Recently a barely known blogger named Stuart Robinson posted an article on his blog calling offshore outsourcing a newly named version of slavery.
The only problem with his slander was that it wasn’t backed up with any research. His beef was that 20,000PHP was “pitiful” wages for a Filipino worker. Before I serve up a piledriver’s worth of researched rebuttal, I want to point out that actual Filipino workers are agreeing that 20,000PHP is a good wage (that was just one example of multiple).
What Makes A Good Wage?
Before we start looking at wages we need to have something to compare them with. So I want to know if you would agree that a Governor of any U.S. state makes a respectable wage. I’m not talking about lavish riches either I’m purely just talking about respectable enough to not come even close to feeling like slave wages.
Ok so if a Governor would have a respectable wage let’s take a look at the average salary of a Filipino Governor. You’ll see that their wages start out at just over 28,000PHP per month which is higher then the 20,000PHP that I start my assistants at. However, I think and hope you would agree that a Governors position is just a few job classes above a writing or data entry position.
Now we have to look at something that compares a little more closely so I picked a Graphic Designer. Their daily job requirements would be quite similar to what I assign my Filipino assistants. So we check with Payscale.com which is one of the largest salary reporting websites for the average wage of a Filipino Graphic Designer.
We can see through Payscale.com that their average wage is about 180,000PHP per year or about 15,000PHP per month. Which is 5,000PHP less then what I recommended starting out your virtual assistants at.
Is This Slavery Then?
Let’s take a look at Wikipedia’s definition of slavery…
Slavery is a form of forced labor in which people are considered to be, or treated as, the property of others. Slaves are held against their will from the time of their capture, purchase or birth, and are deprived of the right to leave, to refuse to work, or to receive compensation (such as wages).
That definition sounds a lot different then my Filipino assistants living conditions where they make more money then Graphic Designers, work from the comfort of their own homes, get weekends off, and even have paid holidays off.
What Do My Assistants Say?
Ailene my top contracted assistant now makes a little more then 26,000PHP per month since she has been with us long enough to have had pay raises. That money is enough for her that she buys farm land as investments with her leftovers. She also said that she sometimes gives those land investments to her family members just to help out.
Just last month Ailene came to us asking for a day off because she was going to go see a dentist. Of course we said it wasn’t a problem and then she told us that the last time she was able to see a dentist was 20 years ago. That she or her family just have never been able to afford things like that until now.
Now the only thing left to consider is whether it’s ethical to be hiring oversea’s labor when our own economy is in such shambles. From what I have heard our economy isn’t where it’s at because of outsourcing but instead because of greedy banks, mortgage investors, and large corporate CEO’s spending budgets too recklessly and bending the system too far.
My stance on oversea’s outsourcing is that a business owners primary job is to always be looking for the highest ROI leverages that he/she can get. Whether that be from advertising sources, bulk ordering vendors, or their own employees. Anything else becomes the business owners personal preference as to how they have designed their brand.
To say that outsourcing is just a renamed version of slavery is asinine though.
Go Bigger,
Justin Brooke
P.S. How do you feel about hiring oversea’s labor? Is it even a question of ethics? I wanna hear your opinions in the comments below.
{ 83 comments… read them below or add one }
Slavery?
that’s the stupidest thing I’ve ever heard…
Your helping the filipino people out by hiring them…
The unemployment rate there is really high and I think what your doing is not only great for your company but great for the people of the philippines…
Keep doing what you do
Have a nice sunday!
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As usual the people that say all this “outsourcing is bad” crap have no idea what they are talking about. I outsource some things, do some myself and often hire Americans as well. If I didn’t outsource some of my tasks overseas, I wouldn’t be able to afford the Americans for any project. These doo gooders think that it’s a 1 for 1 trade when in fact it’s not.
Yeah what’s even funnier is when the ones shouting “Hire more U.S. workers” don’t actually have any U.S. employees of their own! If they do it’s a different story but I’ve found about 90% of them don’t.
This is a great topic to post about… very controversial, so this could be fun.
I have had long debate with some friends over this b/c they were giving my crap about having 2 Filipino employees.
So many people don’t look at it as being a Win-Win b/c it’s affordable for us, but still great money for them…
People just see it as us paying them lower than what we would pay an American and that we are taking advantage of them.
It’s always funny to me though, because topics like this are what separate the people with the entrepreneurial mindset from the ones with the employee mindset.
Good stuff!
Matt
I used to be shy about it until I hired a U.S. worker for $10 an hour and they were the laziest person on my staff. For me it’s all about man hour power and ROI… Who gets the most done for the dollar. A business is a life and if you don’t feed it then it dies. I just haven’t found a U.S. worker who can compare to my Filipino workers and justify the higher price.
If you want to get paid more money then someone else you have to be willing to do more then someone else. Right?
Justin – even my wife, who is Filipina, agrees; Filipinos (and non-Americans in general) just have a better work ethic. Anyone who watched the Pacman / Hitman fight last night knows that first hand. Did you hear Pacquiao’s comments when he won? “I was just doing my job.”
Liane
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I haven’t really been shy about it. The friends that give me crap about it also hate Wal-Mart b/c it too big and successful. They are the greed envy type people that taking over the US.
I agree with you completely. When I was hiring a virtual assistant, I had people from all over the world apply. I clearly stated it would be very simply data entry type work.
Their requested pay ranged from $1/hour to $30/hour.
Guess where the $30/hour person is from? United States.
What would she have done MORE to earn that $30/hour… because the job I described was no where near being worth $30/hour.
And for the record I don’t always hire the cheapest. I ended up hiring someone for $6/hour on that one.
The blogger you are talking about is missing the point. The offshore labor is loving having an income. Case closed on that issue.
The problem is not who is doing the work, rather who is not doing the work – American families. Now, more than ever American families need an income. How nice would it be for an American to make $10.00 for a well written article, or get paid a decent amount for a web page etc.
Maybe those at the top of the food chain would have to settle for making slightly less than a fortune so that talented hard working Americans can earn a living instead of watching foreign families earn a nice living.
