I imagine he made a quick set of tutorials for his outsourced contractors and had his virtual assistant he found on oDesk do the hiring and setting up of those contractors.
This quote from the article is wild: "Customers have to train their team and the billing is variable so your cost per lead ranges from $.50 to $5" You can beat that number paying people $20/hr to do this stuff, let alone exploiting people out in the Philippines on I'm sure the not livable wages he's paying them(Aka the fallacy of low rent/cost of living in developing economies).
Sigh... you know we're at the end of the cycle when it's just a bunch of outsourcers with marketing backgrounds.
Let's say a knowledge worker in a developing country could survive on $1 USD a day, adjusting food and rent to local cost.
If a local white collar job paid them $5 a day, and a remote "exploiting" job paid them $15 a day, but an American could earn $50 a day for the same task, is this really a moral hazard?
If that sounds like a fever dream, you aren't alone, but it's my best guess at understanding what's happening. Obviously, my complete lack of employing people in central Africa is why they are all middle class Americans now, so I'm doing my part.
If you start paying people to compile lists for you at a higher rate than they are paid performing important local services, then they will stop performing important local services and start compiling lists for you.
What needs to happen is slower growth.
So foreign businesses outsource to the Philippines, paying them low wages. Then other businesses see this as a good way to save and do the same, and then more businesses and so on. Soon the people in the Philippines have options, and their market starts to become competitive, and they start demanding more pay (which is good). During this whole process they are spending that foreign money into their local economy, allowing it to grow and keep up.
China is a good example.
Note that I use the term lower starting costs of living. There's a reason a lot of people migrate if they can. It's because these countries (like Sri Lanka which is where I live) have costs that suddenly spike the moment you aspire to a better quality of life and the salaries don't keep up.
But I digress. The evidence of the local economies not necessarily improving is there in many outsourced service economy based countries. India is a prime example. And when outsourced jobs started moving away, there were articles describing India's IT industry as a bloodbath (or something similar).
So no. Paying people better actually improves the economy of the country. Especially if it's non local currency. Most countries benefit from inflows of strong foreign currency. People start having less incentive to leave the country so brain drain is less. People can reach higher quality life goals, so purchasing and usage of local services increase (think food and beverage, local tourism, clothing, and even other simple services like laundry).
The idea that US companies paying higher rates is going to wreck an economy of a lower performing country is very unlikely. The reality is that if it somehow became a norm, (unlikely since if rates are high globally, you'd keep the jobs local as much as possible), people would just form new companies to service that market.
Which is technically what is already happening in countries like India and Sri Lanka.
So no. Please pay people better. It'll most likely help that country's economy.
Its literally how the business makes money. Paying them less than their output.
This business cannot exist and at the same time not have more money to pay the people doing the work.
Of any businesses, its necessary to also maintain the capital that gives them the productivity to generate all that value. Even under a marxist theory you cant pay someone what they produce exactly, cuz then they wouldnt be your employee.
Pay people a reasonable wage to live their lives and provide for their families. Just because someone lives in another country does not give a person the moral authority to pay them an amount that does not allow them to properly feed and care for themselves and their family.
This is a false comparison because there's a third option, which is doing nothing. Doing nothing is worse than causing any size of improvement, and almost all of us are doing nothing. If we are to accept that paying Filipino workers slightly more than the local economy is offering is wrong, then we must also accept that not paying them anything is wrong, in which case we should be going after the hordes of people who aren't doing anything instead of the people who are only doing a tiny little bit.
Nothing could really be more damaging to the development of poorer countries than condemning them to subsistence incomes because we've decided it's only ethical for businesses to employ their workers if they're productive enough after all other hurdles are considered to earn Western wages.
It's pretty common to see articles about people moving from SF to the Mid-West, taking a pay cut but being happy because they improve their standard of living.
We also see articles about people moving from the mid-Est to Thailand, taking a pay cut but being happy because they improve their standard of living.
Going by the BigMac index for example, it is perfectly reasonable to think that developers in the Philippines, Vietnam or India would be happy on roughly 50% of a US salary (presumably a non-SF salary too). Obviously this is very much a rough guide, but it's something to start from.
Mike - it looks like you got shadow banned, but it’s not clear why?
Maybe dang can help.
Great story, but may be one reason.
The story might need to have a missing date on it (4 years old?), but the two comments that the author of the post made don’t seem to violate the terms or spirit of HN rules.
If someone can show me how the rules were broken in his comments, I will gladly unvouch.
Thanks for linking to it!