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 »  Articles Overview  »  Business of Translation and Interpreting  »  Financial Issues  »  Translation: A Market in Crisis?

Translation: A Market in Crisis?

By Danilo Nogueira | Published  06/10/2005 | Financial Issues | Recommendation:
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Quicklink: http://www.proz.com/doc/325
Author:
Danilo Nogueira
Brazil
English to Portuguese translator
 
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Translation: A Market in Crisis?
Colleagues who attended the 2002 ATA meeting complained that there was a significant reduction in the number of agencies present. Nothing wrong with the ATA itself: just a sign of the times, for our trade is in a state of crisis and the signs of deterioration are seen everywhere, not only in the paucity of participants in the ATA job exchange. Responses to the crisis have been many, diverse and often lacking in objectivity. It seems that translators, usually so logical in dealing with technical issues, tend to be a little bit emotional and subjective when the matter is money.

There is a Recession Outside, Can't you See?

We should perhaps begin by remembering that there is a worldwide recession and our market could hardly be expected to pass through it unscathed.

Improved communications usually mean a narrowing of the price curve, i.e., a reduction in the difference between highest and lowest prices.
Who—or what—is to be blamed for the recession is a matter for discussion. In Brazil, many blame globalization combined with U.S. and European protectionism. Perhaps, but we must admit that neither the U.S. nor Europe are in very good shape these days either. In any case, this is not an issue to be discussed in the Translation Journal and, even if it were, I would not be the person to discuss it. However, I believe nobody can deny that we are in a recession—and recessions have a cruel pincers effect on the translation market.

Translators of the World, Unite!

On the one hand, there is less work going around. When there are fewer jobs in the market, rates fall and there is nothing we can do about it. This is called the law of supply and demand and this law has not been repealed so far, the efforts of certain administrations notwithstanding.

Some translators claim that this is entirely our fault. That if we all refused to work for less, clients would have to pay us what we want. There are cries for union among translators, for the need to present a united front, even claims that it is unethical to charge less than the next guy and all.

Fee uniformity is unattainable. Price competition is universal where the market is not dominated by a cartel, and cartels can only exist (legally or otherwise) where the market is dominated by a very small number of agents. There are untold thousands of translators in this world, and untold branches and sub-branches in the translating trade, a fact that would make it impossible to create a cartel.

Not even the legal and medical professions, well organized in most countries and powerful in many, often dominated by an elite of experienced professionals with high earnings and carefully protected against unauthorized entry, have ever been able to implement uniform fee policies.

Debasing the Market

There is the aspect of ethics, of course, and some claim that it is unethical to charge less than the next guy. I find this a perversion of ethics: an assertion that Joe has the obligation to go hungry, so that Moe can keep his belly full. In a world where there is not sufficient work to keep everyone busy all the time, if all charge the same prices, penetrating the market will be a near-impossible task. In other words, a uniform-rate system would protect those who are already more powerful.

In addition, some clients really cannot afford (or will not pay) top-tier fees and would simply not have the jobs done professionally, thus further reducing the amount of work available. Some people have argued that this problem could be solved if we prevented non-translators from translating. Whatever that means, it cannot be done. Get real, please.

Fair is Fair

Two of my previous articles for the Translation Journal touch on the matter of prices. If you are interested, you can click here, and here and read both.

I'm trying not to repeat myself too much and will refrain from discussing the matter of price fairness in depth here, but, for the sake of completeness, I must say that, in my opinion, any price agreed between two parties who are reasonably familiar with the market are fair prices. In other words, if an agency and I agree that a certain translation is to be done for USD 1,000, that is a fair price, all other factors notwithstanding, because both the agency and I are familiar with the market and neither is easy to fool.

The Other Jaw of the Pincers

I said recession has a cruel pincers effect and that, on the one hand—should have said on the one jaw, perhaps—we have the reduction in the amount of translation work available in the market. The other hand—or jaw—is represented by the fact that many of those laid off or forced into early retirement by the recession, decided to try their luck at translation, thus increasing the labor pool available, worsening the imbalance between supply and demand, and driving prices down even further.