We need to take care of our own. This isn’t charity – I’m talking about hiring talented people at a decent wage, or fee.
How can we compete with foreign wage scales. Sound familiar? This is happening in every industry that can do it – and it will become a liability when that cheap labor is also your market.
Good points, how many U.S. people do you have on staff so far? I’ve been thinking about hiring more because people say while they are higher priced they churn out 4 times the work.
I’m all about ROI, price doesn’t matter to me. If a U.S. worker can produce 4 times the work at $10 an hour that a $4 an hour Filipino can then that obviously would be worth it.
How are your U.S. workers doing for you Tom?
Right Justin, we Filipinos are really hard worker , we work hard for our money. Besides admit it or not Filipinos are very talented and skillful like Pacquiao, Lea Salonga, Charice Pempengco and many others. Throw us in the sea and we will survive, one of our secrets? patient and determination.
For me that is not the question. If the offshore lobor is working for you it is probably becuase you are the best choice for him/her.
On the other hand, is nationalism the answer to local income problems? Probably not.
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This is classic apple pie economics. Those that don’t understand the advantages of out sourcing, don’t understand economics. They believe that the apple pie is only so large so if you eat a bigger piece then someone gets a smaller piece. Therefore if you outsource, then you are giving a piece of the pie to an “outsider” and there is less pie for the American. But what they miss is that you can always make a bigger apple pie. That is the entrepreneurs job, make a bigger apple pie. By contracting out to a cheaper form of labor the entrepreneur can make his apple pie larger and therefore that helps everyone. Remember that in order for it be worth to hire the Filipino at $400 a month, the entrepreneur has to make more than $400. Well that money comes back and grows (the bigger apple pie) and it will go into the economy where it best suits the entrepreneur. If the entrepreneur hired an American at $400 then their chances of making a profit goes down significantly and therefor the job disappears and no one makes money.
Hopefully the dense can figure out part of the lesson from above.
Scott
Dude your comment deserves a double virtual high five! Never heard anyone explain it better, thanks.
Ah Justin, I must comment absolutely comment on this one!
Being myself located in Asia, and having factories in Thailand I have faced cases where some of our competitors from America where slandering us, accusing us of using child labor and stuff like in Asia and this why you should get their products made in America.
Well the reply where very straightforward to me.
All my employees work in fully air conditioned rooms, have their meals freely provided by my company, the computers are all equipped with LCD monitor and using optic fiber connection… and yes, they are all over 18 years old. It’s no longer middle-age time!
And regarding the wage difference, in Thailand you can rent a 200 square meters house with 4 bedrooms for less than $100.
In Malaysia, for the same price, you’ll have a 25th storey condominum with 3 bedrooms, private car park, swimming pool, fitness, tennis court.
The living cost is very different. A worker here in Asia with $200 can have a much better living standard than a worker with $2,000 in America.
It’s different worlds and you can’t compare. Can you just imagine yourself giving $20,000/month to the receptionist just to match up some salary standard of another country?
That’s not the way things work, nor what the workers expect either.
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Personally i think outsourcing is great, and while I do most of my projects my self, outsourcing has really helped me number of times.
Regard hiring oversea’s labor. I am in UK and have hired Americans few times and other places like from philippines, and indonesia. As Matt Davis put it above it is a Win-Win because it’s affordable for us, but still great money for them.
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Justin,
What I think is sad is that you feel that you have to justify your actions as a business owner. You are absolutely correct in that as a business owner, your first obligation is ROI. I don’t hear these nay-sayers saying that you should spend money on unprofitable PPC because Google employs Americans. And you are right about how many US based employees they have.
I think a lot of this animosity about outsourcing comes from the corporate environment, from those same companies that caused this current economic downturn. Along with my marketing business, I also contract to large corporations as a project manager, as does a business partner of mine, and I’d like to share some experiences of that with you.
A recent project on which my partner worked, she witnessed a Fortune 50 company moving US jobs offshore to a few different locations, including Russia, India and Costa Rica. The programmers who were working on the project could not speak much English in most cases, and in some cases were forbidden by their local laws to allow US computers to connect to their system, though they had full access into the network in the US. She was on more than one call where programmers in the US with 10-20 years of experience and often years working on the system being outsourced had to try to transfer their knowledge to these offshore workers.
While that was an unusual situation, I often work with offshore workers in my corporate projects where they not only don’t speak English, but are trying to learn the system as they go along, while the one or two US workers are doing the bulk of the work, including cleaning up the mess created by these offshore workers. That is very common.
With all of that said, those decisions by those very large companies have nothing to do with ROI or operational efficiency. Rather they are based on only one thing – low cost labor.
That same business partner from the story above was dead set against hiring an offshore worker based on past experiences. However, when we started working on a recent project together, I was able to demonstrate to her how we could get a worker in the Philippines who could speak English, was hard working and would be able to do the work. It took some convincing, but we are now in the process of hiring just such a worker.
This is a programming job on a fairly large scale, so we will be spending much more than the 20k PHP you mention above, but still far less than a comparable US based worker.
To go back to the first thing I said here, I do not apologize for hiring someone offshore. My business puts bread on my table, and I will not be held to someone else’s idea of right and wrong (within the law of course) to do so.
These are the same people who believe in the discredited communist economic theory that to make money you have to take it from someone else. And part of the reason they believe that is because they haven’t the first clue about how to actually make money unless someone else gives them a job, and all they can see in outsourcing is their job going somewhere else.
Sorry for such a long comment, but I feel very strongly about this topic.
Keep up the excellent posts.
Cheers,
Chris
No brother… Rock on! Loved every bit of your comment.
Hey Justin,
My wife is Filipino and some of her siblings are still in Manilla. But I am familiar with what wages are over there. Last time I checked, I think the Peso was about 45 Pesos to the US dollar. So if you head to Manilla, you can live like a king. But with what you are paying for outsourcing, I would say it is very respectable. And I think the only person to really complain would be Stuart Robinson. I don’t know him, but that name doesn’t sound very Filipino.
