[pinky1417]

I’m no Tim Ferriss fanboy, but her “exploitation” critique is wrong.

Paying people overseas for what would be a low salary in one’s home country isn’t exploitation. Say you’re paying someone abroad $3 an hour while minimum wage in your country is about $8. Median wage in this abroad country is $1.50 an hour. Your employee could expect to make that if she weren’t working for you. Are you exploiting her? I suppose, based on the non-loaded dictionary definition of exploit as “ make full use of and derive benefit from (a resource).”

But so what? You’re making her better off than she would otherwise be. She’s free to leave or argue for a higher wage. If you left - or were banned from hiring overseas workers - you’d be making her worse off.

[JBiserkov]

But why pay them $3 when you could pay them $1.500000000001 and the "better off" "argument" still applies?

[AussieWog93]

Short answer, retention. That's why Ford paid his workers $5 a day.

[pinky1417]

Retention is one reason. Two other reasons are friction of switching jobs + labor not being highly commoditized.

Friction: If I'm getting paid $80k a year as a junior dev, I'm probably not going to switch to a similar job for $85k - yeah, I'm better off, but it can be a minor pain to switch jobs.

Imperfect markets: in mythical EconLand, if company A is paying a worker $1.50 an hour to make widgets and company B offers $1.500001 an hour, the worker will instantly switch to company B unless A matches the wage. In reality, there's a cost to switching and the worker doesn't know if her manager at B will be a pain-in-the-butt who negates the $0.000001 increase in hourly wage. Friction and asymmetric information like this is one reason we don't see hyper-precise pricing outside highly commoditized goods (EUR/USD spreads, pork bellies, etc.).

[orwin]

My current company delocalized some support and part of the ci/CD tool chain to Bangalore. Formed a local to be the point of contact (supplementary french lessons, Kube/openShift/Jenkins formation). He left after being formed and now have a french salary, in France, for a small company. That's why you pay them at least 2/3 of the price home.

[hungryforcodes]

Also the cost of living and general social financial structure is raaaadically different in the $8 an hour country vs the $1.50 an hour country.

[PaulDavisThe1st]

Let's be real here. You wouldn't pay someone abroad $3/hr if:

* there were actual tariffs imposed when you imported the results of her labor, reflecting the very different costs of living in two nations

* the nation where she works had the same environmental and labor regulations as where you live.

* there were barriers to you directly or indirectly investing capital in the nation where she lives, and/or significant taxes on the profit you make from doing so.

* the nation where she lives had a strong union/pro-labor culture that gave workers the power to collectively negotiate with employers.

* the nation where she lives had a legal system that would reliably hold employers and investors responsible for their decisions.

Now, you might still choose to pay for overseas labor even if all these things were true, but you likely wouldn't be paying $3/hr anymore. As it stands, "cheap overseas labor" is about much more than that.

[pinky1417]

You're absolutely right. I likely wouldn't.

But you have to ask whether those ideas (barriers to investing capital, tariffs, etc) are good ideas.

We'd all like people to earn more and live better lives. It seems like the most popular argument on HN is that, to do that, countries should adopt more regulations. Another perspective is that, if we want to achieve our shared goal, the best way to do that is through less regulation, tax, and capital controls.

Same goal, different method.

[PaulDavisThe1st]

That's fine, except that we've already lived in a world with less regulation, less tax, less capital controls (not necessarily all varying in sync with each other, but broadly so).

People (generally) earn less and have worse lives under these conditions.

[jerrre]

You could argue that what's exploited is the fact that there is a country with a minimum wage of $8, and another with a median of $1.50 in your example. So if you're Tim Ferriss raised in the first country it works, but in the second it doesn't (if you don't find an even cheaper country).

The luck/unequality is in that what's not much money for you, is a lot of money for some-one else.