From today’s Washington Post:
When offshoring methodically disemboweled the Rust Belt, white-collar Americans thrived, free to enjoy the spoils of globalization safe in the knowledge that their jobs could not be outsourced easily to cheap foreign rivals. Now, some economists say the remote-work revolution may have changed that almost overnight.
“If you can do your job from home, be scared. Be very scared,” Richard Baldwin, an economist at the Graduate Institute in Geneva, said in a recent video. “Because somebody in India … or wherever is willing to do it for much less.”
By greatly accelerating the adoption of remote work, the coronavirus pandemic has created a feedback loop that could be the most disruptive force to hit the job market since the blue-collar apocalypse in the 2000s, known among economists as the China shock.
The rise of China as the world’s factory lifted hundreds of millions of people out of poverty worldwide and deluged consumers with cheap goods. But it also devastated local manufacturing economies in such places as Hickory, N.C., Tupelo, Miss., and Springfield, Mo., and sparked a backlash that ultimately would help carry Donald Trump to the Oval Office.
There’s no telling whether the remote revolution will cause similar social upheaval. Many economists are optimistic that American workers will land on their feet amid a gradual transition from a world in which they compete with a few dozen locals for each new job to one in which they compete with a few million professionals worldwide. But economists were optimistic about Y2K-era globalization as well, and it seems wise to keep a wary eye on the possible downside.
Read the complete story here.