable skills and experience, should they feel forced to charge significantly less than you just because of location? If they wanted to move to Australia or the US or the UK, would their time magically be worth as much as yours to clients? I think those are fair questions.

The we place different criteria on our own value versus that of others is the moment I think we risk crossing that line from simply outsourcing to exploitation and professional disrespect. Just my $.02 as a freelance service provider who values her time highly as well as someone who regularly outsources (both to those in western countries and elsewhere). But if you now say the location of the buyer is also relevant, then aren’t you saying that those buyers in the west should be charged more than if a writer in a 3rd world country were selling to local buyers? What you essentially just said is that if you were living in Thailand with a much lower cost of living, you could still charge $500 for 30 minutes of your time if you used that magical power of the Web to target western clients who could reap more benefits from what you’re providing (and afford to pay those rates). Then why exactly shouldn’t people living there NOW charge more to the clients they’re targeting in the West? The argument just doesn’t make sense.

But that’s okay. You’re making my case for me.

Great article Yaro. I am all for outsourcing. I only outsource individual jobs here and there, but each time I send off $100 here or a $100 there I know that that money will help those that helped me, feed their families. The more I outsource the more I am helping people. Supply and demand and capitalism is a wonderful thing, contrary to popular opinion. How is it fair that I have to pay “$50 for a good meal” when someone in a 3rd world country can get the same quality meal for $2-5? Either I am being “exploited” or again it is supply and demand at work.and that is a good thing.

It is all about choices and freedom. As someone commented earlier.parents, living in 3rd world countries, being able to stay home with their families, while making a good living is great! Where before there only option was to immigrate to another country, now they can do either. More choices = more freedom! Greetings Yaro, Nice post explaining the outsourcing issue. I believe it is naive to assume outsourcing to other providers or to other countries is ‘bad’. Outsourcing in a globalized world economy is a fact of business life.

Paying people ‘fairly’ is dependent on the values of the people outsourcing and asking the age-old question just because I can do something, should I do it? Creating value and exploitation are not worthy bedfellows and the marketplace has a wonderful balancing effect in the long run. The fact that you are questioning your values concerning the outsourcing issue and bringing the discussion into the light will help us all find this balance. I read your article, and I saw potential for you to be heading in a great direction, but I think you miss a huge problem with outsourcing, helping your own country. I think you should interview Angela’s husband and understand his point of view.

I keep hearing about how you want to make things better for the outsourced employee and their country, but what about the graphic artists in your own country, and the graphics industry in your country? What about all the employees who are out of work in your country? One of the reasons our economy tanked in the IS is because we don’t have jobs for people here. Most manufacturing is done in other countries. There aren’t enough jobs here, because they are being done elsewhere.

While that is good for the few rich, our country is suffering horribly. It is unsustainable.

And when the middle class disappears, who’s going to buy all those precious products that are waiting to be bought?! Seriously, if you’re making $90,000 a month, why on earth can’t you pay someone locally $3,000 to $5,000 a month? It helps your local economy. It helps your country, your family and friends.

I have many friends out of work right now, and they are actively looking for work. If I were making $90K a month, while my country was suffering from lack of employment, and a handful of my friends were out of work, while I’m “helping some guy in a third world country”, I would not be able to show my face to my friends. I think outsourcing is one of the biggest problems why my friends are out of work. I have nothing against hiring outside of the country. If the US were flourishing itself, I would be all over outsourcing. But for every outsourced worker, there is an unemployed worker in my own country. While you’re making your big bucks, good people are losing their homes, and not by their own fault.

I used to be a graphic artist myself. But when the Dot.com bust happened it changed the industry. I live in Seattle which used to be a booming area for graphic artists. But suddenly at that time, we were over saturated with artists.

I was a print artist, but then print jobs started going to artists who were previously web designers. It plummeted wages like crazy. Not to mention all the graphic artist outsourcing that was starting to happen. These days we have a lot of ex-graphic artists doing completely different kind of work. If it wasn’t for the greed of corporations and people like yourself, that industry would still be thriving. I’m not bitter about that myself, as I’ve been out of the industry for 10 years, but I do see the bigger picture as to how outsourcing hurts our country, our people, and our failing economy. As long as the economy is hurting in my country, I will never outsource.

A well known UK manufacturer was criticised some time back for moving his operation into South East Asia. This move resulted in a few thousand job losses at home and protests were loud and plentiful, although ineffective.

When interviewed on national TV, the CEO and founder insisted that he was a patriot and would have liked nothing more than to keep his entire outfit under British control. But he also went on to say that all those in competitive industries had already taken their operations into Asia and as a consequence were able to undercut his products on the high street by more than half. If he were to remain in business, there was no other choice but to follow suit. So you see, if he had stayed put in the UK, he would have gone out of business and the job losses would have still occurred.

That means there would have been no more of his quality brand products for sale nationally or worldwide, thus removing some choices for consumers and a competitor from the industry. So by moving out lock stock and barrel, he was able to stay in business and provide his goods at a competitive price. This means that consumers can still purchase his merchandise, UK and global retailers can still profit from the company, and thousands of jobs have been created in other countries. The alternative would have achieved nothing for nobody!!! The moral of the above is that it’s not all doom and gloom.

It’s simply about peaks and dips, swings and roundabouts, and an international marketplace that seems to be finding its way for all concerned. This is the system of the global economy whether you agree with it or not. You either embrace it, or you don’t, but if you’re a real world entrepreneur or netentrepreneur in the twenty-first century, then you won’t be much good at it if you reject globalisation, and this includes outsourcing. Let’s not forget too (also mentioned in your piece above), that those companies and individuals where the work is outsourced to, often fare much better with regards to pay, conditions, and fringe benefits, than if they worked for local national employers. When all things are measured, outsourcing to people in poorer countries is all relative! An air conditioned taxi in say Bangkok starts at around $1 (US) for the first mile or part thereof, whereas an average taxi fare in the UK starts at around $5 US (outside off London), for the first mile or part thereof, and a whopping $2.50 for each subsequent mile.

For the Bkk cabbie, it’s just $ 0.09 for each subsequent mile. What I’m trying to say is that you get a lot more for your buck in poorer counties, meaning those cheap employees are getting more equal opportunity than you might at first think. So what’s considered low-cost labour to you is perhaps a great little earner for the receiver who can take your one dollar a lot further than you ever could! Finally, there are many expats who live in these poorer countries like kings and queens.

They enjoy a lifestyle at a fraction of the cost the same existence would cost them back home. The truth of the matter is that they could probably never afford the same standard of living in their own counties, hence the reason for their expat status.

Are these types (expats abroad), also exploiting these countries by living the life or Riley abroad? And what about the issue of spending all their accumulated wealth in a country that’s not theirs? Some would say the expats aboard also turn their backs on the motherland by taking advantage of poorer nations. The debate continues. Yaro, while I understand it’s possible to feel some guilt for succeeding at a higher level than others, I think you’re wrong on this outsourcing issue. Look at it this way.