Besides, the 20,000 that you are paying your writers and designers are just one source of income. These people do this stuff all day long on a freelance basis, and if they juggle a dozen jobs at once (which is very doable because by background is in graphic design), then that is very decent wages.
Anyway keep up the great work and if you need any design work, I can help you out too.
Eddy
Hey Justin,
You pretty much summed it up here “a business owners primary job is to always be looking for the highest ROI leverages that he/she can get.”
So, with globalization and the internet if people find ROI elsewhere that helps then keep their costs low (in an ethical manner, ofcourse) then, there is nothing wrong in hiring the outsourced services.
The playing field is open – may the company that can optimize their resources win! Protectionism never worked.
Cheers!
Sahil
PS – Outsourcing has been going on in the Product business for years (car manufacturing etc.). Its surprising that people have a problem when its moved to services.
BOOM! ROASTED!
http://boomroasted.com
hahah
Hey Justin
What a lot of rot about slavery.
And I don’t subscribe to the theory that you are depriving American families by sending work offshore.
I think if you take the extra ROI that you feel you can make offshore and then reinvest that back into the American economy then you have indirectly created extra benefit and jobs for American families anyway, even though you might not be directly employing them.
Maybe if you rename the World Wide Web to the American Wide Web then you should keep your employees onshore.
AWW does not quite have the same ring to it as WWW!!
Steve
PS Don’t take me too seriously. Nobody else does.
Hey Justin, Outsourcing is not slavery. Outsourcing is one of the smartest things that can be done by an entrepreneur these days. From IM to site design, outsourcing is the way to go and if people are agreeing with the wages then it doesn’t even classify REMOTELY as slavery. Btw. Thanks for the new site.
Jason
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Hey Justin,
This is Naimath from India. I could somehow relate myself to this post as I worked in an American based multi-national company in Hyderabad, India. I think, I would agree to what you said in your blog post. Oversea’s outsourcing is not another version of slavery, but it is an opportunity to those needy and for the company to make hansome money.
This statement – “business owners primary job is to always be looking for the highest ROI leverages that he/she can get. ” pretty much is the answer to Stuart Robinson’s allegation. And, I believe, as long as an employee from diff country is encouraged to learn new things, supported during his tough times, respected and most importantly paid according to his expectations, then it is not slavery but profitable business.
Regards
Naimath
P.S: I’m pretty new to Internet Marketing, and to have the privilege to go through your blog posts at this early phase is like an honor for me.
. Keep up the GREAT work. 
It’s interesting to study countries and what people think about outsourcing.
For example, if you look at the CIA Fact book website, it tells you about the USA:
https://www.cia.gov/library/publications/the-world-factbook/print/us.html
Here it says, our average salary for a US Person is about $47,000 a year.
When you look at the Filipino entry here:
https://www.cia.gov/library/publications/the-world-factbook/print/rp.html
You can see their average salary is $3,300 a year.
So people like Justin myself and other who use virtual assistants for labor are really paying people a good wage in the country where they reside.
At this salary – $3300 a year is only about $275 per month full time.
We average about $225-350 a month for our virtual assistants in the Philippines. So in some cases we are paying MORE than the average and some lower, with the intention of increasing payment as skills and efficiency develop.
The whole “buy American” is really blown outa proportion. I buy American stuff all the time. But I also support a world wide financial ecosystem. It’s all connect somehow, some way.
Keep up the great posts Justin!
Jeff Mills
http://outsourceworkshop.com
Dang I love this topic. My dad is an offline entrepreneur, and he wanted to start a coffee plantation in Nigeria where he would pay the workers only a couple dollars/hour. (I can’t remember the exact details). He would be providing jobs for people that otherwise wouldn’t have jobs, and he would basically be putting food on the table for them. It wouldn’t be as high paying as what you are mentioning here (and what I pay my employees), but it is still much better than not having a job at all, and the people would be working there on their own free will.
However, he never followed through with this because his friends simply could not understand that what he was doing was not slavery, and that he would have been helping many people survive and escape starvation. They basically thought he was a bad person for even thinking of doing such a thing.
I have been in a similar situation now. I am 18, and I have multiple employees in the Philippines. When my friends ask me about my business (which in itself is difficult to explain), they often find out that I have employees that I only pay a couple hundred dollars a month. The employees I have are quite happy with their pay, and they love working for me. However, it takes quite a bit of explaining to my friends to make them understand that I am actually making their lives better by paying them what I do. I usually have been able to make them understand though, so they think I am actually smart, not evil.
Like you mentioned, the only issue then is why not hire Americans and help them out in these bad economic times? My response is usually along these lines:
“I have nothing against hiring people in North America. I just hired my brother to work for me. However, most Americans are lazy and believe that their work is worth a lot more than it is, and many believe they should be able to get rich without doing anything. Americans are often lazy, and would rather eat McDonalds than do 20 minutes of hard work, even if they have no money. Filipinos are hard working, and are very willing to work hard for me and actually get things done, so why would I hire someone who doesn’t want to work over someone who does? Besides, many of the people who are feeling the economic pinch are having money issues because they did not manage their money wisely. Why should I work hard to fix their mistakes?”
Now, I understand that their are Americans who have been laid off and there is nothing they could do about it, but most people who have no money are broke because of their own doing, and I see no reason why I have to fix their situation for them. Also, the more money I make, the more I spend, and the more I put back into the economy, so I am indirectly helping all these people by hiring Filipinos.
Lastly, I don’t care what other people think. I am 18 and I am making more money than a lot of adults, and most of my money is made by helping others and providing people with jobs. What’s wrong with that?
Shawn
Couldn’t agree more, I am in Australia, but also find Australian workers want 10 times the money and only do the job half as well as a grateful worker in India or somewhere.
I was just wondering though, do you recommend any outsourcing sites to find your workers? or have a blog post about it specifically?
Sorry I am only an occasional reader of your blog, which is good stuff, I just don’t get the time to read everything.
BTW your “Add Comment” Button is really hard to find, it looks like a field, not a button.
