White collar workers have long enjoyed being able to operate from their homebase, while the offshoring of blue-collar workers allowed them to enjoy the perks of globalization.
However, economists are now predicting that the mass shift to remote work could change all of that.
According to Richard Baldwin, an economist at the Graduate Institute in Geneva, jobs that can be performed remotely could be at risk as someone with the same skills in other countries may do the same level of work — for much less pay.
Remote work has reshaped much of how the global economy operates, with companies more likely to outsource their labor to cut costs amid the workforce shortage.
Not only is the demand for contractors more relevant than ever, the total number of professionals pivoting to independent work has skyrocketed since the onset of the pandemic, mainly due to the desire for more flexibility in their daily schedules.
This is good news for the world’s largest corporations. In fact, research shows that U.S. companies have started relying more on contractors, with the number of contractor payments jumping 56% from 2019 to early 2022 according to payroll firm Gusto.
“The pandemic became a very volatile time, and lots of businesses needed to pivot on very quick timelines,” said Liz Wilke, principal economist at Gusto. “And they also needed skills and capabilities that they didn’t have before or could not get in the talent market. And that is the primary advantage of contractors.”