John Reese and Frank Kern and Yanik Silver (and indeed you) have worked hard and gained more knowledge than your customers have. You’re are all making a great deal more money than most of your clients. So are all of you exploiting them and taking advantage of your knowledge differential by charging unfairly high prices when you teach those who don’t have that knowledge yet? Should you all be slashing your prices in the interests of fairness? Taking advantage? Give me a break. Of course you’re charging high prices.

And I hope you’re making good profits. Frankly, I don’t see anything wrong with that, and I don’t see why you should, either. I also don’t see any difference between making more money than your customers and making more money than your subcontractors or employees.

There will always be people who resent it when they see somebody having more money than they do (but they may camouflage their resentment by accusing you of taking advantage of “those poor downtrodden and exploited folks” you’re hiring). That seems more than a little disingenuous to me. Is the owner of a restaurant or a department store taking advantage of his employees, and building his fortune on their backs? He’s asking if anybody wants to avoid the risks of starting and running an enterprise by working for his company.

He takes more risk than they do, solves the harder problems, carries greater responsibility, makes the bigger decisions, and he’s rewarded appropriately for it. If both parties to an exchange are genuinely satisfied with it, what business is it of any bystanders?

If you’re not happy with what you’re doing, fine. But such angst along the way To put it bluntly, I think this is the biggest non-issue I’ve ever seen you belabor.

Cheers from warm and smiling Thailand, Charles. Hey Wendy, I have some charitable things going in my business, but of course I could always do more. I did well enough off the promotion of Outsource Force, but for the moment I choose to give most of my profit to my immediate family, at least until they are financially free as well.

That being said, I’m looking closely at how I spend my money and make adjustments – I’m constantly revaluing what I do and need to remind myself what’s important to me, which is partially why I write articles like this. I’m pleased that so many people have responded to this article. I believe the run-off impact of spreading ideas like this can cause an incredible amount of positive change because of the change in attitude it stimulates, most of which I will never know about because of the degrees of separation.

“Even though $300 USD a month may not seem like much to someone living in a developed country, in Thailand, or Romania, the Philippines, or India, it’s above the average monthly wage.” Here’s another question: Isn’t it at least a little bit hypocritical to justify something by saying it’s “above the average monthly wage,” when as a business owner you clearly wouldn’t be happy with the average monthly wage where you live? I doubt $500 per 30 minute consultation is anywhere near average.

If it is, then make some room, ’cause I’m coming over! 😉 I don’t know. Just playing devil’s advocate. But this goes back to my previous comment — I don’t see how someone can justify location-based pricing when they don’t practice what they preach in their own pricing. I mean, shouldn’t you also be happy just settling for “above the average monthly wage” for the better-than-average services I’m sure you provide?

You can’t play both sides. Either pricing should be based on location, or it should be based on skills and the value provided. Thanks for addressing this issue.

I don’t believe it’s exploitation of workers in the Phillipines or elsewhere in developing countries because their purchasing power for $2 is so much greater than those of us who live in Australia, US, Canada, UK. Therefore they get great value for what they’re paid. The issue is back here in the “developed” world. Freelance websites seeking, article writers, SEO writers, content writers of all kinds expect to pay $4-5 an article, or something incredibly cheap which works out on an hourly basis at less than minimum wage. That’s exploitation.

I’m disappointed that you chose to state that outsourcing is “slave labor”–and presented it as a fact. Wikipedia defines slavery as: “A form of forced labor in which people are considered to be the property of others. Slaves can be held against their will from the time of their capture, purchase or birth, and deprived of the right to leave, to refuse to work, or to receive compensation (such as wages).” Are you seriously equating paying people more than the prevailing wage in their country with the horrors of slavery? That is disturbing, and is an insult and a disservice to the millions of people whose lives have been severely damaged or taken away from them because of slavery. I addressed this topic in my latest post about outsourcing (I even used a similar subhead as your headline!) and really what it comes down to is that we know YOU wouldn’t work for that wage, but many people are quite happy tojust as many people in my hometown in Indiana are happy to work for minimum wage and have a job at Walmart, a local restaurant, or as a store clerk.

Many of these people have college degrees, too. Here’s my full post comparing prevailing wages in my home town to more expensive locales: I’m happy that this has encouraged you to give more back to the countries from which you hire workers. I think that’s awesome.

But it couldn’t be further from the truth to look at outsourcing as slavery. Another interesting post– There are also the effects on foreign economy to be considered! Some years back, when MacDonald’s opened their first restaurants in Russia they were paying workers more than a medical doctor was earning. Needless to say, that pushed the governments buttons as was quickly corrected. Should automobile manufactures be forced to work only in Michigan where the UAW demands wage/benefit packages that are twice what they are in the Carolina’s? Here in the U.S. Government creates huge incentives to outsource.

Among them are taxes, unwaranted environmental considerations, and policy mandates. One major consideration is that the Liberal’s have virtually destroyed our educational system. Making local source scarce. Barack Obama’s half-brother, livies in Kenya on $12/year. Barack could send him $12 every year and double the standard of living; but that is another story. If we are wrong to hire less expensive labor because we believe it to be “slave labor”, shouldn’t we also stop buying clothing from China, imported cars, electronics products made in Asia, and foods from South America and Mexico for the same reasons?

John, As far as US politics is concerned the Democratic party has a fairly protectionist stance on labor and if they stay in power I expect that the incentives to outsource overseas will be replaced with a dis-incentive to outsource. Currently the politicians in power in the US are against outsourcing and are slowly working to make it harder. They have already made it more expensive for foreign companies to trade with us.For instance, there were some interesting protectionist policies in the last stimulus bill to protect steel companies in the US. You should search for “obama protectionism” or “congress protectionism” and you will see where things are headed.

So at least some people in our government (the Democrats) do think it’s a problem. That said I don’t think. Apples and Oranges. People used to think that we were exploiting China. In the not so distant future, they will have the upper hand on us. It makes no sense to compare 2$ there to 20$ here.

Manila is one of the cheapest places to live. It would be like asking us to pay 1500$ for rent there.

The only thing that business of our relative size should be considering, like Yaro says, is to not be too greedy. Give back to either your community, or some other country that is even poorer than the Philippines. If you can, hire someone in your city to help you manage the outsourced team. Maybe give internships to students coming out of school.

But to try and guilt people into not doing what makes business sense to everybody concerned is foolish. Addressing the issue the way Yaro has is commendable. It has probably done more good than if he paid his whole team 10 times more. Yaro, I appreciate this work you’ve done laying this all out. It’s important for people to be aware of these darker sides of capitalism and the global economy. I’ve been employing overseas contract workers (from the US) since a couple years, mostly for web design and advanced web development projects.

