Adjusting to the Flattening of the Country

My consultant friends want to talk about what Elance could do to their career about as much as my single friends want to talk about who will be changing their diapers in 30 years. (No. Paying someone to change your diapers is no way to live or die.) As Elance, Guru, DoMyStuff, oDesk, Mechanical Turk, et al. get more well-known and improve, the pay rates of US-based urban service providers (lawyers, designers, writers, programmers, bookkeepers, and marketing people) is going to plunge.

This started with programmers but is moving into all sorts of service providers.  20 of the people in your accountant’s 40-person firm may already be being booked through Elance. Programmers who get $80/hour around here only get $15/hour on these sites. Very very few lawyers are getting $100/hour on Elance. To test this simply sort Elance “Professionals” by (your) skill, then by pay rate, and then try to find someone getting any work at anywhere near what you’d want to get paid.

With the idea of picking up projects on these sites looking unappealingly low-paying, posting projects on them seems a logical turn. Those who win contracts locally will do well by staffing them globally – or, even better, staffing them in rural America. Those who used to perform that skilled work locally will lose out. For now, some may be able to under-bid their local competitors for contracts and make higher profits marking up (for example) a programmer’s time from $15/hour to $65 rather than marking up from $80/hour to $125 that’s typical today. One could pay $35 and mark up to $85 and still out-bid local-sourcers. Yes, working through such sites is a major change in methodology but learning how to manage remote staff sure seems like the way things are going.

And don’t think this is about offshoring (with all its unpatriotic connotations). A huge percentage of these people taking work on these sites are Americans who are willing to work for these lower rates. The electronic lowering of geographic boundaries is helping rural Americans take work from urban Americans. I imagine an Iowan 24-year-old who learned php on YouTube coding while in the cab of his auto-piloted combine. A lot of what is changing is not about Thomas Friedman’s flattening of the world; it’s the flattening of the United States.  

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