In the PADI system, a Divemaster is qualified to guide certified divers, to teach Scuba Review courses to certified divers, and to do the Confined Water part (not the Open Water part) of a Discover Scuba Diving program (if he/she qualified as a DSD Leader.)
An Instructor is qualified to do everything a Divermaster does, and he/she can teach from Bubblemaker to Divermater, and Specialities if qualified for it.
Most of the time, in foreign countries (at least, tropical countries), the foreign DM will, in fact, be Instructors, and the "real" DM will be locals. However, it is (slowly) changing and there are more and more local Instructors, which is a good thing.
I work in foreign (tropical) countries for the past 6 years, and I noticed the followings:
- There is usually a difference between salaries: locals get paid less (DM or Instructors) than a foreign Instructor. Ususally, the foreign Instructor speaks more usefull languages to the industry, and often, management expects more from the foreign employees than the locals. It's not something I invented or something I feel, it has been said in front of me.
- In any case, a DM will be paid less than an Instructor: the Instructor can do everything the DM does and he can teach.
- I never worked in a place where DM were working for free; I've seen Divermaster trainees doing their training in exchange of work.
- It's not impossible, but usually, it will be very difficult as a foreigh DM to get a job.
There is also the work permit to consider, and often, DM will not be enough: in the Maldives for example, it's not legal to employ foreign DM, or there can be quotas of work permit and then, it makes no sense to employ a foreigner that is "only" DM.
And, in any case, why employ a foreign DM when there are plenty in the country already? And being honest, I don't think many people could survive with the salary of a local DM in some country...
- Depending on the work place set-up, Instructors will too fill tanks, loads boats, sweep floors, fix stuff... They didn't forget all that suddenly when they became Instructors.
I am working now mainly in resorts, so in these types of environment, you usualy have "dive helpers" and "compressor boys". They are usually not divers at all, and do all the hard lifting jobs and fill the tanks. And I have to admit that their work is immensely appreciated.
- It's difficult to make a decent living out of the diving industry: salaries are often low, and conditions can be... difficult.
- You will never get "local prices": with time and efforts, you will get better price than tourists.
On a more general topic, and as it was said in previous posts, the more one can do, the more he/she will be employable: photo, video, languages (some of my colleagues can teach in 5), mecanic, equipment maintenance, computer skills, marketing, boat licence (this one is not necesseraly useful everywhere though... In the Maldives for example, only a Maldivian licenced captain can drive the boat), being able to teach speciallities... Anything related to diving and/or running a business.
To get the "good" jobs, as in any field I believe, one need the experience and the reputation (and/or the references.) Or he/she can climb the ladder. No matter the age, no matter how many certifications, when someone comes in a new field, he/she is the "newbie", the same goes with the diving industry.
As said Jim Lapenta, in order to teach photography, a diver doesn't need to be an Instructor of any sort; "just" a damn good underwater photographer and a very good diver too. He/she, to my knowledge, will not be able to deliver a certification recognised by any diving agency, but that's not very important.
However, on a liability release suject, I guess it's another story, but I can be wrong... I'm assuming that as good as a diver can be in a fiels such as wreck, technical diving or any "speciality", no insurance will cover anything in case of problem if the "teacher" is not a certified Instructor from the speciality he/she is teaching (in active teaching status.)