Hi Justin,
Love your aricles, especially the ones about outsourcing. The problem I am facing is that I am finding it hard to advertise for an assistant. I followed your CL method of posting the job advert but CL just seem trigger happy and delete the ad which is annoying.
I’d love to be able to find the right person – any ideas where I can advertise my job opening?
Thanks in advance and please don’t stop with the outsourcing articles – love ‘em.
Michael
Hi Justin,
The comments Scott made have echoed my thoughts exactly, he is spot on!
The profit made by many business owners like yourself will most certainly find its way back into the local economy helping people retain jobs etc. Keep doing what you’re doing Justin, it’s all good.:)
I’ve read Stuart Robinson’s post. While he seems to be genuine in his desire to help his readers keep their hard-earned money, and he seems genuine about the potential for exploitation, I agree with you that he is only presenting part of the picture.
Second, your general point (and Stuart’s) is that outsourcing is done by most businesses – offline and online – almost every day. Go to your corner store and you will find that a large proportion of the products sold don’t come from your native country.
Third, I believe my fellow countryman has inappropriately bashed you. I’ve been reading your blogs, posts and emails for a few months and never once have you suggested that by outsourcing you provide a poor pay for extended hours with onerous conditions with the intention of profiting at another person’s expense – indeed, quite the reverse. Are you profiting? Absolutely … and that’s why you can offer paid employment in the first place. Is it at their expense? No!
Fourth, I agree with your point about slavery. While you may have totally fooled me (although I don’t think so), my guess is that you don’t force potential workers to work for you, and nor do you offer conditions that are injurious or that they could not refuse.
Fifth, and on a slight tangent, perhaps those in favour of only sourcing locally would like to consider only purchasing goods and services created from their own country. I can’t speak for America/ns, but certainly in Australia, if we did not outsource that would mean the majority of the population would go without clothing, much of our food variety would disappear, virtually all electronics (computers, phones, TV) would not be available … you get the point. Even if we did manufacturer these things from our own raw materials [are we exploiting the employees who mine the raw materials overseas?], the costs would have risen so much for all sorts of reasons that it’s arguable that the only people able to afford them would be the ones manufacturing them in the first place (cf SEO Guy’s excellent “Apple Pie” post above).
Finally, it’s easy for someone online to anonymously slang off – but it takes a “real man” to “take the high road”, so my thanks for bringing this matter to your readers with maturity and honesty. I do caution you not to get into a slanging match about this – it won’t serve either you or us well. Rather, brush it off, and keep up the good, “honest-broker” work and information you are providing.
Justin,
I’ve been working online with people from overseas since 1994, when I first started http://selfhelpmagazine.com
For 14 years, then, I hired and trained over 300 volunteers from every continent.
When I decided to monetize the site last year, I didn’t “feel right” about continuing to ask people to work as unpaid volunteers. I began asking our volunteers if I could pay them for the same exact work.
An interesting thing happened…people from overseas wanted an average of $15 a day and get this — people from the US wanted from $35-$75 an hour.
After all, they all had apartments or mortgages to pay for, new MACS and cars to pay off, diamonds and wedding and honeymoons to think about, or children and the highchairs and clothes to pay for etc. or retirement looming overhead.
Do you have any idea how much advertising and affiliate product sales would be needed to cover all those expenses? (That 1 site alone requires 50 – 150 hours a week to maintain and grow).
I am telling you all this to say that when web developers were working for me as volunteers, no one complained about where they lived. Now that I want to pay people, some people say I should only hire US workers??
I agree with you, Justin and say to the critics: Wouldn’t only hiring US workers be “unfair” to all the overseas people who either volunteered for FREE for over a decade or are willing to live at home, raise their own roosters and chickens; live without an automobile, don’t insist that I help them pay for a new MAC or PC every year; or just basically live much simpler lives?
Stated simply, we are living in an ever increasing competitive world marketplace. Get used to it.
Here are a couple other things of possible relevance learned as a licensed psychologist/psychotherapist for over 30 years:
1. there are 2 often very different sides to every issue, and
2.working with an attitude of “live and let live” keeps me a whole lot happier in the long run.
And thanks for all the great work you are doing!
Dr. Marlene
Hiya Justin
An interesting post with some great points. Some people just see globalisation as all bad whereas others see it as all good. I like to take a pragmatic view of business and people and weigh up the main pro’s and con’s.
There are all sorts of checks and balances that get applied to businesses at least normally. Suggest we leave the current Banking/Finance crisis out of it for the time being (that’s for another post);-).
Some globalisation and outsourcing by big business has appeared or looked a little on the cheap side. In the UK we have been shown documentaries of people in India working in sweat shops and seeming to get very low wages. I haven’t personally been to India and can only hope the the documentary was fair and real and not edited to suit the film makers.
In the main I do believe that business owners who are what I would class as small businesses would use outsourcing because it is the smart thing to do. If someone has taken the time to look at wage scales and pays a fair wage for the region I can see no reason not to do it.
Paying wages which are significantly above what someone could earn locally can actually be bad because it creates inflationary pressures.
In the UK a lot of people are losing their jobs right now. If I had a position open I would naturally consider working with a fellow compatriot but only if they can do an equal or better job for an equal or lower amount of pay than anyone else. Anyone else based anywhere in the world.
Return on investment is critical for any business, there are of course other considerations like language, communication and so on but I would factor that into my ROI.
Necessity is the mother of invention and whilst I agree that we should have some sort of welfare state to protect those that can’t protect themselves. There is a danger that people will just rely on handouts and not seek other ways to make money.
Countries that at one time were on so called low wages have now moved on and wages have increased massively as has their standard of living. As more people use outsourcing it does start to create competition and wages will start to rise until an equilibrium is reached.
Outsourcing is nothing to be ashamed of provided people are treated with all respect for them as a fellow humans and vice versa.
Long live people centric entrepreneurship. Long live Justin who seems to me to be a great entrepreneur and a great human being.
All the best from a slightly overcast and cloudy UK:-)
Steve
Well said Justin.
