Corporations are beginning to use remote work as an opportunity to ship skilled-labor jobs overseas.
- Companies are beginning to realize remote work creates opportunities for less expensive labor and workers, with office work no longer necessary for productivity and communication.
- Offshoring skilled-based remote work to countries like India and Mexico could decrease labor costs by 40%, according to Society for Human Resource Management CEO Johnny Taylor Jr.
- 10% to 20% of U.S. service sector, software, and payroll jobs could be shipped overseas within the next decade, Stanford economist Nicolas Bloom tells The Wall Street Journal.
- The Federal Reserve Bank of Atlanta says 7.3% of senior managers are moving remote jobs overseas.
Why It’s News
The pandemic turned the modern economy upside down and forced it to adapt rapidly to change. As a result, remote work has become a popular and desirable feature of white-collar jobs since the outset of the pandemic, with many workers threatening to leave their jobs if they were forced to return to the office. As many as 30% of U.S. jobs are currently remote, according to a study from WFH Research.
While remote work has given U.S. workers the opportunity to push back against their employers for greater flexibility and benefits, offshoring jobs could create a backlash for U.S. workers as they watch their jobs being replaced by equally skilled workers outside of the country.
The transition could prove negative for U.S.-based skilled workers, who have enjoyed surging incomes and greater benefits since the outset of the pandemic and many of whom moved to less expensive cities like Austin, Texas, and Boise, Idaho.
Low-skilled workers are already widely used outside of the U.S., such as call centers located in Bengaluru, India. This change could serve to benefit companies and reduce immigration dependency for a U.S. immigration system already straining under visa backlogs and bureaucracy, bringing high-paying jobs with benefits to poorer regions of the world.
“1980 to 2019 was the rise of manufacturing globalization, which eventually stalled out with the China-U.S. trade war. From 2020 onwards, we will see the era of service sector globalization,” says Professor Bloom.
“There was a time when I would have said, ‘There’s no way you can have these sorts of jobs be done remotely,’ and I do not say that anymore. The pandemic proved the point for us,” Taylor tells The Wall Street Journal.