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Proposing FWR = Fair Word Rate
Thread poster: Heinrich Pesch
Sheila Wilson
Sheila Wilson  Identity Verified
Spain
Local time: 05:17
Member (2007)
English
+ ...
3 replies Aug 24, 2016

David GAY wrote:
And what about pension? You pay social contributions but it does not mean you'll receive a decent pension.
Employees get very good pensions compared to freelancers.

Quite true, David. I myself only contribute to the state pension here in Spain, but I'm already receiving two handsome pensions from energy companies back in the UK, both non-contributory ones. My state pension when/if I eventually receive it (from the UK, France and Spain - however that's going to work ) will be worth less.

Samuel Murray wrote:
Sheila Wilson wrote:
[Think about] illness, ... maternity/paternity..., and how about holidays?
A salaried employee has everything above covered in their monthly pay packet. We must include these costs in our rate.
Sure, but these things apply to salaried workers also. For example, salaried workers only get a certain number of paid sick days per year, and the value of those sick days are included in the cost-to-company (i.e. "gross") salary. So if the FWR is based on the gross salary, it should include those things automatically.

In my experience, the company will pick up the cost of the odd day of sick leave. But social security contributions (which are lower for an employee than for a freelancer) pay for every period on top of that. Keep providing sick notes from the doctor and you can stay off work on full pay for an awful lot of time. And for maternity leave I had several months on full pay way back in 1986. I imagine the entitlement is longer now, whereas if I, as a freelancer, magically became pregnant at 60 , I'd get zero income if I didn't work. The basic €250 per month freelancer contribution in Spain doesn't cover maternity.

Heinrich Pesch wrote:
If we compare freelance translators in different parts of the world, they might have the same grade of proficiency, experience, education and technical equipment, but:

the one in country A has to pay every month already USD 1000 for rent, must buy everything from the shop for hard money, pays perhaps 30+ percent income tax and 20 percent insurances etc.

the one in country B lives in a house built by her ancestors, with orchard, bees, vegetables, hens, some cattle, or if she does not own these herself, her mother does or a near relative, she grows her own wine, distills her own slivovitz etc.

So would it be fair to pay both the same rate?

To be perfectly honest, I could slash my rates to EUR 0.001 nowadays and still live pretty comfortably as I have savings and alternative income streams (which wasn't the case when I was younger!). Would that be a wise thing to do? Would it even be ethical? Not to my mind, it wouldn't.

Why should someone who happens to own property in the country charge less than someone living in the city in rented property? I imagine she too has to pay tax and insurances? And probably needs to travel into the city quite frequently if she wants to avoid becoming/staying a country bumpkin who's totally out of touch with the tremendous technological advances in the world. An out-of-touch translator is not a perfect translator nowadays.

Also, where are their respective clients? Where is their market? On the Internet mainly, a.k.a. just about anywhere in the world. Of course the one who can live with less income can afford to be a little more competitive, and/or more choosy about what jobs to accept. Already that's a great advantage. Drastically undercutting the market rate is doing yourself an injustice and serves in addition to grossly devalue the labour of your peers. That's a no-win situation. Even the clients lose out in the long term as the professionals drop out of the "race to the bottom" and amateurs fill the void. And that's precisely what we're seeing.

I don't think there's anything fair about this type of formula. All it can serve to do is indicate a minimum survivable rate. And then two days later that magically becomes the maximum rate that certain agencies will pay, and your "best" rate has to be lower. What it needs is for all of us who call ourselves professional or career translators to set our own rates, bearing in mind we're producing real added value for the end client through the application of skills that we have worked hard to gain. The ROI can't all be for the client. We need to refuse to service the bottom-feeders and instead set about finding clients who will pay our rates. They ARE out there.

Sorry, I've gone into preaching mode again, haven't I ?


 
gayd (X)
gayd (X)
@Samuel Aug 24, 2016

1.
Heinrich never mentionned "turnover" in his initial post. Yes, it's true, but it is in fact just what it is.
In other terms, it's a gross revenue and by no means an income
2. I understand that 1000 was just for computional purposes.
But I prefer the following method: you calculate the rate you need to reach the minimum wage in your country.
(I think it's not less than 0.06 euros in Western Europe)= minimal rate
If you consider it fair that a translator sh
... See more
1.
Heinrich never mentionned "turnover" in his initial post. Yes, it's true, but it is in fact just what it is.
In other terms, it's a gross revenue and by no means an income
2. I understand that 1000 was just for computional purposes.
But I prefer the following method: you calculate the rate you need to reach the minimum wage in your country.
(I think it's not less than 0.06 euros in Western Europe)= minimal rate
If you consider it fair that a translator should earn twice as much as the minimum wage (usually, in developped countries, the average income is twice as high as the minmum wage), you multiply this rate by 2.
If you think he should earn 2.5 as much as the minimum wage, you multiply by 2.5 ...
3. social contributions are obviously not to be confused with taxes. Employers pay social contributions on the wages
they pay to their employees, employees pay their share (difference between the gross and the net salary)
A freelancer pays both as he is his own employer. And then you have to pay taxes on your personal net income.
Net income means net of social contributions. It does not mean net of taxes...