That was a ridiculous insult thrown your way and I’m glad you didn’t let it go without a rebuttal. I too, would like to outsource to the US, but this is a global economy now. The fact is that what most American’s don’t realize (at least the ones making silly accusations like this) is that you are providing a job and an increase in lifestyle for someone. No, not an American. You can’t compare our expectation of wages in the US with that of overseas. All of this stuff will work itself out in time as the natural economy seeks it’s own balance. The way our dollar is devaluing and the way our unemployment is rising, China may be outsourcing their tedious work to Americans in a few years…
Do you and every other American that performs an outsorucing contract have an ethical obligation to understand the value of what you’re paying in relation to quality of life in the target county? Absolutely. And obviously you have done that.
I have seen others paying around $625 US to Philippines workers, but those are through employment agencies – not direct hires. I have to wonder just how much of the money is actually making it to the actual employee, but I doubt it is more than $400.
Justin,
What you do, and many of us that outsource overseas is great!
Let me tell you, my sister lives in Bosnia currently and she took a job few months back for 350 KM per month, which is around $270 per month.
She worked for almost 3 months, she never got paid! She was never home around 10 hour shifts! No health benefits, or anything else, since they never paid into the fund.
So she quit! She only regrets not have the computer and English skills, otherwise she would be working for me
So when we outsource, we feed so many mouths. We in return are helping the world become a better place.
If I outsourced in US, I would never be able to feed one mouth properly, and I would need to find another way to earn more money if I paid $15-30 per hour, so instead of helping recession, I would be hurting it even more
Ivana
Hey Justin,
Don’t get me started on this topic…I could write a book.
Let’s just say that I agree with your position and many of your commenters have left very compelling arguments and I don’t have to beat that horse.
Take this a step further and look at the salary schedule you linked to. Teachers make approximately 11,000php/mo, principals 15,000, registered nurses under 10,000 and police CHIEFs 21,000.
If someone wants to bitch, bitch to the Filipino government about how they prioritize those occupations that we hold in such high esteem in North America.
Plus these workers that you employ work from home. They don’t have to buy “office” clothes, pay for transportation or waste time in a commute. Heck stay at home moms can keep their kids at home and work their schedule around their family.
You are giving these people the opportunity to pursue their dreams. You and everyone like you should be hailed a hero instead of being shit on by the lowly idiots that think someone should hand them something just because they can fog a mirror.
I grew up in an automotive town where people made $80,000 sweeping floors and they’d sit around drinking beer with their union buddies on weekends (and in the parking lot at lunch time) bitching about the big bad companies that employed them.
Somewhere in the early 1900′s Americans began to value being an “employee” over entrepreneurship. It’s built in to our entire social and economic structure.
Ever try getting a loan from a bank as an entrepreneur? Your employees stand a better chance.
Do you get rewarded for hiring an employee? Nope. You get red tape. Tax remissions, workmens’ compensation, and a host of labor laws yadayadayada.
This is more than an argument about outsourcing. It’s an argument against a whole engrained culture that you can’t win by debate.
You can’t convince an idiot they are an idiot.
And you do NOT have to justify your actions.
You and everyone like you not only feed your family, you make the entire world a better place (not just the US).
Everyone give yourself a pat on the back, keep doing what you’re doing, do more of it, and ignore the naysayers…unless they provide you with motivation.
Tobi
PS. Not that it matters one lick in the big scheme of things but in case someone questions my credibility, I have earned an MBA after earning an honors undergraduate degree in business and economics. I can draw all the pretty graphs you want.
You can justify all of your actions on a global economic scale.
Any economic arguments against your position hold very little merit.
And the philosophical and ethical arguments are merely a matter of opinion and perspective.
You are taking the perspective of an entrepreneur who is creating wealth while they are arguing about how it “should” be distributed in their eyes. (the pie argument)
The very fact that the Filipino or whoever takes the job on speaks for itself. With the wage scale you provide it looks like these assistants are doing very well
What if the outsourced worker who creates content is so busy he then has to outsource to fellow countrymen/women to create content for him, is he then a slave master too. Or is he providing an income for other families so that they may also better themselves.
The internet has provided almost everyone on this planet with a golden opportunity to provide and purchase services and products that will enhance their lives and improve their education, all from the comfort of their own home.
Lets say, with the investment you pay the Filipino assistants, you build an educational content product, you sell it on to make a profit as you should do.
Others who purchase this content use it and also make a profit from the information learned. You then have not only kept your Filipino assistants happy but countless others from all corners of the world. This is the power of the internet and a tool that could help drive the global economy out of recession, all from 20,00PHP investments made by yourself and others.
Justin,
This post has been very enlightening. I used to view that outsourcing to other countries didn’t make sense because you weren’t hiring Americans. Take care of our own first. However, over the past few years I’ve definitely changed my thinking. And these comments have only reinforced that that change was for the better. I agree with the ideas that outsourcing does help someone else and as a business owner, when you make more money it flows back to the US economy anyway. I know shortly I will be in a situation soon to hire my own offshore employees.
So, congrats to all of you who have off shore employees. Keep your businesses growing and keep disputing the inexperienced uneducated nay sayers.
Leslie
Leslie’s last blog post..Targeted Web Traffic – From Where?
Weak minds opt for demonetization over adaptation. Is just laziness, this has been going on forever and will not stop. His conclusions are the result of mental gymnastics in which he has convinced himself that his drive comes from morals when in the end its just not wanting to compete.
Stuart Robinson is an absolute MORON! I have two employees from the Philippines and I pay each one of them #250/month. Doesn’t seem like a lot – unless you know that the average Filipino wage is $1100 US PER YEAR! This means they’re making $3,000 US per year – almost three times the average wage … enough that both of them have bought houses in an ‘upscale’ subdivision.
One day I was talking with them via IM and they were both extremely upset. They’d heard that Obama doesn’t approve of outsourcing and were very worried about their jobs. Does that sound like the reaction of a slave?
Besides, the definition of slavery = no choice. They both have a choice and they both want to work for me. If they didn’t want to, all they had to do was say “no”.
Robinson is a totally fuzzy headed thinker who needs to take some courses in elementary logic.