My clients reap the benefits from me being able to charge them less, and I reap the benefits of being able to actually make a living from this work, which as you know is very competitive. Anyway, I wanted to mention something related which bothers me much more than this issue: In Australia actually, the wage standards are much more fair, even though the cost of living is a bit higher. In this country (supposedly the world’s richest country), the legal federal minimum wage is now $7.25/hr., which after taxes amounts to something like $200-250/week I presume. I was just watching Morgan Spurlocks 30 days ep.1 in which he and his girlfriend take min wage jobs for a month and survive on that (see netflix streaming), so it’s fresh in my mind. So many people are left behind, and the rampant violent crime, drug trade and gang warfare results from this culture of neglect, in which the ethos and motto is essentially each man for himself. No wonder then people are going crazy all the time, and everyone’s obsessed with watching their own ass.

We need to think about more than just our own selfish needs and interests, and rise up the people in the worls along with us. Much love, S. This point has been niggling at me too, and especially since seeing the $2 an hour. I am a very unprofitable business still (in fact no profit at all) but am still trying to make it work. I have a lovely lady from the Phillipines who helps me from time to time and at least her pay is quite a bit better than $2 an hour and well worth it. I had already decided that if and I hope when I start to make a profit instead of a loss that I could increase her rate of pay still further.

Hope that day comes soon. I am glad you took the time and trouble to go deeply into this question and I found the replies on your blog very illuminating. Yaro, great post Gives people a lot to think about and a great discussion to have around the topic of outsourcing. I recently posted a similar post dissecting my own opinion on John Reese’s “Outsource Force.” My opinion comes from a different place than some of the people who have commented already. As someone who runs a Canadian based outsourcing firm (that has serviced over 300 entrepreneurs around the globe), I have a business and personal interest in the general attitude around outsourcing.

The problem with hyping up cheap labour can fall into many different categories – many of which you’ve already covered here. The primary problem that I see happening is the attitude around the “value” of outsourcing. If people tout outsourcing as a way to effectively place cheap labour into your company (to then create more profits), thousands and thousands of North American based outsourcing companies quickly have to begin justifying their rates OR they have to close up shop because some of their clients or potential customers have been told that $2/hour is the “Power Hour Formula.” I have an abundance mindset and an attitude that there is enough work for everyone. At the same token, I would much rather explain to my clients where outsourcing cheaply makes sense and where it doesn’t. Instead of blanketing the entire outsourcing idea to companies overseas for cheap, it would make much better sense to talk about the differences in the two types of outsourcing.

This would be an excellent alternative to John Reese’s overhyped marketing and to the numerous blog posts that focus on outsourcing overseas vs. I’d also be curious to see what these business owners, who are of the greed mindset and only want the cheapest labor and largest profit, would do if their business started shifting to overseas providers who were willing to do it for less. They’d understand that the issue really is about balance and they’d try hard to educate their market around the “value” of what it is they do. Yaro, loved your article as it addresses many issues. I live in Southern California and it is very expensive here and almost every neighbor outsources their yard work. Yes, cheep labor is right here in your back yard.

Each and every one of us outsource what we buy. Thus, any business should operate under the premise of “what is best for my/our business and if outsourcing works for them than they should utilize that source. If any one has contacts for outsourcing web content like WordPress, please contact me through my website or email, as I’m looking to outsource the stuff that takes me too long to do.

Do what you do best and hire the rest. Hey Yaro, Excellent post. Since 2006, I have seen the market in the Phillippines open up to SEO and IM industry. From PPC, link building to content creation, these skills are quickly being learned and applied to their resume. When it comes to outsourcing in the Philippines, its NOT exploitation since there is an agreement to both parties on the rate per hour or project.

If the worker agrees to your proposed project then all is good. Remember, as your VA is completing your assigned tasks, they are also gaining VALUABLE experience and knowledge, which would otherwise take months or years to learn. In fact., some of my previous VAs ended up offering their services to other clients. All is fair in the business world. I’m happy to see them improving their lives and being part of it.

$2 per hour is just marketing talk. Depending on the task, it really all depends. Look at Mturk on Amazon, is that exploitation?

I believe everyone would agree its NOT. There is more gained by the VA than JUST the hourly wage.

Education, education, education. The exposure and knowledge learned from each and every task is priceless.

They are learning your expertise and knowledge on the job, where you have paid your dues to learn yourself. Is it slavery? (IMHO) As more and more business owners saturate the market in the Philippines, rates WILL go up. I’ve seen increases every year. This is my first time posting a comment on this blog though I get on your blog pretty much everyday. I want to thank you Yaro for bringing up issues that might get overlooked by others like myself especially when venturing off to the IM world and looking into outsourcing. I feel that its not only the money that they will be getting when they work for our company, but our plan is to bring something of value to their lives.

To see these people as a mere means to an end is where most IM people can run into a problem with outsourcing. Yes its great providing them with a job and amazing pay rate but we can go a step further by finding out their needs, desires, or goals. I know that will take too much time from all the gazillion things we are doing. But I feel that if somehow they can find the value in what they are doing for you and for themselves and its interwoven in their work thats a start in not only changing the world economy but the individual’s life. Hi Yaro That’s great post – many thanks! I have been following all the outsourcing stuff and have been seriously looking at it myself, but this has been one of the questions I’ve been mulling over as well!

I think your approach is the best and most honourable. I’m all for capitalism but making money for just the sake of making money is pointless, unless you have well-defined end. What better than to make a humanitarian cause that goal? After all, that’s what Bill Gates has done!

You’ve inspired me to take the same approach! Regards Nick Davies. Outsourcing is what has brought the Canadian and US middle class to its knees! It is disappearing at an alarming rate. That’s the segment of the population which was the largest, paid their taxes, sent their kids to school and led responsible lives.

Hundreds of thousands have been wiped out financially – when they once lived in their own houses, paid their mortgages, they are not living in tent cities all over the country – thousands of people! Good solid citizens living the “Canadian or American dream”. How about our immigrants? More and more immigrants are being allowed into Canada and the US. Many were managers, attorneys, doctors, nurses, etc. In their home country – they come to the US and Canada and must accept minimum wage paying jobs to survive – to feed their families. Are they better off?

Many have gone back home. Despite all the great stories of recovery – the economy is not recovering. In both of these countries, what we have is a growing chasm between the rich and the poor, most people ending up on the poor side. Because people have done all the right things – saved, raised their families and hoped for a great retirement based on what they had saved. They’ve been wiped out – some in their 30’s, 40’s and 40’s – with no prospects of jobs! And finding a job in the US and Canada is difficult beyond the $8.00 per hour jobs available in the service industry and even those are difficult to find – try living on $64 per day and pay your rent, food and transportation at ever increasing prices.

Big corporations went to the “have not” countries many moons ago – now these countries have the jobs because they have the manufacturing plants. Those jobs are gone forever in these countries. Ever increasingly, governments in the US and Canada are raising taxes to cover the escalating tax burden for the many who have lost everything – good people displaced by outsourcing. Those paying the taxes are in their 30s, 40s and 50s, not realizing what is happening and they too, as mortgage rates rise, will be displaced. So, if you want to outsource, outsource in the US and Canada – many people would gladly take your $500 per month and do your work for you – they may even take your $8 per hour – no one realizes what is happening in Canada and US at the “grassroots” level because those who report are not there – they are the big money earners who haven’t a clue.

