Are online freelancing platforms a source of cheap labour

Freelancing platforms are great. You can find work from all over the world. Work whenever your feel like it. Charge the rate you want. Right? Perhaps those who have tried freelancing platforms would already know what the earning potential of freelancing platforms are. There are definitely plenty of jobs to choose from. And there's no doubt you can earn money from it. But unless your cost of living is well below $1k, you're better of elsewhere.

The global market

Do you remember what happened when China opened it's door to foreign markets? Remember how everything became cheaper and companies moved their manufacturing to China. That's what happens when you compete in the global market. You're not just competing on skills, you're competing on price. There are plenty of skilled workers in developing country who would gladly accept $1k per month for a high skilled job. And there's very little reason why anyone would choose to pay more for someone who lives in a developed country.

You might think that buyers would value quality over price. It's better to pay a little more for better results. Unfortunately buyers are often horrible at judging quality. When you buy a house, you'll never evaluate the materials used in the building, or the structural integrity of the building etc. And even if you tried, you wouldn't be very good at it either. The same problem plagues freelancing platforms.

Like a dating app

If only it was just about price and quality. There's a big problem when networks get large and big tech tries to optimize them. They start ranking people like how they rank products you buy online. Like dating apps, your profile will be given priority if you have a better ranking than others. That means newcomers will have a herculean task just landing their first job.

And like dating apps, the only way a buyer can judge you is by your profile. Something superficial and not representative of your real skills. There's not way for you to truly showcase yourself.

The feedback loop

Because of these two simple problems, the problems get worse. Buyers prefer cheap labour. Cheap labour get better rating and get priority. New comers lower their rates to get job. With the influx of skilled and cheap labour, there is no incentive for buyers to pay more.

Should you use a freelancing platforms

Although it sounds all doom and gloom, there's still some hope. Just like how some would pay double for a Mac Book, there will be some who would pay more for the service they like. It is still a good way to get access to decent jobs once in a while. Perhaps it's worth a try.

Keywords: freelance, job, work