Who Benefits Most from Freelancer Job Platforms

The number of freelancers working have been greatly increasing. In the US for example the number of freelancers have increased to 35% of the workforce which is up 7% since 2013. In 2020 this number is expected to increase by 43% and up to 50.9% in 2027 or more than half the US workforce.

These statistics and more were taken from the article 30+ Freelance Stats – Why the Gig Economy is Growing in 2020 written by Adam Warner on the website Website Planet. The article also stated that of the 170 countries surveyed globally 16% were earning $5 per hour or less, 24% were earning $6-$10 per hour and 17% were earning $11-$15 per hour. This means 57% of all freelancers are earning less than $15 per hour.

The above statistics may be worrying for freelancers who are living in the US where the minimum wage varies from $7 to $13.50 per hour. It is almost the same in Australia where the minimum wage across the board is set at 20 Australian dollars which is approximately $13. This is to consider that there are very few freelance jobs that pay for a full 8 hour work on a daily basis.

In countries where the minimum wage is much lower due to the lower cost of living the situation is much different. In the Philippines for example the minimum wage per day is expected to reach 537 Philippine Pesos which is approximately $11. This means that freelance workers in the Philippines and similar countries can make their daily living from freelancing.

Let us use for example the Fiverr freelancing platform where the minimum price set for a job is $5. Fiverr takes a 20% commission for each job done by a seller. If the seller earns $5 for the job they do then after Fiverr takes their commission they are left with $4. If the freelancer does 2 or 3 jobs a day then they are at the minimum wage range already.

Now consider this same freelancer just increasing their rate to $7 per job which is not too much of an increase especially if the client is from the US or similar countries where $2 is a mere cup of cheap coffee. This freelancer now by just doing 2 jobs a day can make more than minimum wage for example in a country like the Philippines.

No wonder as the statistics show the price range for freelancer jobs are in the majority of less than $6-$10 per hour. The freelancers who can charge at these low rates and still meet or even exceed their minimum wage earnings are at an advantage.

There are freelancers from primarily western countries where the minimum wage is high because of their high standards of living who like to complain and even insult freelancers who have such low rates because they say that they are creating the “Race to the Bottom” situation where rates are so low that everyone suffers.

But the freelancers from countries where the standards of living are low are not suffering but are even treated to higher compensation and because of this a better life.

There are western based freelancers also like to point out that the lowly paid (according to their standards) freelancers from countries with low standards of living produce low quality work because of the low pay. This is not true. Many buyers of freelance services use these freelancers from these countries and if they underperform will not survive long as a freelancer.

There will always be undesirable buyers and producers of products and services. This is the same for all industries even in the freelancing industry.

There are even freelancers who after winning a certain job just subcontracts the same job to another freelancer who has lower rates than them. For example if one freelancers wins a job with $10 as their rate they subcontract it to another freelancer for $5. They do not do any work and still gets to earn $5 from their activity.

There are still other complaints from some western based freelancers that non-western freelancers are not proficient with the English language which affects the way they communicate with clients and also diminishes the quality of their work. While it is true that these freelancers have not mastered the English language the way locals do this handicap is greatly diminishing.

There is now a move from non-English speaking countries to make their citizens especially those involved in online work to be proficient in English both in writing and speaking. Even now there are many call centers in the world staffed by English speaking employees whose English is almost at par with western standards that they primarily deal with Western clients.

For example the Philippines is an Asian country with English only as a second language but they speak English so eloquently that they became the call center capital of the world. As the online world and all media globally is immersed in English more and more people will master English until almost all people will have a certain proficiency in English.

Conclusion

So who benefits most from freelancer job platforms? There are two groups. The first group are the buyers of the services who will increasingly get more quality and quantity for the amount they paid as more and more freelancers from countries that can provide lower rates for the same jobs as their higher paid counterparts enter the industry.

The second group will be the freelancers from countries that can provide lower rates for their services while still earning and exceeding the minimum wages of their respective countries. They are the true beneficiaries of the freelancing industry from the workers perspective.