U$2 an hour is really bad, even by my country's standard (I live in Uruguay, South America).
A salaried wage for a designer would be about U$5/hour. At my company they're paying a good designer U$ 25 an hour for freelance work, but of course they don't hire as many hours as a fulltime salaried employee would do.
I think the OP was being facetious with the $2 per hour comment. In my experience with 99designs, the winner gets a few hundred dollars. Taking into account the fact that a designer may have to enter quite a few contests before he/she wins, that prize pool gets diluted for sure, but I'm sure the wage works out to a value greater than $2.
A salaried wage for a designer would be about U$5/hour. At my company they're paying a good designer U$ 25 an hour for freelance work, but of course they don't hire as many hours as a fulltime salaried employee would do.