In the US and Canada, you can buy “big talent and experience” for very little – If Nike, General Motors, Walmart, and other “big business” people had not “outsourced”, the jobs would still be here – they are not. No one seems to understand the devastation which outsourcing, in the long run, produces. It’s great to help people in other countries but not at the expense of your own. I believe in helping your own before helping others. Once a country or a person is financial stable, it’s easy to help others. It’s the same as your own health – if you are healthy and strong, it’s much easier to help a frail person cross the street or pick up a child who has fallen.

A strong economy in your own country allows your country to help others while maintaining a good standard of living. Next time a person thinks of outsourcing, think about finding someone at home first – it’s in your own best interest because those you are paying will likely circulate the money to allow others to buy your services in a symbiotic relationship. It’s incredible that other countries understand the concept of helping their own before helping people in other countries, and yet, Canada, the US and Australia can’t seem to fathom that concept. There’s a lot of hype on the internet about “big bucks” – $90,000 per month is obscene if that person is outsourcing at $2 per hour. Sure it feels good to have all that money in the bank but at what human costs.

Yes, I know, many business people are so wrapped up in the “things”, they don’t care about the human costs – after all, who cares about a bunch of losers! Next time you talk about losers, ask their children and their grand children – get the story straight. So, for all the “big internet operators” out there, I’m glad you’re making a lot of money – it’s a good thing – but I hope you outsource in your own country first – your profit may be smaller but at $90,000 per month, how much do you really need for yourself? Because this is the reality of what will happen... Those people you are outsourcing to will learn what you know and they’ll be making the money. Soon, they’ll be paying your children $2 per hour! Well said Lorraine!

I think the point is “what goes around comes around”. Really we are all greedy. We all want stuff cheap, at the lowest cost. So Walmart moved everything to China Inc. And now we wine that all the jobs are gone. We did it to ourselves. You can’t even get decent programming jobs anymore.

Java jobs used to pay $75 /hr now if you post an ad on Craigslist you get tons of responses of guys from India charging $10. Check out China Blue: and Manufactured Landscapes: At the end of the day we are just taking away from ourselves. Maybe if we start giving and sharing more, asking “How can I give” instead of “How can I get” things will improve for all of us.

Hi Yaro: I signed up for your email list after listening to your great podcast with Pat Flynn of Smart Passive Income, so I have only been following you a short time. I was one of the people that emailed. I am on email lists for 4 popular bloggers, and 3 out of the 4 sent me the affiliate link to John Reese’s Outsource Force all within a 2 hour timeframe. You happened to be the only of the 3 that I emailed and I hesitated before sending the email.

I actually felt you would be the most responsive. While I hadn’t expected a reply, I appreciate the fact that you brought up the issue for discussion. I have only wanted to follow bloggers who are in their integrity about how they run their business. They are a lot of successful bloggers out there who I feel are good at what they do, but aren’t in their integrity. To be honest, had you not written this post, I might have unsuscribed now or down the road. Thanks for presenting and writing a thorough post on the issue. Your MessageYaro.

Yours is a classic case of what development author calls ‘The White Man’s Burden’. If you get a chance, (or haven’t yet read the book) read Easterly’s fascinating thoughts on aid, development, misguided self righteousness and basically the struggle of folks and governments in the developed world racing to save the so called third world from themselves. While I was reading your post as well as the varied comments, I couldn’t help but think of ‘The White Man’s Burden’, an excellent book by all accounts. My two cents though, the issue here isn’t about outsourcing. It’s a global market and a brave new world and outsourcing is here to stay. The real issue here is the “how” it’s done – a classic example of how not to do it being that of John Reese with his sunglasses waxing lyrical about his earthly riches for the cost of a Filipino grafting for $2 an hour in the corner of their bedroom for 18 hrs a day.

That picture is just unacceptable. Yaro I am bother by the language of slave labor. And I am also troubled with $2 per hour wages. If minimum wage is $1 USD in the Philippines, then $2 USD would be twice minimum wage. The point is this, anyone looking for work in the Philippines maybe very happy to stay at home and work for twice minimum wage.

And if they did not like this arrangement they could either ask for more money or they could not accept the contract. And as you pointed out this will eventually raise wages in countries like the Philippines.

It would be hard to argue against out of control wage practices of Western Society. From a practical point, how could we possibly control wages at the global level? Any attempt to control wages would undoubtedly lead to control of communications. The genie is out and there is no turning back. I have been challenged as we all have with the greed of the banking, insurance, and real estate industries and I think the discussion revolves around the fairness of what the lowest paid person in an organization gets paid and what the highest person gets paid. It’s then an easy mathematic formula to determine the multiple of what the highest gets paid vs.

The lowest (i.e. $2,000,000 / yr vs. $20,000 is a 100 times greater). I’ve heard of people with ethical challenges saying the difference should never be higher than 7 – 10 times. It you adhere to that, then if you paid someone $300 / month than you shouldn’t be making more than $2,100 – $3,000 per month.

Or if you use the bigger companies models then you would be fine with making $30,000 per month. Do you see how you might feel if you were making $300,000 per month? You’d be ranked as more scandalous than the people that American’s are tagging as the villians in the current economic crisis. Give it away (the amounts over a certain amount), give it back to the worker, all come down to how you feel about yourself at the end of the day.

It comes down to this question, once the basic needs are met, “How much is enough?” “When will I be satisfied?” I believe it was John D. Rockefeller that answered the the first question with the answer “one dollar more”. So it’s left to what’s in your heart.

Andy Collins. Yaro: I stumbled across your blog a few months ago and have been following you ever since for 2 reasons: 1) You live in Brisbane, a town that gave me some of my best childhood memories. (I’m now living in the US but planning my first trip back to Brisbane since my childhood in the next year — couldn’t ignore repeated annual requests from our former Australian neighbors. Aussies are the best and warmest folks!) 2) As a former national business journalist in the US, I was thrilled to find someone who wrote exceptionally well, who has integrity and offered transparency. I raved to my colleagues, many of whom are still in traditional print journalism. Thanks for your thoughtful post – it examines the moral and ethical considerations in life and business — not just how to make money in business.

It’s a great example of how you can differentiate yourself in the online marketing businesses. I also posted to John Jonas when I saw him referring to his outsource staff as “my Filipinos.” My point there was the importance of paying attention to how we use language: The Filipinos that he pays clearly aren’t “his.” Better to say: “my great outsourced staff in the Philippines.” Would love to meet in person when I make my first trip back to Brisbane since my childhood! I the meantime, I keep spreading the word about your great blog.

