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Global outsourcing conjures up images of deserted factories and crumbling towns. People who were once gainfully-employed, skilled workers now live in poverty, while looking for jobs that no longer exist. The company moves production out of the country to places where workers sometimes fight for the chance to earn a fraction of what Americans demand. Companies may tell jobless workers the business was forced to leave to save money. Many workers turn to online jobs to generate income.


Online scams and con artists online make finding an online job difficult. Promises of instant wealth through little effort are alluring, but the offers are often scams. Reputable sites such as oDesk, Elance and Freelancer don’t have to advertise services to attract contract workers. They already have more contractors than available jobs.


Online Job Misconceptions and Myths


Word of mouth and news articles draw workers to these sites. Articles describe record business profits and praise successful workers who make livings by freelancing. The articles hone in on one or two exceptional freelancers. No mention is made of other freelancers who struggle to find work and labor for ridiculously low salaries.


How Online Job Platforms Work?


Online job platforms consider themselves employment agencies that match employers with skilled workers. The matchmakers are not required to provide workers with benefits, retirement plans or health insurance. Employers also have no legal obligation to offer benefits to short-term, part-time employees. Contract employees get paid what’s left after the agency and electronic banking services take a cut of the worker’s pay.


oDesk offers 1.4 million contractors in over 150 countries to employers with jobs to outsource. The company has $60 million in annual operating revenues and just 37 employees. Similarly, Elance has $19 million in yearly operating revenues and 55 official employees.

US Unemployment and Outsourcing- Is an Online Job the Answer

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Online Jobs and US Federal Taxes


Americans who work online must file federal taxes as independent contractors or self-employed individuals. Regular American employees who make less than $6,000 per year normally do not have to file taxes. Americans who are online contractors must file taxes no matter how much they make.


Flex Time, Really?


Online work seems like easy income for jobless workers or stay-at-home parents. The informal atmosphere permits time flexibility. An online contractor can work in the comfort of their home, in the clothes they want to wear, without the hassle of a commute and a demanding in-office boss.


Online employment can be time consuming and not as financially rewarding as many people believe. Online jobs are temporary, which means workers must constantly search for new projects. Getting work done by a deadline requires self-discipline and freedom from distractions like active children, pets, laundry, cooking and other household chores.


Are “You” Really the BOSS When You Work Online?


Without a boss looking over the worker’s shoulder, the temptation to stray from work to check a social media site, play games and send emails is always present. Most online jobs require using the Internet, so working offline is usually not an option. Hourly online work usually requires contractors to log on to a work website. The employer may monitor keystrokes or check employees’ work habits by using web cameras.


The ‘be your own boss’ philosophy sounds appealing until you realize that online workers have different bosses for every project they do. It takes strong communication skills to understand what every new employer expects beyond the initial job description. Contractors who have multiple jobs must be multitasking wizards who can satisfy several bosses and deadlines.


Online platform client bases are so large that it is not necessary for the agencies to actively match employers with contractors. Employers might receive dozens of replies within an hour for a single project.


The platforms create a meeting point for employers and potential contractors. Finding, applying for and getting job offers are burdens on contractors’ shoulders. Expenses like software upgrades may be necessary to fulfill some employers’ contracts. For example, Open Office might not be sufficient when the employer wants a Microsoft Word document formatted. The Microsoft Office Suite is expensive.


Online Job: American Dream or Nightmare?


American online workers might save gas money by working online at home but they must pay for Internet access and electricity. For example, an online project that pays a fixed rate of $75 sounds good. But, wait. The contractor may invest many hours to get the work and many more to do the project. The employment platform takes 10 percent. An online payment processor like PayPal takes a fee. Add unpaid taxes. After all the expense, that $75 job really only nets about $60.


Contractors sometimes prefer jobs that pay hourly. These jobs often work like a reverse auction, as contractors try to underbid each other. A contractor might work out how much they need to earn per hour to pay for their time and effort, and bid that number.


An American might bid a number equal to a state or federal minimum wage. A person from a developing country could bid a dollar an hour or less. To compete, Americans lower expectations. Attempts to do volume work to make up the difference in pay usually results in frustration and exhaustion.


Americans expect a living wage as reasonable compensation for their time and long term financial security. Neither of those things is a standard result of working for an online employment platform. Online job competition is global. People outside the U.S. are willing to work for lower, sometimes far lower rates.


Many Americans consider globalization to be a race to the bottom. Countries with high standards of living cannot participate in this market without sacrificing a high living standard. The American standard of living comes at a high cost, one that cannot be paid by online jobs.


Having said that, if you don’t believe me, go to any of the 3 top online job sites I have mentioned and try your luck! You could get lucky. But, if you are someone who is looking to start an online business instead of an online job, watch this video here and take a short survey at (this survey will not take more than 60 seconds of your life).

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