To toss in a second-hand anecdote: I once asked someone who worked at/with companies screening Africans for diamonds in the rough, smart guys who could do programming but were being paid peanuts, like $10k/year, and paying them a multiple of that for outsourcing, why it wasn't such a great idea, when Africa seems to have so many under-utilized people. He said that despite expectations, they were not much cheaper to hire than alternatives like American programmers on net. While you would think that it would be impossible to not make a profit paying these smart guys $20k or $30k a year when alternatives are like $200k/year, the economics barely worked because they just wouldn't do the work reliably. They would just not show up some days, leave early, do no work, blow off jobs, half-ass the actual work, and so on. By the time you hired enough non-African managers to oversee them and handhold them, you'd blown through your cost advantage, because good managers aren't cheap either. Most customers found it a lot easier to deal with a reliable non-African contractor who would get the job done when they said they would get it done mostly right the first time and would answer emails.

It reminded me of Gregory Clark's 1987 paper "Why Isn't the Whole World Developed? Lessons from the Cotton Mills" https://pdfs.semanticscholar.org/6152/0798b9dd2c691872d58db3... where he points out that despite Indian labor being incredibly cheap, Indian cotton mills were still uncompetitive with British (and later, Japanese) cotton mills for basically the same reasons. As the saying goes, "you get what you pay for"... The more something is an o-ring process https://en.wikipedia.org/wiki/O-ring_theory_of_economic_deve... , the more skimping on labor is penny-wise pound-foolish.