When Donavon Brutus got laid off from his animation job in June 2009, he knew the amount of freelance work near his home in Tampa, Fla., could not sustain him. But rather than spend months looking for a full-time, salaried position in a state with a 12.2 percent unemployment rate, Brutus went online and started working for oDesk, one of a growing number of Web sites that connect contract workers to temporary projects. Now Brutus earns an average of $16 per hour designing logos, 3-D graphics, and CD covers for companies as far away as China, Australia, and India. “The only issue has been the time difference,” he says. “But that’s only been a problem with one client in India, who wanted me to wake up at 3 a.m.”
As the U.S. economy sputters its way back to health, American freelancers increasingly are finding themselves working for companies overseas in what’s becoming a type of reverse outsourcing. Executives at Sologig, Elance, oDesk, and People Per Hour say they’re seeing more corporations and small businesses from the U.K., Australia, China, Pakistan, and India turn to the U.S. freelance market. oDesk has seen its share of international companies that hire U.S. workers jump from 1,429 in February 2009 to 4,285 in February 2010, while the earnings of U.S. Elance freelancers rose 45 percent this year, compared with freelancers in India whose earnings rose 35 percent.
Overseas companies are looking for technical or creative help in writing, editing, marketing, information technology, and engineering, say executives from these online sites, and they want to hire people with strong English-language skills. The recession has given them an opening to hire more skilled workers at a lower cost. “These sites set up competition between people in all countries to do the same work,” says David Autor, a professor of economics at MIT. “They’re paying a premium to hire American workers, but in the current labor market, it may seem like a good deal.”
Though these sites allow workers to tap into the global economy, the entry comes at a high price: mainly, low wages, no benefits, and little economic security. The average oDesk employee makes $17.60 per hour, while the average Elance worker makes an even lower rate of $12.50 per hour. People Per Hour, which caters to high-skill freelancers, says its jobs pay $30 per hour on average and that’s pre-tax with no health insurance, sick leave, vacation, or retirement benefits. In addition to the arguably low pay, oDesk, Rent-A-Coder, and Elance closely monitor workers’ productivity through the use of Web cams, key strokes, time sheets, or streaming screen shots. Elance CEO Fabio Rosati argues the company is not Big Brother; its freelancers can opt out of the streaming shots of their computers, but doing so means they lose any guarantee of payment if a company disputes their work.
Like it or not, lower pay and 24/7 demands are now the reality for U.S. contract workers. Fifty-seven-year-old Richard Kelley is a former advertising executive who used to spend his days in a corner office on Madison Avenue. Now, he works odd hours and weekends to juggle freelance assignments and Skype conference calls with clients in London, France, Australia, or California. Kelley is grateful that People Per Hour’s online assignments helped him survive the downturn in the New York City advertising market. Though he earns about 75 percent of his former salary, he says he enjoys not “being owned” by any particular company and having time to pursue other projects such as writing a children’s book. He’s resigned to the idea that his future may be uncertain. “One just has to roll with the punches a little bit. It’s not the same world anymore,” he says.
In today’s poor economic climate, online sites often become a salvation for the unemployed or underemployed. “For the person in Flint, Mich., you’re bringing the global jobs to a local market where there are no jobs,” says Gary Swart, oDesk’s CEO. “It gives people control over their careers.” It also enables people to make cash while they look for other jobs, and it means that people do not need to relocate for work. “It’s not a race to the bottom because employers understand that if a person works for next to nothing, the value of their skills is really low,” Autor says. “But it does indicate a level of how deep the recession is.”
The main problem with the growth of these online sites is that they inevitably transform workers into “mini-multinationals,” as the CEO of Elance calls them. The mini-multinationals shoulder all of the fees associated with the online freelance Web sites: from paying for a subscription to access the job postings to watching the sites take a commission on each job. It’s like being a global corporation and looking after the taxes, operations, and finance—without any of the American tradition of a workers’ safety net.