A few years ago I saw Erin Burnett interviewing a young man on CNN. It looked like he was sitting on a bench in a park. She asked the young man who looked like one of the Occupy protesters, namely young, clean looking and intelligent, “Did you know that Wall Street banks paid all of the bailout money that they received from taxpayers back with interest?” The young man looked at her for a moment with a look of mild surprise and then said, “No, I did not know that”. This was followed by a short speech by Erin Burnett in which she suggested to the audience with her trademark acidic wit, combined with her good looks and keen intelligence, that the Occupy protesters may not have been very well informed about what it was that they were protesting against.
She may have caught somebody on camera who indeed was not very well informed, and I think that this was probably her intention. In any case, the short interview ended there and she didn’t give that person a chance to ask her, Erin Burnett, CNN’s star reporter, follow up questions. I read somewhere online that she is married to a Wall Street executive, so one can hardly expect from somebody who makes as much money as she does and who on top of that is literally married to Wall Street to engage in actual journalism when it comes to issues that involves her own husband’s business and the class of people that she identifies with. Her intention was to engage in propaganda on that CNN segment, not to engage in journalism. Otherwise, she would have tried to find a protester who was well informed—there was no shortage of such people among the Occupy protesters—and would have given that person a chance to ask her some questions. But we don’t get journalism from CNN anymore, we mostly get just propaganda, and lots of it.
When did the CNN (Cable News Network) become the CPN (Cable Propaganda Network)? And did anybody notice?
A good follow up question to ask Erin Burnett would be, “OK, so at what interest rate did the Wall Street banks borrow the money from the taxpayers, and at what interest did they then lend it back to the same taxpayers?” You don’t really have to be well informed about how our economic system works to know the answers to these questions. Even I know them. After the Wall Street bankers crashed the economy with their fraudulent financial schemes, criminal schemes for which they were never prosecuted, they were able to borrow money from taxpayers to save themselves at an interest rate close to zero and then they turned around and lent the same money that they borrowed at extremely low interest rates back to the generous taxpayers at extremely high interest rates.
Because I sometimes open credit card offers that come with junk mail just to see at what interest rates these credit cards are offered these days, I know that the average rate in these offers is 18 percent.
You don’t have to be very smart to make a killing when you sit on top of an economic system that is tailor-made for you and that readily overlooks your crimes, even if these crimes sink the world’s economy. In fact, you would have to be rather stupid not to make a killing from a system that is designed to make you rich at the expense of everybody else. And whatever one might say about the Wall Street banksters, they’re not stupid.
But the ethics of the Wall Street’s profit margins are not the subject of my post today. I am only using them as an introductory example illustrating an extremely unethical profit margin of a certain type of people, protected by our system, because it’s relevant to the real subject of the post, highlighted in the title.
There’s a lot of grumbling among translators on social media about the low rates that many translation agencies are offering to pay translators, and some translators argue that the main reason for the low rates is that the translation agencies are keeping an excessive amount of money for themselves instead of sharing it more equitably with the people who created the product called translation.
50/50 is the Typical Split Between a Brokerage House and an Agent in the Real Estate Industry
What then is a profit margin that would make sense from an economical viewpoint both for the translation agency and for the translator, a profit margin that would at the same time be practical and morally justifiable?
Let’s compare the typical profit margin of most translation agencies, which I believe is between 40 to 60 percent, to another industry that also uses a system of agencies employing large numbers of independent workers, for example, the real estate industry.
Here in the United States, most real estate agents work as independent contractors for real estate brokerages large and small and the typical commission paid to a real estate broker who finds a client willing and able to purchase a real estate property is generally 6 percent of the price of the property. If a house sells for 200,000 dollars, a commission of 12,000 dollars is paid by the seller to the real estate brokerage firm, which keeps 50 percent for itself, while the real estate agent keeps the remaining 50 percent. What does the real estate agent get from the brokerage firm in return for the 6,000 dollars in this case? I’m not an expert on real estate, but I assume that the agent must be getting a lot of support from the agency: access to information, a desk and a phone number at an office, a familiar company’s name on her business card, etc. Nobody is forcing real estate agents to work for a real estate brokerage firm, and I assume that the real estate brokerage firms compete among themselves to keep the best agents in their own stable of agents by offering them special perks.
