Demise of Remote Work?
Quality, Consequences and the Construction Industrial Complex (part 296).
Remote work via digital nomading is one of my favourite new cultural evolutions. The whole thing is about efficiency of time and costs and should make any free market minded people happy.
The benefits of remote working are:
- Workers save time, money and pollution by avoiding commuting.
- Workers can derive health benefits from less stress and more opportunity for sleep.
- Workers have opportunities for multiple income streams.
- Employers save office overhead and travel costs.
- Employers can draw from a larger geographic pool of potential workers.
- Employers can manage by task not time.
However, it is dawning on companies and governments that remote working has downsides such as:
- Less control over workers.
- Learning costs required to learn how to manage remote work.
- The exportation of capital i.e. a USA firm paying a remote American worker located in Thailand is exporting USD to be spent in Thailand.
- Reduced velocity of money in local economies i.e. a USA firm paying a local American worker keeps that money circulating in the local economy to the benefit of other local businesses.
- Loss of tax revenue to national and local governments i.e. a USA firm paying a remote American worker located in Thailand enables the worker to benefit from the foreign earned income tax exclusion plus not pay state or sales taxes in the USA.
Turns out not everyone really wants a free and open labour market because the benefits move to the able and agile at the cost of the less able and established order. If you are a government, labour union, professional licensing organization or labour driven business, the last thing you want is a free and open labour market.
I had a recent experience that caused me to write this post. I was interviewed for a project management teaching role with a new organization offering alternatives to university. Everything was going well;
- The role was advertised as “full remote”,
- I am qualified for the role and my interviews went well,
- The organization is located in London UK,
- I am British with a UK tax record and national insurance number.
However, I am located in Canada which required an opinion from HR and legal. Long story short, to work full remote you had to be local. Ironic huh? I guess they did not want to be seen off shoring their work force. This did not make sense to me until I thought it through to write this post.
Most digital nomads are braking the law. If they entered as tourists but are really working remote, they are violating the rules of their tourist visa. The digital nomads you see bragging on social media are essentially Instagraming and YouTubing their visa violations. This works until the number of digital nomads and offshoring becomes too big to ignore.
I think the current culture war and unrest in the West is partly driven by the breakdown of traditional labour markets and local economies via technology enabled change. The ability of skilled knowledge workers to move themselves to work opportunities and locations where they are treated best will cause local and national governments to make a choice. Do they compete for human capital or lock it down?
Some countries are competing and offering digital nomad visas. However, I believe unrest and politics in the West will require governments and companies to lock labour and capital down. Unfortunately, I believe we will see a return to the 70″s with capital controls and restrictions on remote work via visa rules, citizenship based taxation plus travel restrictions.
If you are thinking of becoming a digital nomad and have not yet collected, life partners, dogs, or mortgages, I say do it now, before it becomes too difficult. Being a digital nomad may be the last form of actual freedom out there.
Advisor DCM https://learn.drawingspecialists.com/adam
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