There are guys who would work for a lot less than you would, because the USD is worth a lot in some countries.
With that being said - you always get what you pay for. If you pay as little as $5 for a 1000-word article, you can't expect it to be any good. Maybe good enough for a web 2.0 post, but even that's a stretch and you'd need to get really lucky to find a decent writer who'd want to work for peanuts.
Same goes for everything else. If someone is selling 10 backlinks for 10 dollars, then they're probably shit backlinks etc.
There's a market for everyone, I suppose. But, what I'm saying is - if you're good enough at what you do, competitors who are charging chump change for their services aren't really your competition anyway. If your client expects to get a SEO audit or a 1000-word article for $5 then they're an idiot, which is not your concern.
Maybe you should change your approach or advertise your services to a different, more serious, demographic.