The $20 per hour rates mainly come form India via sites like
freelancer.com which is full of outsourcing companies.
This is what you have to compete with.
If a client wants to deal with someone native who speaks English
properly, then they will pay your rates, if they just want the
cheapest price possible then they will go to India.
The majority of clients will regret getting it done on the cheap as
they wont have the technical or project management skills and thus
cannot get past the language/communication barrier that exists in this
situations and will end up either not getting what they wanted, or it
will end up taking them 5 times longer and thus not actually save them
any money.
There are plenty of skilled people in India, and the outsourcing
works for some people if they have the project management skills or
have someone that speaks perfect English and Perfect Hindu, but as
with anywhere you have to wade through all the crap developers to find
the good ones, and that can be tough when they are all blagging to
their back teeth that they can do the best job for you  and don't
actually understand half of what your saying to them anyway.

Clients who want a Guru/consultant should expect to pay $120+ ph :-)

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