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Andrew and Vikram - thanks for your comments, great discussion.
Vikram - I wanted to address some of your points, as I think they highlight some common misconceptions about online work. First, online work gives tremendous opportunity for upward economic mobility. The average hourly rate of an online worker increases by 190% over 3 years. Our staff economist, John Horton, just posted an interesting study of this on our blog: https://www.odesk.com/blog/2012/07/25749/.
Second, the online wages are very competitive relative to local wages. The average hourly rate of an Indian contractor on oDesk was $9.78 in June, almost 4x the average local starting wage of a .Net developer with a CS degree ($2.40/hour, source: PayScale) and 13x the average per capita income in India ($0.78/hour, source: Wikipedia). Working online has other benefits, such as avoiding the 2-3 hour commutes that are common in many large cities or being able to work from home while caring for family.
While there are situations where individuals post a job at a below-market rate, people vote with their actions and those jobs go unfilled. Open, online and global employment marketplaces like oDesk give clients and contractors access to talent and economic opportunity that isn't available locally. Our model doesn't work unless it's good for both the contractors and companies. The data above and our rapid and sustained growth is an indicator of the positive impact online work can have on all participants.
9 months, 4 weeks ago on Online Sourcing Enhances Staffing