Fair price for consulting services?

My friend and colleague Kevin Powick recently posted a help wanted ad for consulting work: 30-40 hours per week at $35/hour over a period of about six months. One way to look at this is that for someone who doesn’t have a job that’s over $25,000 that they didn’t have before. Some people who charge more for their services consider this to be an indignant slap. I’m fascinated by the thought processes on both sides.

Some of the forum responses include "you get what you pay for" and "my time is worth more than that". There are some legitimate arguments here but they come across as being more argumentative and reactive. Perhaps this should be approached more constructively.

1) I believe Kevin’s position is that when rates are too high, work will be off-shored. People don’t care if it’s Pick work or job placement. (Reference back to recent forum spam from a job-placement company based in India.) People naturally want to pay the lowest amount possible for services. If the professionals of the market don’t want to accept what the consumer will pay then the consumer will look elsewhere.

2) I believe:
a) People responding to Kevin’s posting find the rate low compared to their own so they resort to a fairly accurate "you get what you pay for", and personal defense mechanisms like "my services are worth much more than that";
b) People are concerned that by lowering the bar so low, that the "value" of market services becomes artificially devalued, thus influencing the price that the rest of the market is willing to pay for similar services. In other words, why would my clients voluntarily pay my rates if they think (key word there) they can get equivalent services for 1/3 of the price elsewhere.

Developers in english-speaking countries typically represented in our community forums (like the USA, Canada, UK, Australia) have certain minimums and maximums, beyond which they won’t pay or charge. The comfort zone has been reinforced by isolation – our clients can’t get anyone else at a cheaper price so they pay us what we ask. But everyone "tempers" their rates based on the local economy. It’s a pragmatic compromise.

All industries are like this, and many industries have also shown vulnerability when the market becomes less isolated.
– When the japanese make cars for less, people stop buying GM and local jobs disappear.
– When the chinese can mass produce toys, prices drop around holiday time but people who work in local toy companies need to find new jobs to buy the imports.
– When people in India learn english, and properly manage the business of outsourcing, we see a mass shift of telephone-based services shifting over there.