Hey Justin,
I think Stuart Robinson is a very smart marketer, by getting you to post a response to his ridiculous assertion he has increased the audience reading his blog, with your post. You are being very gracious by even entertaining his views on outsourcing as a new form of slavery.
If some of the fortune five hundred companies are outsourcing off shore, then they certainly don’t see anything wrong with it. The fact of the matter is that by outsourcing to these countries, you are in point of fact helping to energize their economy. Without your employment many of these folks would not have this opportunity to earn the income.
The problem with folks like Stuart Robinson is that they make these claims and accusations but they have no suggestions or solutions to fix the problem. Those in the Philippines we deal with in the Online arena are well educated, many with college degrees, who work for what the market will bear. If they felt that they were been taken advantage of, they could look for employment in other areas. If other sources were not available then they would have to make a decision.
Over the years I have had a number of Filipinos work for me in the corporate arena. They would support family members back in the Philippines as well as themselves and their families here in the US, on the salary they made here in the US. My point is that the market in each economy determines what the wage rate will be. It is then up to the individual worker to decide on who and what they will work for. Justin, all you can do is pay the individual working for you, a fair wage which you do.
Bottom line, if I pay those who perform a service well for my company then they will continue to perform well for my business. We get what we pay for. I’m in business to make a profit and I need to keep in mind that one of the biggest asset I have in making my business successful are the people who I employ to that end. If I don’t compensate them well and they are doing a good job, someone else will and I will be constantly looking for good employees. I think that holds true for every economy on the the globe!
It’s time for me to put in my say. As a descendant of slavery, my people had no choice. When they were given a choice as share croppers, they still had no real choice. They still worked below wage level.
I believe even though the pay is comparable to what Philipinos make in their country we could offer them more. As Justin offer increases in pay, I believe that he is being fair. As his bottom line increases I am sure that he will continue to increase salaries.
All Americans are not lazy. They do want to get paid a fair wages. I have tried to use Americans but they want too much and you have to train them. The average American employee does not know Internet Marketing. Because I am a trainer, I tell them that they can’t get paid while I train them. Two reasons for this: 1. It takes time from what I need to get done to train them 2: I have found that after I train them they leave to do their own thing. Free training that I usually charge $1500.
So now you are talking about a level of trust. At the end of the day, whatever you do, if you can look yourself in the mirror and say well done than you have done the right thing.
I remember being 18 and not caring, but that too shall pass. The consciouse will eventually outgrow your youthfulness.
And to Stuart “Judge not lest yea be Judge”
Saundra Jackson’s last blog post..Working to help you build your business
At the end of the day anyone who works for you and gets a paycheck has the decision to make as to if they are going to work the next day. If they sign on for another day then they are either satisfied with the pay or they cannot find anything better.
Justin what you are paying the Philipine workers is appropriate for you and for them so slavery? gimme a break.
Rick
Rick Wordpress Guy’s last blog post..Buying a Web Hosting Account
laughable…I have a full time Filipino programmer that I pay 20,000 pesos a month..he is very happy.
I am much more concerned about being an economic slave to my own fricken’ government than worrying about what the Filipino wage index is.
Our own government is making this generation and the next several economic slaves to their absolutely outrageous spending programs which will take a minimum of a decade to recover from.
Anyone worried abou teconomic slavery in the Philippines needs to get their head out of their ass and look at their own tax return.
Michael
Michael Belba’s last blog post..How To Use Web 2.0 Marketing And A WordPress Design Platform To Dominate Google
Hi Jason,
Great rebuttal, facts tell, stories sell! I like the real life experience of your assistant, Alene.
As online businesses, we are members of the virtual community. Thus, we can easily communicate with people anywhere. It makes perfect sense that we hire people from any country to work with us. As businesses we look at the bottom line and keep an eye on the ROI. If we can save a nickel, our return dollars expand. Perfect business sense.
Some of the projects I’ve had done here in the US have been exorbitantly priced compared to similar skills available outside this country.
It’s WIN-WIN to give work elsewhere at a lower price and yet, doubling or even tripling their income. It doesn’t get any better!
For the new start-up online business, it’s a relief to know you can outsource some of the tasks without breaking the bank. Trying to do the same here in the US would be out of the question.
Our US Economy will improve when we have an INFORMED citizenry. To date, this is not true. People only pay attention when something is taken away from them. Not much is done here to PREVENT the crooks from entering our political arena and thrashing our country.
To see this in action, go over to Amazon and get Steal This Movie – about Abby Hoffman in the late 60′s. The US gov did a complete trashing of his cause and turned his huge following into thumbsuckers with their disinformation tactics. Still happening today.
Love your stuff!
Patricia
Justin – I’m sorry about the Jason name in my last post! Slipped up!
Justin, Justin, Justin!!!
Really love your stuff!
Patricia
Patricia Winston’s last blog post..Outsource Your Business Tasks
I totally agree with you on this article.
Good points for sure.
Great article Justin! I agree with everything all of the commenters have mentioned as well. Outsourcing is simply a SMART business decision for all parties involved. This blog is great, and I look forward to some more new posts!
Awesome article Justin and some truly great comments. I don’t have much to add that haven’t already been said but the only thing that I could think of when talking about “slavery” is that I have never heard of people willingly going into “slavery”. I assume that your VAs apply for the job and that you’re not putting a gun to their heads
/Mikael
Mikael @ RetireRichRoadmap’s last blog post..Being Effective Produces the Free Time We All Want
Your so called ” slaves” are making as much or more than..
- The CHIEF Of The Police,
- A Municipal Trial Court Judge
- A Health Physician
You should really be ashamed.. lol
Worst : Three “special” policemen are not even making that much together..
that was fun
Hello Justin, and excellent points made by all.
I’ve been on both ends of this argument, as a contract worker and someone who worked for a company that did outsource their entire accounting department to India.
What I learned was Experience required – Location is optional! I don’t care if you have six eyes, green and purple spots – if you know your job, can do it well, and deliver what I need when I need it – you can live on Mars (I’ll somehow figure out the logistics later!).
