Equal pay is still very much an issue across many industries in the business sector, even in an industry where we’re largely responsible for setting our own rates—the online industry. In this episode, Meaghan Lamm talks about equal pay in the online industry and how to make sure you’re walking your talk when it comes to paying contractors. She discusses how many international online contractors tend to make less just because they are from a country with a low cost of living. She taps into the ethical divide and the double standard that exists in this condition and how we, as an online business community, have the power to solve wage disparity between cultures.
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Equal Pay In The Online Industry
It’s no secret that you set your own rates in the online space, which is something that I think makes being your own boss attractive to so many people.
In order for us to run efficient, effective, and socially conscious businesses, we have to be mindful of what we’re paying all of the virtual support pros that support us in doing our work.
We’re going to talk about equal pay in the online industry and how to make sure you’re walking your talk when it comes to paying contractors. Let’s get started.
I’ve discussed equal pay before. We know it’s a problem. We know that even in an industry where we are largely responsible for setting our own rates that women tend to make less than men, but that’s not what I want to focus on today.
Instead, I want to talk about a trend I’ve been seeing happening in the online space for years—one that thankfully more people are starting to talk about openly, finally. That is hiring international contractors.
You can pay them anywhere from $2 to $5 per hour, rather than what would be considered the standard rate of pay in Western countries like the US, Canada, Europe, which is typically closer to $20 an hour and up, and this is a problem.
It’s especially a problem if you claim to be a socially conscious business owner that stands for equality because hiring someone from a country with a low cost of living so that you can pay them a pitifully low wage—rather than hiring someone from a Western country who you would have to pay them more, or not wanting to work with someone from a foreign country because they charge more than $2 to $4 an hour—is unethical at best.
What I think really concerns me about this is you typically see so many women or people in general in the online space—but I would say especially women—to charge your worth. That’s a huge thing. They preach this to their own following, to charge their worth, and then turn around and not just gladly pay someone $2 an hour, but actively seek out VAs and other support pros like social media managers, online business managers, etc. to pay them incredibly low rates.
I hate that because does the worth of the VA suddenly decreased because they live in a country with a low cost of living? Is that the message that we’re sending to people? I hate the phrase, “Charge your worth,” anyway because I think that far too many women undercharge because of it. If you want to hear my opinions on charging your worth, I won’t go into them here, but you can check them out in Episode 11.It's not okay to tell your white privileged clients to charge what they're worth and then hire people of color to work for almost nothing. Click To Tweet
I hate the “Charge your worth” dichotomy here even more in this case, especially because there’s such a flagrant disparity between sending one message to your followers and a very different message to the people you’re paying to support your business.
What I’m focusing on here is that ethical gap between what we teach and what we practice because it’s not okay. It’s not okay to tell your white, privileged clients to charge what they’re worth and then set the example of hiring people of color in other countries to work for almost nothing. This is fucked up.
I know that there are people out there who are doing this. I know some of them personally who actively preach to their followers to charge their worth and then turn around and tell them to hire people to support their business from foreign countries or international countries so that they can pay them $2 to $5 an hour.
That’s, again, fucked up. This has been on my mind, especially lately. I’ve had a couple of conversations with a friend about it because I’ve seen threads popping up on Facebook more and more because people are, I think, finally starting to have more conversations about it. Then of course, in the comments, you see some good conversation, you see a lot of comment sections getting turned off—which I find especially frustrating—but you also of course see a lot of deflecting and justifications.
I recently saw the deflection of, “Do these folks even want our help?” We don’t need to be a white savior and jump in here to fix something if nobody wants it fixed. On the surface, maybe that’s a fair point. We don’t need to be white savioring ourselves in here, trying to champion this cause that maybe is none of our business, just to make ourselves feel better about other shitty things we might be doing—we don’t need to do that.
I might have agreed with the person who said this if I hadn’t been paying attention to this trend in the online space for a couple of years. Over the last few years, I’ve seen probably dozens of posts from VAs. Off the top of my head, I can think of VAs specifically from India, the Philippines, Nigeria, and then one guy from Pakistan who were all vocally displeased and frustrated that people expect to pay such low rates for their services.
One woman who’s from the Philippines called it exploitation, which I completely agree with. I’ve seen many posts from people who—they’re in talks with potential clients, they’re going through the interview process or the discovery call process, they quote them their rate, a normal industry-standard rate of like $15 to $25 an hour, depending on where you live or what you’re doing and how new you are.
Then the potential client finds out that the VA is from the Philippines or Nigeria or something like that and they suddenly want to renegotiate the rate and pay them closer to $5 an hour. The client loses out on the sale if they don’t want to accept that lower rate—which most of them don’t.Wage disparity between cultures is a problem. We, as an online business community, have the power to solve it. Click To Tweet
They miss out on the sale and then they post in service pro groups about being frustrated about that. That happens a lot. I’m sure it happens much more than I personally have seen on Facebook obviously. So that’s part of the problem.
