Third World Wages, First World Prices

One field in which the work world has drastically changed is writing. From the late '80s through the late '90s, I was often making $100/hour for writing magazine articles and corporate newsletters, and as much as $90/hour for editing. Today on craigslist.com, writers can make $5-$10 for a 1,500-word "thoroughly researched" article. For those of you who aren't writers, this would take between 15 and 25 hours of work, at between 20 and 67 cents/hour, well below the federal minimum wage of $7.25/hr. and the California minimum wage of $8.



I recently met up with a former student of mine while I was walking my dog in the neighborhood. Daniel said that I should check out elance.com, the site at which he gets all his work. He has been working through this site for years. He admitted that when he started out, he was shocked at how little he was making, as he was competing against English-speakers throughout the world, many of whom in countries where $150 went 20 or more times farther than it does here. After many years, though, he said that clients come back to him because they like the work he does and they will pay what he's worth. I checked it out.

Like many such sites, elance talent bids for work. You can buy into different plans--five bids per month for free, then the fees increase, depending on the number of bids you wish to submit. In addition to this, elance takes 6.75-8.75 percent of your earnings, the highest percentage going to those contractors who have the least amount of work--boy, isn't that the way the world works! The jobs I've seen so far have been abysmal. Twenty 400-word articles with synopses for less than $500 (the maximum bid). Back in the day, I could make that much for two articles. On a good day, maybe even one.

This wouldn't all be so bad if prices had gone down in the past couple decades, but that sure has not happened. As anyone who has ever shopped for his or her own food knows, the cost of living has skyrocketed. The Bureau of Labor Statistics, the government agency that calculates the Consumer Price Index (CPI), claims that prices have increased by 277 percent since 1980. That, however, is quite deceiving, as the BLS reconfigured the way it calculates the CPI back in 1980. Instead of sticking to the things that everyone needs to survive, like food, housing, medical care, transportation, and clothes, the BLS started to throw in items that you either don't need or you can certainly do without, things like iPads. Because, as has been the case throughout history, when a new technology first hits the scene, it's expensive, but as time goes on and consumers are buying more of the thing and the cost of producing the thing decreases and there's more competition in the marketplace, the price to consumers also decreases. But a lot of these items are durable, which means you don't buy them every week or even every year. They're not like a loaf of bread or a pound of beans. If you look at the real inflation rate from 1980 to 2011, it's more like 1,110 percent.

I can vouch for a much-higher inflation rate than the government reports. My first apartment in 1977 was a cute one-bedroom that rented for $175/month. When I got married in 1978, we rented a much bigger place with built-in mahogany bookcases, a walk-in pantry, two bedrooms, and a sun room that was glass on three sides. This was $300. The place I'm in now is a small one-bedroom that is poorly maintained by the landlord. The railing on my porch is termite-ridden and falling down. Many of the exterior boards are either cracked or not flush, allowing rodents to come in from time to time. It's easy to see the structural damage in this 1920s-era house, of which I rent the back half for $1,020. Though we aren't comparing apples to apples, as my first apartment was much better maintained, yet the percentage increase is 483. I have no basis for comparing medical costs, as I have always had some sort of insurance, but these costs certainly go well beyond the government CPI.

Food prices are even more shocking. Currently, I'm paying up to $3.99 for a single bell pepper, a little more than $4 for a gallon of milk, close to $4 for a loaf of bread, and almost $5 for a dozen eggs. Working for 20-67 cents an hour, I could spend two days earning enough to buy my breakfast.


This brings the point home of what globalization has done. It's drastically lowered wages and the buying power of the American consumer, while taking overseas what once were well-paying jobs. And yet the cost of living continues to climb. My competitors for writing jobs are in places where the cost of living is a whole lot cheaper than it is here. I can't imagine, for example, that a small, poorly maintained one-bedroom apartment in a town in Bangladesh or a village in Mali rents for $1,020/month. For someone in these circumstances, writing 20 articles for less than $500 is no doubt a boondoggle.