As for Americans, we’re not all idiots who come with ”entitlement’ on our foreheads. However I do see it far too often, from customer service departments that are not about the customer to administrative assistants who have no idea how to us MS Word. Ah, but they want to quote you $25+ an hour.
I think the worst part of the ‘slavery’ remark, the poor kid has no idea what slavery really means. It simply sounded good and he read somewhere that if he created a post with controversy, he’d increase traffic to his blog. Nasty, but it worked for him.
Hey Justin some times other people’s blog posts not worth commenting on. Your business is your business keep to your standards I say. I do agree with DonovanMc post. Why give the complainant any free publicity you are better than that. Besides the Civil War in America resolved the issue of slavery and I am Australian who learned that at school.
Richard’s last blog post..The Rich Jerk Review
Hi Justin, first of all, I would say I AM a FILIPINO and I live in Philippines!
And yes, PHP 20,000 as a salary here is good enough.
For my thoughts, I do think that outsourcing “per se” is not a form of slavery. Typically, slavery comes in how a certain “boss” treats his or her employees.
If it’s a job that entails work work work and more work with no such times as for leisure, then that’s slavery. But if it’s not, then it’s a job to earn a decent living.
I live in Manila and I can assure you that 20,000p/month is a decent salary in the Philippines.
Kevin in Manila’s last blog post..Basta LoveLife Podcast, April 30th
Hello Justin,
Well, first of all, I found your site today because of your guest post for Shoe Money – “How To Outsource Your Traffic Generation.” How ironic. This was an excellent post by the way.
I believe to equate the American wage with the Filipino wage is obviously equating apples with oranges or apples with steak – two totally different things. They are not equal.
And, as for the slavery comparison; well, coming from an African American point of view, I think that comment is irresponsible and ridiculous.
Also, will you do, or have you done, a follow up article/post on outsourcing? I would love to read more specifics. You gave such good information in that post. You mentioned that you might do a follow up post.
Best,
Bridget
Hey Justin, finally found time to read this blog post. Man since I started with you and chaunna, my business has just exploded! Anyway, interesting blog with some fabulous replies.
This guy evidently does not know what is up or down. Has he ever looked into the economy of the country or any country where you can hire outsourcers. These people (a) hungry for work and (b) some are very well qualified (c) the work ethic is fantastic and (d) what you pay them makes them very well off indeed.
I supposed then he would oppose Micro Loans for some of underdeveloped parts of the world.
Stuart Robinson give yourself a break and actually look into how we are helping these people plus when you compare make sure you are comparing the exact same model, whether it is the economy or a TV or else you end up losing big time plus you will have a lot of egg on your face.
Love and Light
Maggie’s last blog post..Tell Me NOW – How Far Are You Prepared To Go?
What we are looking at when in business is profit. If outsourcing works then get it. The standard of living for people in the third world is far lower than in the US and hence that salary makes one live like a king.
I believe the Americans should temper their high living and fore go many things to start getting lesser wages if this recession continues.
If they keep out pricing themselves out of the market then the business will go to third world countries.
Thanks for an enlightening topic.
Hi Justin,
The company I’m in, outsources in the Philippines. I am a Filipino myself living in Oz. I’ve lived in the Philippines for more than 30 years. One of my siblings told me she’s earning about US$110/month over there working with AutoCAD in a construction firm. When I was there, I was earning roughly about $690/month on a position similar to a section chief, where you have a few people under you.
Stuart quoted from a site which is run by someone NOT Filipino so he is talking from a foreigners point of view. In another site, which is owned by a Filipino, Retirement in the Philippines, is taken into a different perspective, because this was written by a Filipino.
My take in this matter, is that outsourcing actually helps people who otherwise will have no income. I know because I was just talking to a stay at home mum in the Philippines who was earning $0.00 two months ago. She works hard and was actually given a raise of a few extra $$$ after just 2 weeks of work. Was she happy? Of course she was!
Business From Home Work’s last blog post..Refining A Startup Idea In A Business
Has anyone used oDesk? http://odesk.com
Any feedback would be appreciated. I found the site yesterday and looks like a one stop shop to hire anyone to do just about anything but would like to know if anyone has any ecperience of using this site.
Thanks in advance.
Michael
Michael Sherriff’s last blog post..googlemyname: Monday is an awful way to spend 1/7th of your life
So if outsourcing is like slavery in other countries I guess every thing we buy from Wally world is manufactured by slaves. The wages at the factories I was in in China three years ago were around $2 per day.
Rick
Rick Wordpress Guy’s last blog post..Buying a Web Hosting Account
Hi Guys, I was just revisiting some of the old post, and this one reminds me of a conversation I just had with the old champion breed horse farmer…
I noticed that most of the rich horse farmers here in Lexington are highering nothing but illegal mexicans…
These guys have more than enough money to higher anyone they want so I brought up the point…
He said that higher americans are such a freakin nightmare… they’re lazy, and want to get paid the most for the littlest amount of effort…
I asked him what the main difference was in the 2 types of people…
and he said it’s hard to even get the americans to come in to work, but it’s even harder to get the mexicans to go home from work…
So is outsourcing slavery? No…
but wouldn’t it be robbery to pay someone in the states $12 per hour and for them to turn around and do a half ass job?
The economy is global – as we’ve seen so clearly in the last year for all the wrong reasons.
Just because money crosses a border doesn’t mean it disappears!
Asking people to keep their money within their political borders is economic protectionism that was outdated pretty much before I was born.
As if a Filipino never spent their hard-earned cash on a US-generated product….
..now about those steel tariffs
Cheers, Alex
Alex Poole’s last blog post..Jumping out of the Comfort Box
John Jonas told me his people go around bragging they have an American boss, and that they are intensely proud of, and excited about their jobs.
Before outsourcing money coming in for these guys there was….nothing. That’s called abject poverty. That being the only other choice makes this guy a raging fool.
Hey Jack, thanks for stopping by… John Jonas is certainly an outsourcing stud. Yeah, the filipinos are the LAST people complaining about outsourcing, they’re in love with us right now.
