Recently, I completed a copy-editing job involving three related reports for which I was paid a decent sum. It was a flat rate for what eventually took me about four weeks to complete, while juggling all of my other responsibilities. It got me to thinking about price of one’s work.
Wondering what my hourly rate would have been, I did some basic calculations and found that I earned about $100 per hour. Wow, I thought. That sounds great! My estimation of my own self-worth got a little bump up. If I were to hang out my shingle and became a freelancer, I could charge a handsome amount!
But after the euphoria wore off, I wondered if I could really, in the marketplace, charge that much. If an item’s value is based on not only what the seller is willing to sell it for, but also what a buyer is willing to pay, what am I really worth?
One of the hardest things to do in any economy is set prices. Oh, I suppose it’s easy enough if you sell apples or pencils, something of uniform quality and unquestionable utility (although even that is not without problems). It mostly comes down to supply and demand, and what the buyer is willing to pay.
When you sell intellectual services, such as lawyering, consulting, or editing, the issue of price gets much more complicated. Is your service of equal quality to the next guy’s? Is what you are offering the same or different? How much experience do you have? And, on top of all that, what is the buyer willing to pay?
Prices for intellectual services are all over the map. I once hired a job coach who charged $100 an hour. At the time, I thought it was high, but her advice was solid and she was completely focused on my needs, and if I could be worth that much, she certainly could too. I’ve also hired a lawyer for $200 an hour. Again, that seemed high, but he got the job done and I had no complaints. Recently, a discussion board I follow mentioned that editing services commonly run in the range of $50 to $70 per hour, but can be purchased for as little as $2 per hour in India! Clearly, we are far from a settled price for this kind of thing.
For someone just starting a business, it is almost impossible to know what a fair market rate is. Some set prices too high, only to find that no one is buying. Others are tempted to give their services away, just to get established. But as one job coach points out, “Every professional-grade project you complete [for free] is a contract denied to professionals who can’t possibly compete with your rates. Your arrangement is devaluing your skills and theirs.”
It is even harder for someone fresh out of school to understand business economics. Up until the point of graduation, most students do work for no pay at all. In fact, many pay to do the work. Then, when entering the job market, they’re expected instantly to have some idea of how much they can charge for their labor, and are often criticized for not knowing how to function in the marketplace (the level of snark in most of this criticism is a bit much for my tastes). But since they don’t have adequate training or any real-world experience, it is unreasonable to expect them to know.
As much as we’d like to believe that self-worth is independent of what others think of us, the reality is not so simple. People are social animals, and having others find you useful has a huge bearing on how you perceive yourself. And in the market, usefulness becomes dollars.
After nearly 20 years in the corporate world, I still don’t know what I’m really worth. If I were to start my own business tomorrow, would I succeed gloriously or fail miserably? Would someone think I’m worth $100 per hour or would they go with the service from India at a 98 percent discount? Would my own self-worth match how others value my work, or would they be worlds apart?
Often, I just don’t want to know.