Offshore Wages & Why are we Overpaying like fools on Upwork

J

justalex1971

New member
I couldn't decide on a fancy title for this post, so here's what I settled on. After spending over 8 months digging deep into software developer salaries, I've got some eye-opening stuff to share.

Ever wondered how foreigners and online platforms take advantage of small American businesses with foreign labor? I'm talking about things like why Upwork insists on hourly payments for freelancers, or what the real cost of living is in other countries, or even how much experienced software and web developers actually make abroad. And guess what? You, yes you, as an American entrepreneur, are getting the short end of the stick.

Here's a shocker: In third world countries like India, Pakistan, China, Ukraine, Venezuela, Brazil, etc., workers don't get paid by the hour. So why the heck is there this culture of hourly wages for software developers online?

Before I dive into that, let's set the scene. Most freelancers are from places where the cost of living is dirt cheap compared to the U.S. And guess how Americans are seen? Rich, spoiled, and totally clueless about the world around them. Ouch, but kinda true.

Now, brace yourself: The hourly rates on platforms like Upwork are massively inflated. Sure, $20/hr might seem like a steal to you, but in reality, you're getting ripped off. That $20/hr? That's more than what many Americans earn for the same gig in small towns across our own country.

Let's do some math: $20 x 40 hours = $800 a week. That's $3200 a month after taxes – which is what developers in many small American towns make, even today!

So, why on earth are you shelling out big bucks to foreigners who are less skilled and live in places where the cost of living is a fraction of what it is in the U.S.? You're basically hiring a subpar "freelance" developer who couldn't care less about your project, works whenever they feel like it, and charges you 3x-4x more than what Google pays their engineers in India. Yep, that's a fact!

Now, let's talk about what's really going down here. Most of the workers on platforms like Upwork and Freelancer? They're not exactly top-notch designers or developers. They're the rejects, the ones who couldn't land a job with local or international tech companies.

And then there are these so-called "agencies" run by code-pimps – non-technical businessmen posing as project managers. They hire non-English speaking developers for peanuts, exploiting them to no end. You'll find heaps of them on Upwork, mostly from places like India, Pakistan, South America, and Ukraine.

Oh, and in case you're wondering, my salary and cost of living data are spot on. I've spoken to tons of reputable recruiters and companies across India, Pakistan, Venezuela, Brazil, Chile, China, and Ukraine.

Don't bother with those salary sites on the internet – most of that data is crowdsourced, and you know what happens then? The numbers get pumped up by these offshore coders themselves.

Here's the thing: As Americans, everything we do is in English and out there on the internet for all to see. But when it comes to foreign lands, we're clueless. Their local sites are in languages we don't understand, so we're totally in the dark about actual wages.

Critics might say I'm talking like a privileged American, but that's far from the truth. I'm a foreigner myself who loves to travel and believes in paying people what they're worth, so they can live well – based on their local wages.

This post might ruffle some feathers on a far-left website like Reddit, but every word of it is fact. Freelancer sites like Upwork have created a culture of inflated hourly rates to line their own pockets. But who gets screwed over? You – the American small business owner, the entrepreneur.

You'll be taken for a ride by workers in India, Pakistan, China, Ukraine, or any South American country. Period.

I've painstakingly compiled a list of ACTUAL developer salaries from various countries. Sure, there'll be naysayers and folks who claim my numbers are off, but guess what? They're ABSOLUTELY 100% ACCURATE.

Some might throw around words like "slavery," "racism," "taking advantage of poor people," or "being cheap." But those words mean diddly squat when faced with the facts.

Running a business is all about being smart and frugal, and being aware of what's happening around you. And let me tell you, the cost of living in these countries is dirt cheap. Anyone arguing with my data has some ulterior motive.

So, without further ado, here are the ACTUAL developer salaries and cost of living data from various major cities around the world. It took me months to gather, analyze, and verify this info. And just a heads up: most foreigners looking for work on these platforms fall into the Junior category.

*Cost of decent lunch is when eating out. Cooking at home is a lot cheaper for everyone.