Samuel Murray wrote:

EvaVer wrote:
We should not encourage clients to underpay ... just because the translator happens to reside in a more or less low-cost country, so that this calculation is totally wrong. The rate should ... [depend] on the market.


You're talking about market rates. Heinrich is talking about living wage rates. These are two different things, so the calculation is not wrong. The calculation is wrong for calculating market rates, yes, but that is not what we're trying to calculate, is it?

==

David GAY wrote:
The HFR defined by Heinrich is the rate needed to reach a 1000 USD/month turnover (gross).


1. Heinrich never mentions "turnover" in his initial post.
2. Yes, but Heinrich is not suggesting that USD 1000 is the ideal salary. The "1000" is just a round number to make calculating the actual rate easier.

2) Taxes are not to be confused with social contributions.


What do you mean?

3) I doubt that the average monthly income in Spain is 3600 USD anyway. I understand he takes the PPA data but it's totally irrelevant.


I agree that PPP is not a good measure, because the outsourcer doesn't want to know what PPP rate to pay, but what actual rate to pay (which will be converted into the translator's currency not via some PPP calculation but via normal exchange rates).

4) In many western northern European countries, 1000 euros/month is the minimum wage.


In my opinion, that is irrelevant to this discussion.



[Edited at 2016-08-24 14:33 GMT]
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gayd (X)
gayd (X)
a comparison based on the minimum wage is more significant than a PPA wage Aug 24, 2016

I think a Spaniard would laugh if you tell him the average (PPA) income in Spain
is 3600 USD per month. PPA wages only exist in the mind of economists and is
a virtual number which is used to compare the living standards between
the countries and cannot be used as absolute numbers. The net average wage in Spain is
1718 euros per month according to wikipedia.
For that reason, I think it's far more relevant to use the minimum wage as a comparision
and multipl
... See more
I think a Spaniard would laugh if you tell him the average (PPA) income in Spain
is 3600 USD per month. PPA wages only exist in the mind of economists and is
a virtual number which is used to compare the living standards between
the countries and cannot be used as absolute numbers. The net average wage in Spain is
1718 euros per month according to wikipedia.
For that reason, I think it's far more relevant to use the minimum wage as a comparision
and multiply by a factor (for instance, by two or 3 ) to get the fair rate.




[Modifié le 2016-08-24 15:52 GMT]

[Modifié le 2016-08-24 16:08 GMT]

[Modifié le 2016-08-24 16:17 GMT]
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Diego Méndez Romero
Diego Méndez Romero  Identity Verified
Spain
Local time: 06:17
German to Spanish
+ ...
Calculating the incalculable Aug 24, 2016

David GAY wrote:

I think a Spaniard would laugh if you tell him the average (PPA) income in Spain
is 3600 USD per month. PPA wages only exist in the mind of economists and is
a virtual number which is used to compare the living standards between
the countries and cannot be used as absolute numbers. The net average wage in Spain is
1718 euros per month according to wikipedia.
For that reason, I think it's far more relevant to use the minimum wage as a comparision
and multiply by a factor (for instance, by two or 3 ) to get the fair rate.



[Modifié le 2016-08-24 15:52 GMT]


Average wages and average income are different things. Average income includes e.g. return on capital, Social Security, etc. Moreover, if you take the PPA measure, you must always use a PPA measure for comparison purposes. So I agree with you: PPA income is a virtual number, valid only for very specific purposes.

Living standards do not only vary between countries, but also between regions in a country. In the region of Madrid, average wages can be twice those of some countryside regions. The Spanish minimum wage stands at 655 euros, but very few people get that amount while working full-time (most get much higher wages). In other countries, however, the minimum wage is what half the workers are getting. So "minimum wage" means "normal wage" in some countries and "lowest-class wage" in other countries.

Anyway, calculating a fair rate for *any* profession in any country is impossible.


 
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