I have listed myself on several sites that offer RFPs for writers, etc. One thing I've noticed is that there are an inordinate number of proposals from people offering their services at ridiculously low prices - I saw one offering
$3 per hour. That was the lowest, but many of the offers were for quite a bit less than I need to get in order to keep going.

I'm sure these folks are just "pin-money VAs" - wanting to stay under the IRS radar, or to make a little extra but not enough to affect their SSI or whatever. It's also possible that these people are offshore. But still, how is one to compete against such?

In desperate times, I myself have tried to avail myself of "VAs" in india for low rates - often $8 - $10 per hour via Elance, Odesk - but each and every time, the results were horrific. I tried to offer one a project of researching 4 blog posts for me - I gave her clear instructions, asked her to do some research and write the posts at 300 words each. She billed me 4 hours but what I got back was ripped verbatim off of a highly visible site in my industry. I could have done what she did in about 10 minutes. Ugh.

So, despite Tim Ferriss' book, The 4-Hour Work Week - folks will discover that "you get what you pay for" in the long run. As long as you build and maintain a reputation for excellence, you will succeed.