Don’t remember whether salves in America were in love with their bosses… hmmmm? LoL
As a Filipino American, I can honestly say that P20K is a good honest salary in the Philippines. I lived there from 1995-2003. I was working as project manager for a new media company and only got P18K at my peak.
Christian Cabuay’s last blog post..Embrace Your Roots
Sorry for the double comment post but I checked out the article in question.
It said:
* Rent – P10,000 per month
* Utilities – P7,000 per month
* Transport – P3,000 per month
* Groceries – P25,000 per month
What crap. He’s never been there obviously and just looked up some “facts” online. Those #’s are wrong with the exception to rent IF they are renting a studio. Most people live with their parents well into their 20′s and even after their are married and in their 30′s.
Utilities – Overblown – Unless you have aircon on 24×7 it wont reach P7K. Having a Meralco bill of P3K was considered high
Transport – P7K? Only if your taking a private taxi everyday to work or to get around. Most commute via Light Rail System, jeepney or bus. Back and forth will cost no more than P100.
Groceries – P25K? Only if you weigh 500lbs and eat at The Fort restaurants everyday.
Christian Cabuay’s last blog post..SA
Hmmmm,
Federal minimum wage is $6.55 per hour. California’s minimum wage is now $8 per hour. Does that mean that in the U.S., people outside of California who are making minimum wage are slaves?
Now I know minimum wage is not much money, and anyone working for someone else is a “wage-slave”, but gee, the “logic” of some people….
yes i agree with you…..good informative article. Thanks for sharing.
Hmmmm,
Federal minimum wage is $6.55 per hour. California’s minimum wage is now $8
per hour. Does that mean that in the U.S., people outside of California who are
making minimum wage are slaves?
Great Point Katie! That puts things into perspective.
-David G.
David Internet Marketing’s last blog post..Boost your Page Rank in Minutes
Katie you make a great point about the different minimum wage
laws in different states. And does it really make sense that the government
can dictate to the employers the minimum amount they have to
pay their employees?
-David G.
The only reason people should complain with outsourcing jobs to the Phillipines is with technical jobs that they are not qualified for, i. e. with large corporations. This presents customer service problems. True, they do speak better English than those in India; however, since trouble shooting problems cannot be handled by them, it must be then referred back to the US for more qualified personnel to handle the problems. This usually creates a very dissatisfied customer. But for small business owners and for the Internet Marketer, it makes sense. So, to just make a blanket statement as Stuart did, without doing his due diligence, showed how little he really knows and how most people should just ignore him. Thanks Justin for all your posts and keep up the good work. I just got around to reading this one, but have read many others of yours.
Nice post. We run an outsourcing company geared towards small and medium sized businesses out of the Philippines. My business partner lives there and I’ve been making it out a couple of times a year. I can tell you quite plainly that 20,000 pesos a month for an entry or close to entry level position is quite generous.
Our business comes from the 2M – 20M businesses that are in need of a managed outsource crew and it’s quite beneficial to them. We track ROI on their expense and report regularly and they’re quite pleased with the results. That other post Justin wrote about how to hire a VA from Craigslist is ON THE MONEY and I would recommend to anyone starting out. Where, I think, we provide value to the start-ups and entrepreneurs is that we can afford to take on projects that may not have any initial payment, provided there’s a high level of trust, pay-for-performance, or company equity in it for us.
Great blog, Justin! – Justin Cooke TryBPO.com
.-= TryBPO.com´s last blog ..Life Travel: Combining the Forces of Outsourcing and Tim Ferriss =-.
Hi there,
sitefling.com to GoogleReader!
Hi there,
Thank you! I would now go on this blog every day!
Greatings, Interesting, I`ll quote it on my site later.
Robor
As a freelancer working through oDesk, I’ve been watching the trend in oDesk for quite a while. I should agree with this blog post that it’s becoming kind of slavery in oDesk which is just next to the top (Elance) in online marketplaces. Though, oDesk has decided to bring in minimum wage ($3 an hour), it is still a rock-bottom price for many.
Of course, ethics play a major role especially in the long term assignment. One without ethics can not stay long in the competition.
.-= Pothi´s last blog ..Minimum Wage coming up in oDesk =-.
Uhmm maybe you should read the post above before calling it slavery. We are talking about how we pay our employees over $4/hour and how they make almost as much as their local governors.
An insightful and articulate post! You bring up an interesting topic. Why call it slavery? What is the problem when you are able to excel at a particular thing and deliver the same to your clients or partners in return of the money? It's parochial to call it a slavery. It takes skills and abilities to deliver something of value at lesser costs than your counter parties. Isn't it? Its not slavery it is the reason why we are prospering from developing to developed. Lets call it a business sense. We would have done the same thing.
Charlie
Outsourcing is the buzzword today in US and India. But I would say things are overlooked. Companies in US gain by low-cost advantage in India. Indian service providers will bill their employees working for their clients.Indian companies make profit from this business. Indian companies not even offer 10% of the profit to their employees as hike. But its the employees who slog a lot for the clients from which they don't stand to gain anything. The words of the client are taken as gospels. Employees concerns can't be addressed to the fullest. Even the employees sometimes are requested to stay long nights to finish the project before the timeline.
Which is precisely why I use the Philippines and always recommend people do
their research first. It's very important to have a strong screening process
upfront otherwise you could hire the wrong guy or the wrong company, which
is much more costly in the long run than the quick money you gain in speed
of setup.
Hi Justin,
Great post! Ive started outsourcing myself to the Phillipines just today, and I hope it will help my company grow tremendously. I have hired a young and dedicated woman from there rather than an Indian IT company, I think it will help her also to do more things in her life. Overall I feel great about it, only idiots could call that slavery!
Great blog by the way, I just discovered it from the guest post on Shoemoney and have it bookmarked!
Robien @ TweeterStar – Get More Followers
I can't accept this. Because this is one of the job. For that , we are getting salary .
outsourcing
outsourcing
Please hire me. I am a Filipino and I need a data entry job or the like. I hope you can help. Very nice article. =)
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