Warm regards, Marie-Jeanne. Yaro, As one of the folks who wrote a very negative response to your outsourcing stuff, I am very impressed that you have thought about this; are willing to do some uncomfortable internal work, and are out here talking about it all. I have watched a huge proportion of US jobs go away to cheaper placesadded and abetted by a government that is so pro corporations and corporate profit, that eviscerating their own country means nothing to them. Since I am a citizen of the US, there is another piece to add to the whole discussionpeople need to be aware of the effects of all of the policies and actions from their own country, to other/third world countries. Corn subsidies in the US allowed us corn to be sold in Mexico at below what it cost to growputting 1.5 million farmers out of a livelihood. In an effort to survive/feed their families many of these farmers headed north to work at anything they could get hired for here in the US.Now some so-called patriots are slamming and vilifying these people, saying they need to go homenot knowing that the US is the cause of them being here! Farmer suicides in India-complements of Monsanto GM crops they were forced to grow; that needed expensive chemicals so lost their farms.

Food issues may be a long way from making money on the Internet, but the principle of knowing what your actions do in all arenas, is the same anywhere and crucial. Humans need to learn that no matter where we live we are all connected and that there is enough to go around if those of us who started out with more by virtue of accident of birth-place stop being so greedy. I applaud your decsion to walk your talkwith your money. What ever I do with my Internet goals, however much money I eventually make, I will not do it on the backs of those less fortunate than I am, fully knowing that even on my worst dayI have lived (for 60 years) better than 2/3rds of the rest of the world, just because I was born in the US.

Thanks for a great post. Your Message Hi Yaro, Thank you for bringing up this subject of outsourcing as exploitation. Kudos to ya for having the courage to address it head on! I think you pretty much covered the moral dilemma that most “outsourcers” and “outsourcees” maybe struggling with. However, on the subject of you changing your perspective and extending help to the countries in which you outsource from, MacSwitcher is really on point and I would suggest maybe using that extra income in directly benefiting the employees you currently have by teaching them how to fish.

By this, I mean, give them access to your membership program and maybe start like a scholarship program to benefit the individuals from the country you outsource from. That way, you see your donations working directly to benefit the people who have directly benefited you! Thank you for being inspiring and for being a leader in your field of work. Very thoughtful article on a complicated issue. We can not/should not view the world of others through our own expectations. $2 an hour is slave labor in the US, but is above average income other places.

Does paying higher wages increase wages over time for the entire country? Looking at China and India, the answer is “yes”. Does it take away jobs in your country? That depends. If the wages in your country were high enough that you could not afford to create the position, then no, it did not steal a job. If you could afford to pay local wages and chose not to, or did but then let your people go to outsource cheaper, then yes.

It’s all a matter of what’s true in your situation and what your conscience speaks to your heart. I have been a reader of your blog for quite a while now but have never commented on any of your posts before (I think). Dun know why maybe I just didn’t have anything significant to say. However, for this post, things are different. It is because the issue you touched on is one that is extremely close to my heart.

I totally get where you are coming from. For the longest time, not only was I uncomfortable with the idea of leveraging (some may call it exploiting) other people’s efforts for profits, I was actually uncomfortable with the whole model of entrepreneurship as how most people understand it Set up a business –>Make as many sales as possible (good customer service optional, practically) –>Minimize all business costs –>Make as much profits as possible –>Reinvest some profits into the business to grow it and make even more profits –>Distribute to all stakeholders in the business as much profits as possible. That is the pure capitalistic view of entrepreneurship and I had problems with it. I somehow didn’t feel that it is THE answer to the world’s problems Probably because of my socialistic leanings. Don’t get me wrong though, I appreciate capitalism and do subscribe to some of its philosophies.

But yet at the same time, I do think that socialism has its merits too. You may call me a socialistic capitalist or a capitalistic socialist.

In any case, this is how resolved my internal conflict I decided that entrepreneurship is still THE best way to affect positive changes in the world. My world and everybody else’s world. Because I think money is the best leverage anyone can have in the real world. I may be wrong but from what I have learnt, seen and experienced, money is the best leverage we have to achieve any type of results. Yes, some may say that there are other types of leverage that can be as useful or even more so such as energy, time, persuasion skills, compassion, etc. However, for all practical intents and purposes, I believe money is the most effective AND efficient form of leverage we have in this real world we live in. And the best, meaning the most effective, efficient and morally & ethically correct, way of getting money is through free market entrepreneurism.

At least it is the best way I know. However, it is how we use the money that we get through our entrepreneurial efforts that is the key here. Too many entrepreneurs are too focused on spending their money on material pursuits. To me, the key reason why someone becomes an entrepreneur should be financial freedom & security, not financial decadence. The objective should not be to gain as much profits as possible so as to accumulate wealth for wealth’s sake.

An entrepreneur’s bottom line should not just be financial, it should be social too. And that is how I conduct my business life now it is tied very closely to my personal life. The way I figured it, I don’t need that much to live in this world. My apartment’s modest; bigger than most and slightly on the higher end but it is no luxury penthouse or mansion.

My car is Japanese (read as long-lasting), comfortable and reasonably spacious. I don’t see a need for a Ferrari, Lamborghini or Porsche. I don’t eat gourmet food, neither do I eat out all the time. Fun-wise, spending quality time with family and friends doing low-cost activities such as movies, bowling, picnics, etc. Is already extremely fulfilling. And I am extremely happy with things being as they are my current standard of living is more than enough to meet my financial, spiritual, developmental and familial needs.

And that is why I have made it a goal of mine, while maintaining this standard of living, to go from currently giving 20% of my income to charitable & humanitarian causes to giving 60%. (20% is for savings & investments and the remaining 20% is for expenses) That is the goal for which I am growing my business, not for a more extravagant lifestyle.

Once I reach that goal, I may consider expanding my lifestyle given continued business growth, nevertheless 60% of my income will still go towards charitable & humanitarian causes. With that, I am considerably at peace with myself. I have no qualms about pursuing business growth aggressively and paying, what is perceived to be, peanuts to my remote employees. Because the main reason for me then to grow my business will be, to put it simplistically, to leave the world a better place than the way I found it. Thank you for the time.

For me one of the questions would be if you don’t use the outsource option when you need to would fewer projects get done because of cost implications? Particularly important to those just starting in internet business who don’t have much money to spare.

There are other long term implications to working internationally in this way – international outsourcing is the best replacement for charity we could hope for and the people receiving these wages will hopefully go on to develop their own businesses (if that’s not where they are already at they are connected to the path that can lead them there). International employment is also one of the best anti-war; anti-prejudice strategies I can think of.

I don’t think we should get too smug in our criticism of this process – it may be in a few years these countries will be outsourcing to us. The true judges of whether or not $2 is an acceptable wage are the people on the receiving end. Aren’t we all in the same boat? I’d imagine, Yaro, some of the money you earn or save as a result of this will go back into Australia – and would it be wrong to think more money is coming into Australia from international sources than is going out in wages as a result? What goes around comes around in all kinds of ways. For me, one paragraph sums up the vision all must have – “must have, not should have” Yaro wrote: “Just remember when you finally do break through to financial security – and that doesn’t have to mean you are a millionaire – you have the opportunity to support those who support you.

