Are online marketplaces driving down web worker salaries?


When it comes to piecing together a career as a remote, independent worker, online marketplaces that match talent with those in need of services can seem like all upside. Allowing freelancers to tap new markets, sites like Elance and oDesk lubricate the process of matching worker and employer allowing freelancers to spend less on marketing and client relations.

But is this the whole story? Writing on the American Express OPEN Forum blog recently, small business consultant Barry Moltz suggested these sorts of sites might have an often overlooked dark side for independent web workers: They drive down prices by broadening the supply of services. That’s good for companies shopping for remote workers, of course, but lousy for those hoping to keep their fees up. Moltz writes,

While these crowd-sourcing models have been around for a while, especially on the consumer side, they are not without complaints from people seeking this type of work.  This method tends you to drive down the price of services with less barriers to supply. Fabio [Rosati, CEO of Elance] compares it to shopping on, “You are no longer limited to the stores on main street. You can almost buy anything, anywhere.”

The idea that price competition is getting tougher out there for freelancers isn’t confined to Moltz’s post. Blog Freelance Folder also recently ran a post entitled “The Great Freelancing Pricing War.” “It’s a war out there–or at least it can feel like one when it comes to the prices freelancers charge for their services,” writes Laura Spencer before offering tips on how to fairly price your work and maximize your fee. She doesn’t expressly implicate the like of Elance in this increased price pressure, however.

What’s been your experience as an independent web worker – are sites like Elance and oDesk making it harder for you to charge a fair wage for your work?

Image courtesy of Flickr user rutlo.

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