I can really sympathise with this graphic designer - the media industry is full of people asking freelancers for things as cheap as possible.
Promising things like 'do this one cheap and there will be lots of future work' - which either doesn't materialise or is also at the same price.
I think it may also be linked to the recession - lots of people getting connections to do things for free as a favour because we don't have any money at the moment. I know of a SEO, who eventually had to refuse providing advice to anyone as he was over run with favours to people.

The growth of websites like elance.com also means a freelancer in London has to compete with - for example someone in a remote country, working from home, paying no tax. The cost of living in London means - that its basically impossible to sustain yourself on small projects. Each project has a unpaid lead time - in which you are collecting requirements and providing a estimate. Often small projects come with unpaid post project support. Getting requirements out of non-technical clients is a scary process where you discover whey didn't really know what they needed. Often you may find yourself helping them with their requirements, only to discover you are just telling them to use a specific tool or webservice. Thats all cool - but living in London you can burn through cash making you feel like you are in 'free fall'