Spreading the Savings
WHY YOU SHOULD CARE
Maybe we need another way to look at overseas freelancers — not as undercutting Western workers, but as lifting an entire continent.
The American freelance economy is booming — not just for coders but also for writing Web landing pages, miscellaneous writing, editing and similar tasks posted on find-work sites like oDesk and Elance.
But this is no USA-dominated marketplace. Increasingly, low bidders in the global South are beating their American freelancer competition, bidding pennies on the U.S. dollar for tasks posted in the reverse-auction style marketplace.
And it’s booming. For bootstrap professionals on one continent, there’s great news ahead. According to the Africa experts at the Rockefeller Foundation, by 2015 — only a few months away — Africa’s market for online jobs is predicted to reach $5 billion.
That industry of online work is a big one, including jobs that range from writing a simple landing page for a small business website to $15,000 consulting posts for occasional back-end programming problems, for workers with a variety of backgrounds. Freelancer sites allow businesses to post a job, including a pay range, language criteria, time-zone needs — and then allow contractors to bid on the work. There are elaborate rating systems for both sides, including online payments and contracts completed.
Say you’re Mr. Furniture Store Owner and all you know know about the Web is that you should probably have a site somewhere. You can simply post your job and budget on one of these sites, and wait for the bids to pour in.
Or, if you’re a graphic designer with a passion for home interiors but no contacts in that realm — voilà! You see Mr. Furniture Store Owner’s job post. Your dream client just arrived.
What is a woman at an Internet cafe in Nairobi really taking home compared with her American counterpart, if 30 percent of what she earns goes to connectivity fees?
Of course, $1 goes a longer way in some countries than others, and someone in India — or, say, sub-Saharan Africa — can underbid their Western counterparts and still make far more bank than a local job could offer.
The average Kenyan freelancer working on Elance earns $15/hour (compared with the national average of $5 an hour), according to the Rockefeller Foundation’s findings. And 60 percent of Africans working through oDesk earn at least half of their family’s income that way, Rockefeller says (citing numbers from the freelance sites themselves). If that’s true, that’s a lot of money to feed the local economy and boost the local professional pool.
But all the online jobs in the world only go so far if potential workers can’t access the Internet to begin with. In some developing nations, access to broadband can swallow some 30 percent of a worker’s income. By contrast, in the developed world, the cost runs closer to 1 percent of income. Americans may feel undercut by these overseas workers and their low cost of living, but the actual math isn’t so simple — what is a woman at an Internet cafe in Nairobi really taking home compared with her American counterpart, if 30 percent of what she earns goes to connectivity fees?
Another obvious downside of online freelance jobs, as the Rockefeller experts note, is that they don’t include benefits such as health coverage, offered by more traditional positions. That ultimately costs workers as well as society at large, which covers the cost of hospital visits and the like.
So, can the huge online work wave really save Africa?
Maybe. But maybe you don’t really need computers to force the future when half your continent’s population is under age 25 and increasingly digitally native. Which means Africa’s youth’s paychecks may increasingly come, bit by bit, via gigabit.