Welcome to the New Normal

Crowdsourcing is here to stay. Companies have learned how to take advantage of technology and global sourcing practices for every element of their respective supply chains, including access to talent and labor in the physical and virtual dimensions. What remains to be seen is whether common sense will prevail to tip the scales in favor of competitive pay rather than exploitation, but if the fates of the textile industry, furniture making and heavy manufacturing are any indication, the rush to capitalize on rock-bottom prices in the commodity labor market will only pick up speed until there are consequences for the businesses involved.

As economic recovery plays out differently in different parts of the world, the U.S. finds itself as a laggard rather than a leader of the recovery, leading to a much slower pace of job creation domestically. People who were laid off at the beginning of the recession in 2008 and still have not found work are likely to have reached the end of their unemployment benefits as well, forcing them to evaluate their options and perhaps settle for unqualified, low wage work to have any income at all. Meanwhile, in this dual-speed global recovery, emerging markets are encouraging more workers to learn computer skills and get into the global marketplace to compete for work, and many of these workers are able to work for wages that range from $3.00 to $5.00 per hour and live comfortably.

In the so-called New Normal, freelance work may be the only option for many American workers, at least in the near term. A certain amount of government intervention appears to be inevitable, as what is currently taking place in the unregulated virtual labor market comes dangerously close to violating tax and labor laws. Companies that are sourcing work online are usually not paying taxes in the countries where the work is being done, which could cause other countries to work with the U.S. government to reign in some of the more egregious practices.

For those workers who have valuable creative and technical skills, it should be possible for them to earn a comfortable living and continue to remain competitive in spite of the global crowdsourcing competition. However, there are a number of professions that are being blindsided by this emerging market and its price pressures, among them lawyers, accountants, marketing and design specialists, translators, and many others. Some have taken the “if you can’t beat ‘em, join’em approach” and started sub-contracting their own work to crowdsourced freelancers in low cost countries, while others have scaled back their businesses to a minimal level of sustainability, hoping for things to improve.

Posted on April 16, 2012, in Crowdsourcing. Bookmark the permalink. Leave a comment.

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