San Francisco, CA:

- Cost of decent lunch: $25.00

- Rent for 2 bedrooms in a decent neighborhood: $3600.00

- Beginner: $7000 per month ($43.75/hr)

- Mid-range: $10,000 per month ($62.50/hr)

- Senior: $15,000 or more per month (assuming minimum $15,000) ($93.75/hr)

Karachi, Pakistan:

- Cost of decent lunch: $2.00

- Rent for 2 bedrooms in a decent neighborhood: $200.00

- Beginner: $250 per month ($0.39/hr)

- Mid-range: $300 per month ($0.47/hr)

- Senior: $900 per month ($1.41/hr)

Surat, India:

- Cost of decent lunch: $3.00

- Rent for 2 bedrooms in a decent neighborhood: $250.00

- Beginner: $250 per month ($0.39/hr)

- Mid-range: $500 per month ($0.78/hr)

- Senior: $1100 per month ($1.72/hr)

Dhaka, Bangladesh:

- Cost of decent lunch: $2.00

- Rent for 2 bedrooms in a decent neighborhood: $150.00

- Beginner: $250 per month ($0.39/hr)

- Mid-range: $350 per month ($0.55/hr)

- Senior: $700 per month ($1.09/hr)

Kiev, Ukraine:

- Cost of decent lunch: $5.00

- Rent for 2 bedrooms in a decent neighborhood: $300.00

- Beginner: $300 per month ($0.47/hr)

- Mid-range: $500 per month ($0.78/hr)

- Senior: $700 per month ($1.09/hr)

Any Major City, Chile:

- Cost of decent lunch: $5.00

- Rent for 2 bedrooms in a decent neighborhood: $235.00

- Beginner: $250 per month ($0.39/hr)

- Mid-range: $600 per month ($0.94/hr)

- Senior: $1100 per month ($1.72/hr)

Guangzhou, China:

- Cost of decent lunch: $6.00

- Rent for 2 bedrooms in a decent neighborhood: $300.00

- Beginner: $250 per month ($0.39)

- Mid-range: $500 per month ($0.78/hr)

- Senior: $800 per month ($1.25/hr)

Caracas, Venezuela:

- Cost of decent lunch: $2.00

- Rent for 2 bedrooms in a decent neighborhood: $200.00

- Beginner: $150 per month ($0.23/hr)

- Mid-range: $400 per month ($0.63/hr)

- Senior: $700 per month ($1.09/hr)

Now, we Americans might struggle to wrap our heads around salaries below ten bucks an hour. But guess what? That's the reality for most of the world outside of North America and Western Europe.

Don't get it twisted though – the salaries I listed ain't pocket change. They're enough to live decently in these parts of the world.

So, next time you're scouting a programmer, coder, or developer for your project, whether it's on Upwork or some other platform from a third-world country, just remember – these folks think you're clueless about local wages.

Share your experiences where you felt like you've been taken for a ride by some offshore worker? Did you overpay? Was the task actually finished how you wanted?

Share your experiences and let's kick off a discussion.
 
@justalex1971 I’m Ukrainian software engineer with 5 years of experience, I’m working for local company rn and they pay me 4000 per month, and this is on the lower end. Seniors salaries are starting at 3500 averall, so you are kinda delusional.
 
@justalex1971 Is your actual goal to spend the least amount legally possible on your business?

Because some of us want to build something of actual value, to invest in ourselves and other people, to build a business that reflects our morals and ethics.
 
@william23 Of course you want to spend the least amount. Do you have unlimited amount of VC CASH?

Successful businesses are the ones that are frugal and not overpaying for goods & services.
 
@justalex1971 There is frugal, then there is the stance that you seem to be taking.

Believe it or not, it’s possible to build a business without actively seeking to pay as little as possible to your employees. In fact, many very successful people would tell you that practice is a recipe for bottomed out workplace morale and employee well-being.

I’ve started 3 small businesses, sold one. In each of these cases, I never once focused on minimizing what I invest in my people. I did the opposite, and I actively looked for ways to share more of the company’s growth with our people.

A company is not the CEO/Founder. it’s also not It’s IP. A company is the group of people that carry out the work and keep/pass on the institutional knowledge that is used daily to plug holes and put out fires.

What you propose is a surefire way to find yourself with a workforce who doesn’t give a single shit about your product and will jump at the chance to pass off your ideas to a competitor. Yes, NDAs exist for this reason, but I’ve watch many of my competitors employees walk into my office and hand me valuable info for absolutely free simply because they were fed up. Many people don’t care about legal repercussions, especially people who are living in escapable poverty due to their employer’s shortsighted business strategy.

If you wish to pay bottom of the barrel wages, don’t expect top results. You’ll get mediocre results at best, and active sabotage at worst.
 
@sarahjamison19

You seem to have lost context. This post is not about workplace or employees.