If I have helped to plant that seed in you, then writing this article has been worthwhile.” Double edged sword? Jon Limjap wrote: “Had it not been for these outsourcing jobs, we would be forced to emigrate to other countries (yes, Australia included, as many have actually done) so that we would earn wages corresponding to our skill — our local economy simply isn’t big and dynamic enough to sustain the kind of money needed for what we consider a decent lifestyle.” – In the western world we have two types of criers – “The keep them out” and “the don’t employ them” We dont want an influx of immigrants into our countries and yet we are doing nothing to help them stay rooted in their own land. Surely outsourcing is a good thing in the sense of helping the people of a specific nation grow and prosper instead of driving them out of their home land and into our back yards where we don’t seem to want them. I say let them grow as you grow and while you do that, revisit the above paragraph by Yaro and start that ball rolling – slow as it may be, at least it is rolling and with more people taking up the challenge it wont be long before we get there. Hats off Yaro for such a well thought out article – you touched on all sorts of points that can be argued for and against the topic. There is no right or wrong stance on this topic just as the issue with vegetarians and non-vegetarians – in both cases the right stance is for you as an individual to do what you believe is the right thing and let others do their right thing even though it is not in agreement with your “right thing”. As someone said above – “I get the work then its a job, someone else in another country gets the work then its exploitation?” Time to wise up and drop the “them and us” mentality.

Hello Yaro, I don’t think the pay difference is exploitatory, it is mutually beneficially. At the start paying someone in a developing country $300 to $500 a month to work for you may seem small, but I can assure you, if the person is smart and satisfies you well, and asks for increase in pay later, you will definitely top it because you wouldn’t want to lose him/her, you may even make them partners somehow, its a possibility. It will also offer them the opportunity to learn Internet marketing and develop their business from the experience gained working with a guru like you. Remember that in the developing countries $300 to $500 monthly could be of big help for them to maintain a living and assist their families.

If outsourcing opportunity doesn’t exist, it would be tougher for these folks. The bottom line in what I’m saying is that outsourcing tend to favor those who get the job in developing countries than the outsourcer from the US or Australia, however, you should have the mind of later increasing the pay, sharing profit, or making the employee a partner in the business based on their performance on the job. Yaro, you lay out a complete, compelling, and well formulated discussion of the topic. I have to fall on the side of “it’s a global economy now and outsourcing is part of the dynamics, get use to it”. I outsource to India the technical side of my online business and hire locally for the graphics because the graphic work takes more communication and understanding between designer and customer.

It is simply easier to do without the additional issues of cultural and language differences. Technical work is easier to explain, language difference matters less. For me, it is about expediency. There is no exploitation involved. The Indian I hire is free to work for as many people as they wish and can earn a higher wage simply by putting in more effort. The opportunity is there for them to even hire other Indians to work for them and grow their business even bigger.

Capitalism works! The prime minister of India, Manmohan Singh would agree, he sees economic growth (over government entitlement programs) as the best answer to poverty. Who am I to argue with him? By outsourcing to India, I can afford to grow my business in ways I could not using all American labor.

This allows me to generate income to purchase goods and services I would not otherwise have been able to buy. Thus stimulating the local economy. As a personal choice, 20% of all my business profit goes to support a school in Haiti, so it becomes a win/win all the way around. You touched on the topic of abundance mentality.

That is the heart of the problem for many people in wealthier nations. We can get into the mindset that there is a finite amount of wealth in the world and someone else would have to lose money for us to gain it. Entrepreneurs are innovators, we come up with new ways to generate income and provide value in the form of new goods and services. We create new wealth. And, paradoxically, the more I give away, the more I gain, both materially and in other ways.. I can see outsourcing as a way small business entrepreneurs can substantially impact the lives of people around the world, for the better, in ways that were never possible before; both by hiring people in developing nations and by sharing their resulting wealth.

Your friend Chris is a good example of one person making a difference 🙂 Thanks for sparking the discussion! Yaro, I think it’s great that you are so considerate of others’ opinions and views that you are willing to step back and reassess your own actions. IT’s always great to keep an open mind because that’s the only way we will be able to learn. My parents came from a third world country so I asked them how they felt about outsourcing to poorer countries. In their opinion, any work is greatly appreciated and welcomed because honestly at the end of the day, the income you’re paying them is allowing them to put food on the table. Fantastic thoughtful and thought provoking article. And what courage to put yourself on the line.

I’ve come across a few people recently who have outsourced to the Philipines. These are people who I admire and respect yet I’ve struggled with the notion that they are exploitation those less fortunate. I also know however as you discuss that like many complex issues in the world this is not a black and white decision.

There are so many variables. Love the notion of putting back into the country. True equality may be a pipe dream but if we can find ways to support and more importantly empower others to improve their lot then we stand a much better chance of closing the gap.

Thanks for your honesty, your guts and your integrity. Hi Yaro, Thanks for opening up the discussion. The issue is justice I think (there’s a word you don’t see much these days). I have a few comments. Those who object to outsourcing don’t seem to object to people in their own countries being paid less than the wealthy. I read this is a marketing book: Imagine you are at the work picnic, the setting is beautiful, the free food and drink wonderful; the boss gets up to give a speech and says, “Just imagine, if you work real hard, I could own all this someday”. This means profit sharing (or affiliate sales) or something as a way of addressing this inequity.

I don’t mind the wealthy exporting their wealth to the poor in other countries. In fact I think this is better than the current usual practise – of the wealthy taking the wealth out of poor countries.

I think outsourcing can be a win-win, so long as fair wages are paid. What makes a fair wage is tricky. Some people are paid millions for playing dress-ups in front of cameras while those who care deeply and well for their children aren’t. Garbage collectors are paid less than doctors but probably do more for public health. I think that if I was employing someone full-time in the Phillipines I’d want to find out if I could pay them some margin over the usual. “Frugal comfort” would be the minimum.

I’d also want to have some sort of continuing commitment to them to keep employing them and paying them more as my business became more profitable. If I ended up making lots of money through outsourcing in, say, the Phillipines, I think I’d want to set up some kind of fund that returned some of the profit to help alleviate poverty there. Either through direct relief, education or funding micro-loans or all that and more. I think justice requires that we find better ways to do business. I think global communication gives us the opportunity to do this. We have the opportunity to do so much good – we just need the ideas and courage to take the opportunities available.

Yaro, I think you did a good job presenting both sides of some of the issues in a manner most people van understand and resonate with, regardless of their point of view. I have no direct comment/opinion on the narrow slice of “outsourcing” bloggers and Internet marketers are currently discussing. I am an American (who lives by choice in the Philippines) and thus know a little more about the effects of outsourcing on the “other side” than the typical outsource who has never been here, or who made a flying two week vacation trip here.

