I feel like the adage, "you get what you pay for" applies to everything in life.
There's a reason why there's price differential even within the same geography - some people are just more skilled than others. If the justification is that good talent is charging $1.11/hr because it's a lot of money in that geography, assuming the quality is on par, don't you think they'd raise their prices to match other good talent elsewhere?
Well, no. First of all, even overseas the great talent raises their prices comparably. You will still get a price discount, if your freelancer is based in Madagascar, but her rate will also be on the higher side, comparable to the price of living in both countries.
What I am pointing out is that cheap outsourcing sites are not the right place to look for exceptional talent because when 100 people charge $1, then you as a client get too attracted by the low price and you would naturally forgo a freelancer to asked for a lot more. This is not your fault, just human nature, and not the freelancers' fault, they just want money.
It's the oDesk's and eLance's fault for screwing you over by having a marketplace where the prices are dirt cheap.
I remember chatting with him back when we were both in junior high and he was talking about applying to incubators and doing startups - it's great to see what he's doing now!
There's a reason why there's price differential even within the same geography - some people are just more skilled than others. If the justification is that good talent is charging $1.11/hr because it's a lot of money in that geography, assuming the quality is on par, don't you think they'd raise their prices to match other good talent elsewhere?