Researching the List of minimum wages by Country, I took India for example: "A worker in India is entitled, by federal law standards, to a minimum pay of $0.28 per hour. This leaves Indian workers earnings between $2 and $3 a day, and less than $700\year." Let's be generous and say $4\day.

In the US, the minimum wage varies between States so let's just say it's $9\hour which would be $72\day. So Americans earns 1,700 percent more than the Indians.

Now let's crunch some numbers... Researching various "Freelance-For-Hire" sites, I chose "Graphic Designer" for my research. You will find that the Indian worker will charge between $7-$20 per hour. Let's round this up and say he earns the same as the American worker - $9\hr, which will bring in $72 per day. This would mean that he is earning 1,700 percent more than his neighbor. In other words, this would have the equivalent of someone in the US earning $1296 per day. Roughly, it would be like he's earning just shy of a ONE YEAR salary in India - in just ONE WEEK! Or like an American who makes $20,000 per year, making $360,000 per year!

If my numbers are correct, this individual freelancer from India should be living the lifestyle of a millionaire in no time... but as I researched, they don't seem to be any different than any average hard-working Indian which begs the question... the numbers just don't add up. Yes, I understand that not all freelancer's have full time employment but I think you get the relevancy of my question.

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    Was there a question here? And you can't use "minimum wage" to calculate anything regarding freelancing. I don't know any freelancer that sets their rates to "minimum wage" rates. You also must factor in cost of living and exchange rates. – Scott May 14 '16 at 6:05
  • US programmers charge $9/h? Don't think so. The same is in India. Another parameter is that there are few freelancers that have 40 payable work hours EVERY week. If they have monthly occupation on some project, they will usually set more attractive salary. Check why freelancer's fees seems larger - read a few of the top topics here. – Peter MV May 14 '16 at 14:06
  • To add more, in the end, a good freelancer will earn salaryFromReputableCompanyWhoPaysWorkersPerQuality + feeCompanyTakesOnEveryWorker + potentialBonus. Not more. You will see good-earning freelancers, but not millionaires. To earn millions, you have to have your own company and your own workers (read millions come not from work but from 2 other parameters) – Peter MV May 14 '16 at 14:08
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    Switzerland has no minimum wage. Do you think swiss programmers work for free? – Apfelsaft May 14 '16 at 16:47
  • I'm voting to close this question as off-topic because it's not a problem Freelancers are facing – Canadian Luke May 14 '16 at 17:25

Just because a country has a certain minimum wage doesn't mean that's a survivable wage. And wage isn't the same as cost.

A McDonalds meal costs 200 rupees, roughly 3 dollars. It costs $7.00 in the states. The Indian minimum wage means working 10 hours for a meal, while U.S. minimum means working an hour for a meal. The cost of living in India is 1/3rd of that in America, and rent is 1/5th of that in America, but minimum wage is 1/30th of what it is in the States. Living on minimum wage there is like living on $1 per hour in America. Is that a decent minimum wage? I don't think so.

And then there are taxes, company insurance, mediator fees, exchange rates and so on. All those things take your $7~$20 down by a lot. On top of that - how many American freelancers do you know that work for minimum wage? The average hourly rate for a (professional, not a student) designer is about $70.

Plus, cost for a freelancer is more than just hourly wage. For every hour they work, they also spend time finding clients, doing bookkeeping and such. In a company you'd have specific people (either internal or external) for that, which all get a wage. And as a freelancer, you also need to provide your own equipment, software, and space.

And while cost of living is lower, prices of computers aren't, due to scarcity and import cost. Adobe software is cheaper, but only about 20% and a macbook actually costs more there than in America.

Minimum wage doesn't include company overhead costs. Freelance fees do include that overhead.

So, to recap:

  • minimum wage is that low, but cost of living isn't.
  • an employee costs more than just their wage
  • a freelancer/company has additional costs besides wages
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