Most of those people are specialists and only accept work in the areas they have worked in their previous lives. Some of them are very bad, either because their command of either of both tongues involved was sufficient to conduct business but too restricted for translating, or because they simply do not have the patience and humility to translate what the author wrote and prefer to write a new text, based on their opinion of what the author should have said, a matter dealt with in a previous article.

However, many of those guys have a genuine talent for translation and do a great job, meaning that they have earned a place in our community and there is a lot we can (and should) learn from them. And we should not forget that so many of us used to do something else for a living before we became translators. So, please, think twice before throwing the first stone.

Big Agencies, Big Projects, Big Problems

In line with the worldwide trend towards consolidation, many agencies have also been swallowed up by larger competitors in the recent past. Takeovers are usually justified on the grounds that consolidation will reduce costs, but in the particular case of translation, I suspect the larger the agency, the higher the costs. This may become a severe problem, because a large agency with a very high overhead often has to compete with mom-and-pop operations with virtually no overhead to speak of.

To make things worse, jobs are becoming larger and larger and clients are demanding—and getting—higher and higher volume discounts. However, when translation is involved, there are very few economies of scale. The money that can be saved by using leading-edge translation methods and tools such as translation memory software is often devoured by the higher overhead required to manage fifty translators working into five different languages.

And, of course, because so many translators must be involved to meet the deadline, it is a small or medium-sized job as far as each individual translator is involved, although the final client extracted a jumbo-sized volume discount from the agency, a burden that, of course, is passed on to us. Who else?

The Small Boys Finance the Big Boys

Another consequence of the current crisis is that many agencies are going bankrupt or simply evanescing. Mailing lists show messages posted by desperate translators who wrote to an agency reminding them that an invoice was overdue and discovered that the agency is no more. Nobody answers the phone, nobody replies to messages; the site has disappeared from the Web. A generous colleague that lives in the vicinity of the agency pays them a visit and all there is to be seen is a locked door. Gone, simply gone into the vortex of recession.

Other agencies are paying later and later. Thirty days quickly becomes forty-five and forty-five becomes sixty, if not ninety or more. Many agencies, perhaps most, have always been undercapitalized and the matter is getting worse with the recession that forces them to shave their margins real thin, perhaps too thin to meet their overhead.

They must receive payment from their client before paying the translator, while clients, many of them also hard up for cash, are in no hurry to pay. I suspect many agencies don't dare press clients for payment as a matter of marketing policy and, in times of tight money, if you don't press for payment, you don't get paid. Because late payment is tantamount to a forced loan, this means that translators often end up financing big business.

Some translators tend to call all those agencies dishonest. This is unfair. Most agencies are honest, even if so many are undercapitalized, too lenient toward their clients, or plainly disorganized. There are a few rogues in the business and a couple of guys that are probably raving mad, but I'd say most agencies try to do the right thing. Unfortunately, what I need to pay my bills is money, not good intentions.

Globalization and the Narrowing of the Rate Curve

The Internet opened the gates, and the barbarians rushed in. Before the Internet, very few of us had clients outside our countries. Now very few do not. The world has become our market. The resulting issues are often confused and misunderstood.

First, it is true that the Internet has tremendously improved communications among members of our market. Improved communications usually mean a narrowing of the bell-shaped price curve, or, in other words, a reduction in the difference between highest and lowest prices. This is also called a reduction in price dispersion.

How does this work? Let us say that for a certain language pair and direction, the majority of rates tended to range between LSD 8 and 12 ("LSD" stands for Lower Slobovian Dinar, the currency of Lower Slobovia) or, put another way, LSD 10 +/- 2. A few guys charged more than LSD 12 and a few charged less than LSD 8, but those were too few to affect the market.

With improved communications, more clients would know that there were guys charging only LSD 8 for what they were paying LSD 12 and would try to do business with these guys. The guys who charged LSD 12 would be out of work and have to lower their prices, but, on the other hand, the guys who charged LSD 8 would have more work and would raise their rates. The resulting rate band would then be narrower, probably something LSD 10 plus or minus a few cents.

If the amount of work going around and the labor pool available to tackle such work were stable, in practice this reduction would mean an "averaging" of prices. Some of the priciest guys would complain, of course. However, a lot of the less well-paid guys would be making more money.