Then there are justifications from other people. I literally saw a justification that it was unethical to charge as much as VAs in Western countries if you live somewhere with a low cost of living. Maybe the exact word was predatory. I can’t remember.
People in developed nations like the US, Canada, the UK, other parts of Europe—they move in order to reduce their cost of living and increase profit all of the time. People move from the city into the suburbs, they move from one state to another, to bring their cost of living down and no one’s calling those people predatory for moving to rural Kansas so they can buy a cheaper house without lowering their rates much.
If I wanted to move to rural Kansas tomorrow—which I don’t—but if I did so that I could live somewhere as nice but cheaper than I live right now, nobody would expect me to lower my rates. That would vastly increase my profit, but nobody would expect me to lower my rates because I was suddenly living somewhere cheaper. The expectation that people who live in countries with super low costs of living should do the same is obviously a double standard.
But the most common justification I’ve seen for this wage gap is that “contractors are responsible for setting their rates, so if they want to make more money, they need to charge more,” which is a nice little bit of blaming the person—but there are two things wrong with this.
One, I’ve seen a few Filipino VAs say that culturally, people in the Philippines want to work. They want to work. They want to earn a wage and they want to contribute to their family, to their household, etc. So most of the time they will take any wage, whether it is sustainable or not. They may not feel as if they have the luxury of holding out for $15 to $20 an hour if they can get $5.
I’m not an expert on these cultures. These are comments I’ve seen from people inside these cultures on Facebook. I would hazard a guess that if the mindset among other similar cultures who end up being pigeonholed into this ridiculously low $2 to $5 an hour rate is probably the same or similar in that they want to work, they don’t feel like they have the luxury of holding out for a higher wage, so they take what they can get, as it were.
Two—I said there were two things wrong with this; that was one—two, we don’t have to pay someone $5 an hour just because they quote us $5 an hour. Let that blow your mind.
To me, paying someone who lives in Nigeria $5 an hour for work that I would pay someone who lives in Virginia $25 an hour for—doesn’t sit well with me. I won’t do that. I will advise clients not to do that because the fact is that this wage disparity between cultures is a problem, and we, as an online business community, have the power to solve it.
As an anecdotal example, there’s a company in Seattle that I read about called Gravity Payments that raised their minimum salary for their company to $70,000 a year.If you consider yourself a feminist visionary, then you have a responsibility to pay your people well no matter where they're from. Click To Tweet
I think the industry standard for them is around $35,000. It’s quite a big jump—it’s like double. The owner of the company decided to buck that standard. When they did, they actually watched productivity and revenue skyrocket. They doubled their revenue and he was charging other corporate companies with similar structures to do the same.
That’s just one example of, you don’t have to pay $5 an hour because it’s considered normal that someone from the Philippines or India charges $5 an hour. We have the ability and the buying power and the spending power to help normalize people from those countries to charge and earn more than $5 an hour by offering to pay them more. That’s it, period.
I’m not going to claim to be a tax attorney or an expert in tax law when it comes to classifying contractors. I guess this is my disclaimer to check the specific laws in your state, your province, your whatever. But as I understand it—at least where I live in the United States—haggling someone’s rates up or down, but up in this case, does not declassify them as an independent contractor. If you’re sitting here trying to use that as an excuse, it’s probably bogus.
And please, let’s not hide behind diversity claims when it comes to this either because you do not have to pay someone $5 an hour in order to build a diverse team. Whether that means offering someone who quoted you $5 an hour more money or it means finding VAs who charge higher prices, there are plenty of diverse candidates that are international or potentially even local to you that charge industry-standard rates of $15 to $20 an hour or more. Please don’t say that you’re looking for diversity—I’ve seen that justification as well—when your budget is also $2 to $5 an hour.
When your budget is $2 to $5 an hour, you’re not looking for diversity because we can all see right through that claim and it’s not cute.
Listen, I’m a business owner. I get the desire to keep costs low to maximize profit. I really do, but I always have and always will pay my team well because they are genuinely the backbone of my business. If I can’t afford to pay my team well up to my own personal standards, but in general, we’re talking $20 to $25 an hour—at least—if I can’t afford that in whatever capacity I’m hiring (or more, ’cause my team members make more than that), then I need to raise my own rates or cut back in other areas so that I can pay them what is ethically okay for me to pay.
If you consider yourself a socially conscious business, then you need to do the same, period. Because if you consider yourself a Feminist Visionary—if you are running a socially conscious business—then you have a responsibility to walk your talk and pay your people well no matter where they’re from. No excuses.
We have the ability and the responsibility to create change in this industry by refusing to pay low wages. I don’t mean refusing by not working with people charging low wages. I mean refusing by offering to pay them more.
That’s it for me today. Bye, y’all.