Some Thoughts On What Is Referred To As Declining Rates Being Paid to Translators

There are several reasons why people are talking about what is referred to as lower or declining rates. One of them is the never-ending recession. Since the bubble burst in 2007, business has been slow in many sectors of the economy and translation industry must have been logically affected as well.

Then there is a plethora of other sinister developments that translators fear have been and will continue to exert downward pressure on rates:

1. Machine translation, which is supposedly replacing human translators and soon will turn most human translators into mere “post-editors of MT”, also referred to on translators’ blogs as “human hamsters”.

2. “Online translation venues” offering “translation workflows” where legions of hapless translators compete with each other on who will offer a lower rate. As P.T. Barnum said 150 years ago (if he’s the one who said it), there’s a sucker born every minute. And a few such immensely innovative venues where translators are perfectly free to underbid each other once they have paid a yearly membership fee for this privilege are born every year.

3. Reports from companies such as MyGengo.com or Common Sense Advisory which seem to indicate, among other things:

a) A trend toward lower prices for translation, although

b) At the same time, they also stress hunger on the part of translation consumers for highly specialized translation services that can be provided only by highly educated, experienced human translators. This hunger is understandable in a world where information, which may be encoded in a foreign language, is and always has been the most valuable currency.

See a highly entertaining post about the cognitive dissonance created between the propositions a) and b) on Financial Translator’s blog.

So what is really going on? Did the rates that are paid to translators decline in the last few years?

I don’t pretend to know about what is really going on more than the next guy, providing of course that this guy (or girl) has been earning a living as a freelance translator for the last 25 years as I did. But I think that the answer depends to a large extent on who your customers are.

Like many freelance translators, I work for two types of customers, direct customers and translation agencies. I did not see a downward pressure on rates among the former, but I did notice a downward pressure on the rates offered to me by the latter type of customer.

As I have been increasing my rates in order to keep up with inflation, over the years I lost most of my agency customers, except for two agencies, both of them very small operations. This year I lost one them for good because I refused to lower my rate by 2 cents. I offered a discount of 1 cent, but that was not enough for this agency. So I stopped working for them, after about 5 years of fairly consistent supply of work from this particular source. I see in my files that they paid me between about 6 to about 12 thousand dollars for my work every year between 2007 and 2012.

Thoughts on Translation calculates in one of the posts on her excellent blog that reducing your rates by 1 cent per word results in a lost revenue of about 5 thousand dollars a year, depending on your output. I can’t find the post right now, but it is not a difficult calculation to make. Let’s say that you translate about 10 thousand words a week and take 2 weeks of vacation every year: 10,000 x 50 weeks = 500,000 x 0.01 US dollars = 5,000 US dollars.

The other agency, which is in fact a one man operation, did not explicitly ask for a lower rate. Instead, it changed its modus operandi, and not too subtly.

This guy used to call me or e-mail me when he needed me to translate something, and we would then agree on the rate and on the turnaround time. But since about a year ago, he started sending the same job offer in the same e-mail to several translators while asking for availability and turnaround time, so that whoever would offer the shortest deadline and the lowest rate would get the job.

I tried to play this game for a few months, but since I was consistently losing the jobs to other people who were either cheaper or faster (or both) than this mad patent translator, I finally read the guy the riot act and told him that I would respond to his e-mails only if they were specifically addressed to me.

So far I did not lose this agency completely. He is still sending me e-mails with job offers that are sent to multiple translators which I ignore. Most of the time he can place all the work with the translators in his stable of freelancers who don’t mind to fight among each other for work in this manner. But sometime he calls or e-mails me when everybody else is busy. This small agency has been sending me work for 18 years now and I see in my files that the guy paid me for my work between 6 to 27 thousand dollars a year, every year since 1994.

So how much did I lose by trying to resist downward pressure from two of my clients who are translation agencies, since one of them sends me now no work at all, and the other one less work than before?

I believe that I did not lose a single cent because I did not experience downward pressure on my rates from the market segment that is much more important for my freelance translation business than translation agencies, namely from direct customers.

In fact, I slightly adjusted my rush rate to most of these customers upward, depending on how sensitive I assumed they would be to a price increase.

My website and referrals from old customers and other translators more or less constantly bring in new work from new customers. For example, last year I gained 9 new direct customers in this manner. And I see that this year so far I gained 10 new direct customers through my website and through referrals, one of them from a reader of this blog.

Translation rates are always in flux. As Heraclitus put it some 2,500 years ago according to this translation:”All entities move and nothing remains still”. Over time the rates tend to go up some, and sometime go they down. But as far as I know, although there have been a number of bubbles in recent time in the economy, such as the “Internet bubble” about twelve years ago, or the “real estate bubble” and “bank debt bubble” more recently, there has been no “bubble” in prices that are paid for translation because they have never been very high.

It is only natural that some translation agencies will try to use any means to squeeze out more profit from people who work for them, including the threat of machine translation and the fact that thousands of translators are competing with each other and many “subprime” translators are offering pitifully low rates.

It makes sense for translation agencies and businesses such as Common Sense Advisory to create a narrative according to which downward pressure on rates paid to translators is a natural force that cannot be resisted.

And it also makes sense to have a strategy in place for replacing customers who would like to force us to lower our rates because “translators must be more competitive when the economy is bad” by other customers, who are usually found in a different market segment.