However, we must remember we are in a recession, with the consequent reduction in the amount of work available. That necessarily brings rates down and has nothing to do with the Internet. In other words, the guy who charged top rates had to charge average rates because of the Internet and may be forced to cut rates even further because there is less work to do.

The Barbarians Crashed the Gates!

Of course, then you have the invasion of the Third-World tribes. Now that so many people have Internet access, hordes of Third-World translators are offering their services to First World clients.

As a consequence, the narrowing of rates curve caused by improved communications operates over a far wider range of prices and the final "averaged" rate will be a lot lower, because third-world rates tend to be vile, compared to what is current in North America and Europe. I should know: I live in Brazil and I am told that the situation is even worse elsewhere.

Translation and the TV Set

Will this make North-American and European translators go the way of those guys who use to make TV sets in the USA?

Now, this issue has to be tackled very carefully. To make things easier, I will take the USA as an example. You may substitute Germany or France or Italy or whatever, as required to fit your particular case.

Can you Translate from Lower Slobovian?

U.S. agencies will only accept translation into English done by non-native speakers of English if no native is available. The other day, a colleague mentioned she had to hire a non-native for a job from a minor European language into English. She would never consider a non-native for translation from French or German, of course.

With the market expanding beyond its traditional concentration on FIGS (French, Italian, German, Spanish) this may become a growing concern for buyers, but in this case the Internet will facilitate everybody's lives: today, it is a lot easier to find a translator for a language of limited diffusion (LLD) than before and, conversely, those translators have a better chance of finding work.

So, if your native language is English, you translate into English, and live in the USA, you are far from being an endangered species. In fact, your workload may increase, because there is a dearth of native translators into U.S. English outside the U.S. and some clients may take advantage of the Internet to get the real McCoy.

On the other hand, if you live in the USA and translate from English, you have good reason to be concerned, for there is a good chance someone back home will offer to work for less, thus depressing rates. For instance, if you are Brazilian, live in the U.S., and translate into Portuguese, there is a good chance someone down here will try to steal your job.

Local rates for the local guys?

Many agencies try to pay "local prices" to us South-of-the-Rio-Granders, meaning that when working with a Brazilian translator based in Brazil, they want to pay Brazilian rates. Not so fast, is the usual answer. To get Brazilian rates, it is preferable to work for Brazilian clients, who pay faster and are easier to sue if they don't pay on time. In addition, most U.S. agencies pay by check, and cashing a foreign check usually requires a certain amount of time and expense. In other words, no way Brazilian translators will work for a foreign agency for Brazilian agency rates. As a matter of fact, a U.S. agency trying to hire translators in the Brazilian market must compete against direct clients, not against local agencies.

Incidentally, this also means that Brazilian translators now working for foreign agencies are raising their local prices—narrowing of the rate curve at work again.

Can those Third-World Guys Translate?

There have been bitter complaints against the quality of translations provided by people from the third world. U.S.-based translators for instance often claim that their Brazil-based colleagues don't know English well enough to translate. To which the locals usually retort that the guys who live in the U.S. write "funny" and can hardly qualify as native speakers after living abroad for a couple of years.

I must say there is a grain of truth in both assertions.

As so often happens, however, hasty generalization is contrary to the interests of truth. Lately I have edited many translations into Portuguese for some U.S. agencies and, from my experience, I could draw examples of good and bad translations done on both sides of the Rio Grande. If I wanted merely to prove a point, it would be easy to collect a few of them and say look what those guys do! On the other hand, it would be equally easy to collect examples to prove the opposite point.

In fact I don't think crossing the border in either direction affects the quality of our work.

First the problems, then...

You'd probably expect me to finish with a solution. Sorry, I have none, and my purpose in writing this article was try to help clarify the issues involved, not to offer solutions.

As I see it, the most important factor in the present crisis is the recession, and there is very little we can do about it. Of course, we can become more efficient and increase our marketing effort, but, until the economy rebounds, it will be a zero-sum game: the client you gain is the client somebody else loses.

Fortunately, all recessions eventually end and this will be no exception. Perhaps, the best thing to do is to weather it out patiently. To live simply and enjoy the simple life: when was the last time you had a chance to work less than 50 hours in a week?






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