If an agent is unhappy with a brokerage firm, she can dump the agency and join another one, she can work on her own, or she can start her own brokerage firm, all of which happens quite frequently.
There are also several other types of arrangements that are commonly used in the real estate business. New real estate brokerages are trying to figure out how to make profit by attracting new customers with a lower profit margin, for example with a type of brokerage called Sell By Owner, which offers only a minimum standard package of services in exchange for a low standard fee, and some home owners simply sell their houses directly to home buyers without going through a brokerage, etc.
But the six percent commission, split evenly between the real estate firm and the real estate agent, still seems to be the most common type of arrangement in the real estate business at this point.
And I think the reason for this is that, although the 50 percent that real estate agents have to pay to the brokerage firms is a lot of money, this profit margin is both practical and ethical, both from the viewpoint of the brokerages and of the real estate agents.
“I Don’t Care How Much I Pay the Translator as Long as I Can Keep My Profit Margin”
When I was just starting my illustrious career as an independent technical translator in the translation industry almost three decades ago, I often worked for a one-man translation agency in San Francisco. I liked working for his tiny agency mostly because I really like the guy, although he would often pay me late when his clients were late with payment. I would sometimes have to call, e-mail or fax him several times before he would finally call me to announce: “Your ship just came in, Steve, I am mailing the check, sorry for the wait”. I had to keep reminding him that I wanted my money because so many of his clients were paying late that he had to constantly “rob Peter to pay Paul” as he used to put it.
One pearl of wisdom that he shared with me almost three decades ago was this, “I don’t care how much I pay the translator, as long as I can keep my profit margin”. We never discussed any numbers, but I am assuming that his profit margin was typically between 40 to 60 percent. And here is another pearl of wisdom from this particular source that I would like to share with the readers of my silly blog: After Proz came online at the beginning of the new millennium, he told me that he likes to work with translators who are listed on Proz because “they have been trained by Proz to work for low rates”.
I don’t think the problem is the typical 50/50 split between a broker and a worker, especially since it also exists in other types of businesses and professions. Unlike the Wall Street type of profit margin, it’s not an excessive profit margin or an amoral arrangement.
I think that the 50/50 split between a translation agency and a translator makes sense. Translation agencies don’t provide a prestigious business name, or office space or any of the other accoutrements that real estate agencies provide for their agents. But they supply something that is even more important than the usual business infrastructure – they find a customer who needs a translation. That is why the agencies, the good ones, anyway, in my opinion deserve a healthy profit margin.
I think that at the core of the problem is the creation of the corporate business model of large translation agencies, which simply pay as little as possible because they don’t care whether translators can live on the rates they want to pay them. Just like the appearance of blind translation auction sites such as Proz, which definitely also helped to drive translation rates down (and there must be more than a dozen such sites in existence now), the application of the greed-driven corporate business model to a translation agency can be also traced back approximately to the year 2000, which is when I noticed that rates stopped going up commensurately with inflation.
I also think that translators who look for work on blind translation auction sites designed to keep the rates paid to to translators at a very low level because the translators must constantly compete with each other based on the rate, or who work for huge translation mega-agencies also offering mostly very low rates, should not be complaining about the sad status quo on social media, because they are the ones who willingly created a monster.
It would be much more constructive if instead of complaining about how unfair things are in “the translation industry”, the translators who are unhappy with what is going on started doing what real estate agents who get tired of being mistreated by a real estate brokerage often do.
At the very least, they need to stop working for the monster of their own creation, be it a mega-agency or a translation auction site, and try to find another brokerage that provides better working conditions for them.
They can also try to figure out how to find direct clients, in which case they will be able to keep 100 percent of the payment for their work.
Or they can try to start their own mini-agency and see how things look when you are on the other side of the brokerage business model.
But because something like that would involve a lot of work and creative thinking, and because something like that might also take them out of their precious comfort zone, they prefer to just waste their energy by venting their frustration on social media, where so many people will agree with them because misery loves company.