I wrote this because of something I saw. A friend of mine has a popular iPhone app, and he was pressuring some overseas consultant to lower the final price for some work because he wasn't happy with the result.

I don't think you should be leaning on your workers after the fact - it's up to you to ensure you hire quality worker, and pay them bit-wise so you are both happy.

Talking about "people in Eastern Europe" is just silly... Which country? Estonia is different to Ukraine, which is different to Romania, which is ... Talking about "people in Eastern Europe" is like putting Mexicans and Canadians in a "people in North America" bag (and trying to get some meaningful economic average out of it)

Why does this depend on a country: "he was pressuring some overseas consultant to lower the final price for some work because he wasn't happy with the result". If the result was not right according to the specification, then why not lower the price? If the result was correct, then changing the price is not right. But what does the country have to do with that?

Proportions of spending are not a good comparison of wealth between countries, only within them. People tend to live approximately at what they can afford, perhaps borrow or save a bit. Most people will spend 30-50% on housing and 10-30% on food, just because they will adjust their tastes to their means.

What you can afford with the X% however differs greatly between countries.

In most of Eastern Europe, spending 30% of your income on housing will get you a 30-year loan for a 600 sq. foot apartment in a "soviet projects" style high-rise apartment block. Only middle class can afford a car, and only the upper middle class or wealthy have more than one car per family and a house in the suburbia. It is common for three generations to live together to save on housing and childcare.

Also, while the prices of services are adjusted to the local labor rates, import goods are not. A new laptop is a significant purchase - similar to how you buy a car in the US.

2. Estonia and the Ukraine are much more similar to each other than any Eastern bloc country is to the US. And I wouldn't lump Canada and Mexico together for discussion, but I would surely lump Mexico in with Central/South America and talk about them.

3. In America, you can agree to a well-defined contract and enforce it in court. Sometimes a buyer shouldn't pay for work completed. If you are dealing with a foreign contractor, neither party has legal protections, the buyer has a lot of leverage and more money, and as such should treat the contractor extremely fairly.

The difference between Northern Michigan and Southern California or New York is substantially larger than the difference between Poland and Romania or Ukraine.

The biggest difference between those countries and the US can be summed up in one word: market.

They simply have a very limited local market for these skills, but plenty of people there have some skills and are prepared to work very hard to get more. Their cost of living can - at least in the former eastblock - easily approach the cost of living in the US. Plenty of ex eastblock countries are now using the Euro, either for their day-to-day transactions or already for their debt, even though they still have a national currency (because the Euro is more stable, banks like to borrow money in Euros to individuals that get paid in a local currency, very risky but many banks got burned badly during hyperinflation at the end of the 80's).

We agree on the contract bit, I think.

The contract situation is something that is not so important when using systems like rent-a-coder, you're not going to use it to write the gut of an ATM or a mission critical piece of software for a financial institution or a health care provider.

Rent-a-coder is primarily intended for relatively short running simple projects that you want to get done on a minimal budget.

The whole idea of relying on such cheap labour for something that you put a very high value on (high enough to go to court over) is counter to the intended purpose of the service.

We can go into an endless rabbit hole about which difference is bigger, on which parameters. Northern Michigan and Southern California operate on a substantially similar and similarly enforced set of laws. This is not the case for Poland, Romania or Ukraine.

And before you say that the highest number, $21,000 is meaningful in anyway, let me just add that I've paid programmers $65,000 a year (in Poland).

Please, people, stop generalizing. "Eastern Europe" is just as silly as EMEA, "SouthEast Asia" or "North America".

Re. 2: Good luck telling people in Estonia and Ukraine that they're similar in any way ;) "Eastern block" was not a one big lump of states by people's choice and did not break without a reason.

Re. 3: What really bothers me in the previous post is something completely different than you say here. Of course - you can double check to be sure you're right before blaming foreign contractor for the quality of work - because of the lack of legal protection. But if your requirements are not fulfilled - why does it matter if the work was done in US or somewhere else? Your friend wasn't happy with the result. When you say you shouldn't be "pressuring some overseas consultant" in a post about EE countries and income, it seems to me a bit condescending...