To call paying someone $300USD per month as, say, a graphics designer “exploitation” is ludicrous. Not only is it a fair wage for honest work, but more than that, it is giving a person who likely spent years studying for a career and can’t find even entry-level work, a real foundation and start on life. Bloggers should each weigh the factors for themselves, because, as you point out, there is no clear “right” or “wrong” here. But to call paying a fair wage for honest work “exploitation” sounds mainly like the cry of those who never gad to actually work for a living in their lives. Just to pose an example closer to home for many of the readers here” Wal*Mart pays starting wages of $7 or $8 an hour (in round numbers), while CostCo pays $17 or $18 an hour for similar jobs?

McDonalds also starts people for $7 dollars or so, yet In and Out burger starts people at $15 or $16 and hour. So who is exploiting whom? And how many of those who believe in this rather specious use of word exploitation, almost as an expletive, are willing to boycott Wal*Mart? It’s easy to pontificate from the comfort of you home (using your Chinese-made Apple iPad, perhaps), but when you want a gallon of milk or a package of cheap underwear, I can pretty much figure you’re heading for Wal*Mart I know I do. (every few years when I’m in the US, that is). What intelligent and right-thinking person wouldn’t? Yet, perhaps, you are “exploiting” the “poor” workers in the store, and the undervalued truckers who delivered the goods, and the long-suffering Filipino seamen on the container ship that brought the goods to the USA, and the Chinese workers who produced much of what’s there for $100 USD a month, etc., etc.

God, Dave, all that is involved when I buy a pack of undies? I don’t want to save the world, I want to cover my butt and get on with the rest of my life.

Outsource or don’t outsource it’s your decision but don’t make a political “cause” out of a business deal between willing participants. HI Thanks for the interesting and timely topic. I have signed up with John and hope to start his course today once his website recovers! 🙂 After living in Malaysia I realize it is often misguided to view another culture through the lens of my own. I would have one take on things and then talk to locals who had a perspective that was basically juxtaposed to mine. If you really want to make an informed decision go walk in their shoes for a considerable amount of time like 12+months. Only then will you have a small chance of understanding the positive and/or negative benefits of your actions on their lives and community.

I wonder if it is not equally amiss to impose our social norms and values, however well intended, on people whose culture we do not understand? Seek first to understand before taking action might be the wisest way to appease self imposed guilt! 🙂 Thank you for this fascinating topic and providing the opportunity for me to take a step back.

I think some cultural experience and education is on high my agenda for the near future. Cheers Faith. I don’t think that paying someone what is a fair wage in their country or economy is exploitation. I think that word is being misused in this conversation. Exploitation is using someone meanly or unfairly. Paying someone a decent wage in their own economy is not using them meanly. Sweatshops are exploitation, not outsourcing work to someone in another country.

There is the point that we should utilize someone in our own country, and I also understand that view. Personally, I think people have a right to make their own decisions as to who they hire when outsourcing work.

I’m not for or against what country I outsource to as long as they perform up to my expectations. I certainly would never use someone “meanly” and would pay them what they are willing to receive. Too many people seem to want everyone else to believe what they do, and if others do not agree with them, they start pointing fingers and making negative comments.

This whole issue is one that each person should decide for themselves without repercussion. Hi Yaro, First off, you have a lenghty article here and a very good one. Outsourcing to other countries is not exploitation and definitely, definitely not slave labor as @Erica clearly pointed out. Coming from the Philippines and based on my own experiences, outsourcing significantly changed the lives of many people I know, including me – fresh college graduates who have had a very stressful time looking for a local job. Like many of the comments above, $300 – $400 a month may be worth a week’s salary in some countries, from where I come from, that’s almost worth a bank manager’s salary over here!

To think that you work from home, not having to wear a uniform, commute daily to work which contributes to the pollution, I think outsourcing is the best way to earn a living IMHO. Like you guys, everyone has to start out small, eventually growing bigger as you establish a name like B. Durant posted on comment #18 but don’t feel guilty when you outsource – you’re helping someone at the other side of the world earn a decent living and feed a family. My friend here started out at $200/month, but because of his excellence and dedication to his job, he is now being paid by his American employer $800/month. Take note guys, he is now able to send his younger brother and a younger sister (ages 12 & 10) to a decent school. Now, tell me, how does that make you feel? Next time you outsource (and my I suggest Philippines because we speak damn good English) 😀 think you’re HELPING someone.

It’s always a win-win solution. Best, Melissa (fareastern). Your Message A brilliant article Yaro, and a good read. You put it so well.

In my mind people who can only afford to start their business using outsourcing are helping themselves and those folk in the Philipines or wherever they outsource. Is it a job lost for their country of origin? Maybe not, if they cannot afford it any other way. I’d hope that the profits made by the business will be used in one’s own country and perhaps eventually one can afford to hire one’s own countryman/woman that was beyond them initially. I do think it can be a win/win – but I’d hope that there is no real exploitation along the way. People in developing countries really can make a difference earning good money and using it wisely.

Excellent thoughts and discussion Yaro – it truly shows your integrity. I thought the latest Abraham post also attests to your thoughts and your ability to be giving back in other ways. “What better way could anyone spend money than back into the economy which gives more people work? What you call your economy is the exchange of human Energy. And so, think back a few hundred years about what your economy was in this nation. And what has changed?

Have more resources been trucked in from other planets? Or have more people, over more time, just identified more things that they desire — and the Nonphysical Energy that is endless and infinite supplies that? We never hear any of you say, “Well, I have been well for so many years, that I’ve decided that I’m going to be sick for a while to allow some other people to be well.” Because you know that whether you’re well or not doesn’t have anything to do with them not getting enough wellness. You’re not using up the wellness and depriving them of it. And it is the same thing with the abundance. People that have managed to find vibrational harmony with abundance, so that it is flowing to them and through them — are not depriving anyone else of that abundance.” — Abraham I think you deserve all the abundance you receive.

Hi Yaro, I like to keep things simple and what you have to say is compelling. But I’ll keep it as simple as I can.

Maybe what we all need to remember is we should step inside others shoes and look at something from their perspective. Outsourcing from a third world person’s perspective could be like a pot of gold at the end of their rainbow. You, and other people who outsource, could very likely be offering opportunities that otherwise wouldn’t exist. These people you are employing are in third world countries after all and may live in what we would consider appalling conditions.

Their next door neighbors simply may not have the money to employ them. Looking at the big picture isn’t without merit either and your idea of giving back to these people’s wider community is great. So many of these people may not even have clean drinking water, for example, and if something can be done to contribute to improving their plight would be mind blowing. Something like good health, which many of us take for granted, is a huge benefit. So outsourcing, from my point of view is a great idea. Have a great day and thanks for the thoughts. I’m not going to quibble over names of things.

But deep down I feel that outsourcing “just for money” will come back to kick us all in the but one day. Just file this post away or keep it on this board and mark my words. One day who know you rich folks will be the poor ones of whom other nations will seek to outsource to. What goes around always comes around. I find when I have doubt about something, then there is something deeply wrong. I prefer to be lead by peace in my soul and not nagging doubts. No I’m not telling if I’ll be the one to use this method of “outsourcing” or not.