It is about freelancers and offshoring. Please pay attention.

And if you are implying that your entire workforce comprises of offshore freelancers then you do not actually have a business yet.
 
@justalex1971 No. Successful businesses are the ones that invest in what matters for them. A frugal business is one that cuts corners, most often this ends in an inferior product or service. Sure in the short term this strategy will bring in the money, but long term there’s no sustainability.
 
@justalex1971 Successful businesses innovate and sell, you poor little-brained simpleton... The more you pay for something, the higher the quality, unless you're the government.

I noticed this latest fad of businesses being requested to make more profit, and the only way these imbeciles know how to do this, is to cut costs... This shows that these people should be far away from owning businesses.
 
@justalex1971 Your first paragraph has the source of part of your problem. You can't lump all software AND web developers into the same pay bands. You can probably hire a guy to stand up a basic website for the prices you've listed in these countries. You're way off if you want actual software developed or even a sophisticated web app. I have ~30 developers working for me full time in the US, Ukraine and India, you could double your numbers there and the only interest you'll get will be from people without the skills to build anything more than a basic Wordpress site.

Just picking at Ukraine as an example, a decent mid level software developer is going to run ~180,000 UAH or ~$4,500 a month. $700 per month might get you someone that has done a few basic Shopify setups and some plug and play API work, but absolutely no real software dev capabilities.
 
@justalex1971 I'm a tech recruiter so this is basically my thing. FYI, I do both offshore and onshore placement, so I'm unbiased as to which you want to do. Usually I try not to be critical of other people's posts, but this advice is terrible, and if you follow it your project will suffer.

why Upwork insists on hourly payments for freelancers

They don't. Upwork allows flat fee and milestone based. Try posting a job, you'll see it under payment options. It's just that many freelancers prefer hourly. This isn't because they're trying to cheat you (although there are freelancers who will do that), it's because project time is inherently difficult to estimate, and if it takes longer than expected, they could end up losing money on the deal. It's not just offshore people who do this; most American freelancers also prefer hourly.

why on earth are you shelling out big bucks to foreigners who are less skilled

There are off-shore developers who are skilled at software development. There are also those who are not. The same can be said of US based ones. Your task is to decide which developers are skilled and which aren't. That isn't to say that there aren't advantages to working with US-based developers, but it isn't true that you can't get a skilled foreign developer. If you can't find one, it's because you're not looking in the right places. Or you're offering too little.

my salary and cost of living data

Your salary and cost of living data is totally irrelevant. A freelancer is essentially a one-man business. And a business will charge the maximum amount that the market will bear.

The question isn't how much money does your developer need. The question is, how much can they ask for? That is determined by the law of supply and demand. It's not about left-wing or right-wing or whatever political stuff you're into. It's simple economics. It's how a free-market economy works. The better the developer, the more in-demand they are, and the more they're able to charge. Are offshore devs cheaper? Sure. But they're still going to charge you what they can. As I said, it's supply and demand. The fact that you're paying so little is the reason why you're getting devs who are "less skilled". It's like I always say: hiring a cheap developer is like going to the cheapest dentist in town. You may feel like you're getting a bargain, but it's going to be a painful experience.

Their local sites are in languages we don't understand, so we're totally in the dark about actual wages

Nope. Most developers have English profiles because they want American customers. And sites like upWork post rates in English. Not to mention that there are numerous sites that will tell you average salaries by region. Salaries are pretty open, in my line of work I look them up all the time. Is there some variation? Yep. But that's why you talk to a bunch of different candidates and get a feel for the market.

so-called "agencies" run by code-pimps – non-technical businessmen posing as project managers.

There are some lousy agencies. There are also some good ones. Generally, the value of an agency consists of their ability to provide management. They're more useful if you yourself are inexperienced with managing development projects and need expert help. As with developers, the trick is to do your homework and hire someone good.

One more thing. Average salaries don't mean very much. That's because developers aren't all the same. It's not even a question of junior vs mid vs senior. Different skills go up and down in price based, again, on supply and demand. For example, ASP.NET devs are often more expensive than MERN devs. These salaries can also change based on market factors. For example, when Y2K was a thing, the price of COBOL developers went up because there were a lot of ancient COBOL programs that needed to be fixed ahead of the deadline.

The bottom line is this: freelancers, whether offshore or US-based, are not a charity institution. They're a business. They'll negotiate for the best price they can get. Don't think that they're offering a good rate? Go to another developer. That's how business works.
 
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