Ugh, I've seen small-town web development shops charge $130+ an hour for work done by the grunts who get more like $30 an hour.
Some of these shops are very profitable and successful, and some of them aren't.
Either way, the person who's got the most to complain about this situation is the grunt, not the customer who imagines they could get the work for cheaper. The grunt is very aware that he could produce a lot more value for someone, and capture it, if he can get rid of the middleman. Although the work in a consulting shop is varied, and can keep you on your toes, the need to bill 40 hours of project time every week leads to a lack of self-investment and eventual burnout.
$30 vs. $130 might be an extreme case, but remember that you can't easily back out what a consultant should get paid from their bill rate. The bill rate doesn't just pay the consultant; it also pays the firm for shouldering project, schedule, and employee retention risk, and it also compensates the firm for the effort of recruiting and training new consultants.
There clearly is abuse (everything that can be abused in industry will be abused by someone). But you can't necessarily spot it from a simple comparison of bill rates and wages.
> it also pays the firm for shouldering project, schedule, and employee retention risk
There are some H1B Visa holders who pay into a business entity that sponsors them. When times are good, they pay more. When times are bad, they pay nothing. Since an H1B visa requires a sponsoring company, this is sometimes a safer solution than being (literally, in some cases) an indentured servant of BigCo.
not at all, the shop I worked at charged $250 an hour. When we charged $130 it was a discount hoping for more work. I was paid very nicely in terms of salary + bonuses, but I ended up working so much overtime, i would doubt my hourly wage was anywhere near $30/hr.
I saw the firm rapidly expand, we went from 15 people to 50. At first it was fun, and games. Some pizza + beer here, and some ping pong there. Bam we're working until 9 or 10 at night. But after a few years, I was burned. You can't work a person that hard for a long period of time.
I'm almost better now, but in terms of energy, I'm NO WHERE near where I was when I first started. The abuse is not in how much we make per hour, its in how we're worked.
Most of my friends that I knew from volunteering have left. Non-profit administration is another high turn over industry. They are always working on the next fund-raising campaign, donor push.
Some of these shops are very profitable and successful, and some of them aren't.
Either way, the person who's got the most to complain about this situation is the grunt, not the customer who imagines they could get the work for cheaper. The grunt is very aware that he could produce a lot more value for someone, and capture it, if he can get rid of the middleman. Although the work in a consulting shop is varied, and can keep you on your toes, the need to bill 40 hours of project time every week leads to a lack of self-investment and eventual burnout.