Because what I do is not the issue. But I know that I think many folks are purely just plain greedy and will stoop to any plan where they can for example put up 1000 blogs overnight and get filthy rich and then placate themselves with a 100 dollar donation to KIVA. If this is not you then great. If it is you and you can go to sleep at night oh well. All I ask is that you search your heart, look at your objectives and don’t pretend to be interested in other cultures when you’re not or just to make yourself feel better.

Very good points Yaro, but I believe it’s not exploitation. Outsourcing is the same as hiring employees in your home country.

You can make more money as a business owner than as an employee in the scenario where you’re hired to work for a company in your country and likewise when you outsource labor. Here’s an example from a “traditional outsource perspective” I used to work full time as an Enterprise IT Sales rep. I earned the company I worked for over a million in profit in the course of a year on millions and millions in total revenue. Of that million in profit that I earned for the company I worked for I saw about $60,000 for my wages. That’s a nice chunk of change, but because I want more and to be in control of my own destiny I started earning a full time living from websites instead. In the past scenario I don’t think I was being exploited?

No – the company I worked for spent years building up a business and adding clients just like you have spent building up your online presence and creating great products. I got to walk in and sell to those clients without the pain of building my own business to do so and I believe they had the right to pay me what they wanted to. Granted, I thought this wasn’t enough and so eventually I started my own business so that I could take 100% of the profit, but that’s a choice anyone can make. Want to earn more money? Start your own business. At the end of the day you can either be an employee or a business owner and there will always be differences between your income earning potential in both positions. People should never cry about how much someone earns – you’re living in a capitalist country why do you want to be a socialist and spread the wealth to others that didn’t work as hard (or a more accurate word – effectively) as you did to get to where you are?

If you feel as if you are earning too much money from the people you employ give it to charities where it will go to people that really need it? That’s what I intend to do (this year’s goal is $10k to charity and I’m on track to do it as long as I sell the website I’m working on for six figures). Chris Guthrie. Just re read my comment and noticed several punctuation errors – doh! Know I’m not an idiot I just didn’t proofread enough. Seriously though the other thing to consider is how much $400 a month can buy for someone in the Phillipines.

If they can pay for rent, food, utilities and some entertainment than how is that any different than the $60k a year I used to get from my day job where my rent was $1,500 a month, utilities $200 a month, food $400 a month, entertainment $300 a month. People are getting upset over a different in total income NOT relative income which is what is the most important factor to look. Yaro, Fantastic article. And you are right this is a very gray area and as such I don’t have a strong opinion on what other people should do in regards to outsourcing.

I worked in the computer industry for about 20 years in the US and I saw a lot of my friends lose their job because of outsourcing initiatives at the companies I worked for. The last company I worked for had a pretty strong outsourcing policy and it most likely was a huge factor in my being laid off. Prior to being laid off the only people we were bringing into our business organization were outsourced help from Inida and Brazil. I still don’t have a real moral issue with outsourcing except in the case of real slave /child labor issues like you have in China. Anyway, in our business we have chosen to primarily outsource work to people in our country (the US).

We don’t make as much profit but we personally feel more comfortable with that decision. We can still make plenty of profit and the people we pay can make a nice profit as well. We have talked about potentially outsourcing to other countries but at this point don’t feel the need to. I imagine that over time the pay in third world countries will rise and the pay in wealthy nations will go down and there won’t be as much of an advantage to outsourcing overseas at that point. Anyway, it is a very difficult topic and I get where you are coming from. We all have to choose the road that makes sense to us.

It’s been very interesting to read the different perspectives on the topic. Hi Yaro Good post, and really got me eager to leave a comment. In no way do I think outsourcing is exploitation, and it’s actually going too far to say that it’s slave labour. The dictinary definition of Exploitation is “(n) use or utilization, esp.

For profit”.er.sorry to burst any “high and mighty bubble” that some people are on, but this is THE definition of BUSINESS. Ie the entire basis of the Capitalist ideaology. If you don’t agree with it, you have no business reading this blog. Exploitation is using things and people in order to make a profit. If you work in a company, then that company is currently exploiting you.

They are using you, to gain a profit. They pay you for this privilege, so there is no difference when you cross borders, apart from it being cheaper. Thats not exploitation. Thats being smart about business. If people want to argue the point about why we (as outsourcers) can benefit so much while they (the workers) gain so little, have a look at your standard corporation down the street, in your own city. Most of the time they are turning millions in profit, while their workers will only be getting a small percentage of this.

Lower the amounts, and it’s the same ratio that we are essentially talking about here. Here are my points of consideration: 1. If you don’t provide the outsourced job, then that person doesn’t have the opportunity you are providing, and therefore must look elsewhere to make money. Therefore; win-win. I think it’s imperative to provide a “fair and generous” salary.

I’m just about to start outsourcing myself, and after a 3 month trial period, I will be offering 2x the standard wage (during the trial period I will pay standard wage, but also cover lunch and dinner expenses, as a way to look after them). If the employee is a fast learner and good worker, I will further opt to increase this by another 2x within the first year – so essentially they will be earning 4x the standard salary in their country. This amount is still lower than a local salary for me.

Therefore, win-win again. A lot of people argue that the money is going AWAY from your country, therefore propping up the outsourced country’s economy, as you pointed out.

However, once again, especially for start-ups with no capital – if you don’t outsource, you either fail in your business, or you will take a longer time to become profitable. Therefore, your economy DOESN’T benefit from you in ANY WAY, anyway. Therefore, once the business is doing well (from outsourcing), I guarantee your local enconomy WILL benefit from you, regardless of the fact that you are sending money overseas.

Show me any person who is doing well successfully, who hasn’t changed their lifestyle patterns and way of life. They go out more, they buy nicer things etc etc. To argue that it doesn’t benefit the local economy is redundant. Once again, win-win. In the end, I completely agree with your summary. Greed will certainly bite you in the lower behind. I think the ideal case is keeping in mind a “win-win” sitation for everyone involved.

“after a 3 month trial period, I will be offering 2x the standard wage” I think that’s an admirable goal. But if you really want to make that happen, don’t forget to crunch the numbers properly. Their “standard wage” for employees isn’t directly comparable to earnings as an independent contractor. As low as you might think that person’s expenses are, they still exist — any business taxes in their country that employees don’t pay, basic office equipment, Internet connection, any benefits involved in a typical employee situation there if you really want to treat all things equal (which you have to if you want to make a fair wage comparison), site expenses if they have a professional site to market themselves, fees they might have to pay to bidding marketplaces where you find them, etc. Without accounting for all of those things and anything else that’s a business-related expense (because these people are indeed operating as entrepreneurs in their own right), calculating twice the standard wage would be impossible. And when you’re already paying someone on the far low end of the spectrum, those “little” expenses can take a pretty big bite out of what you think they’re earning. I’m not saying you haven’t already thought about those things or that every example I gave applies to every outsourced worker.

But this is a huge problem we see specifically.