1. Race to the Bottom - That is another possible take/implication of what is happening with the rise of remote work & the geographic shifts being accelerated by the COVID-19 pandemic ... One we are not hearing enough about ...
2. I've already written about how the 1% is taking advantage of the pandemic & remote work to shift their residence to avoid state & local taxes ... But maybe there is more to it.
3. What also appears to be happening is that elements of the business elite - the capitalist class - in finance, real estate & tech - are shifting their residence & parts of their operations from higher cost, higher tax to lower cost, lower tax locations.
4. A bit part of that is lower wages & labor costs, greater labor flexibility and less regulation. There is a huge literature on this in urban-economic geography ...
5. In fact, the members of the business elite doing this are not even being shy about it. They are telling us they are moving to lower tax, less regulated, more "business friendly" jurisdictions.
6. Tech leaders companies are saying when workers move to remote work in lower costs place, they will get paid less. Their pay gets cut in line with living costs ...
7. Frankly, I am surprised there has not been more conversation about this. The direct implication is lower wages for workers and less revenues for high costs locations.
8. If one was a "marxist," one might even think of this as a capital strike of sorts - aimed at getting high cost, regulated, "progressive" places to "come in line."
9. We've seen this movie before, over and over,. It did not start with Bezos & HQ2, or Musk & the Cybertruck factory or Ellison & Oracle, or real estate & finance types fleeing NYC for Miami.
10. It happened to Pittsburgh, when industrial magnates started to abandon factories & move to the suburbs & the Sunbelt. Pittsburgh was the Silicon Valley of its day & a major center for corporate HQs.
11. It happened to Detroit. Detroit was once one of the most innovative places on the planet. Home to the biggest companies in America. With well-paid unionized workers ... But then those companies moved on & moved out ...
12. it is not "hard" to see what is up and what it portends. Yet where is the outrage ... Blinded perhaps but what some see is expensive, superstar cities getting their come-uppance.
13. But it's not cities. It's workers taking pay cuts, its city budgets getting decimated, its austerity, its massive cuts to services ...
14. There's a well-known phrase for this: A RACE TO THE BOTTOM. And COVID-19 is accelerating it right across the country.
15. This is something the Biden-Harris Administration is going to need to grapple with, sooner rather than later ...
16. It's even worse. This whole race to the bottom dynamic has its most devastating impact on working & service class workers.
17. As this new study shows, remote work jobs - high skill, knowledge & professional jobs - are overwhelmingly concentrated in large expensive cities: fpeckert.me/AEGW.pdf
18. As those jobs move elsewhere, guess - come on guess - where the most devastating impact falls. It's not on the relatively well paid knowledge workers who move to a less expensive city ...
19. The most devastating impact is on the working and service class workers who support those jobs & that knowledge work economy. It's all laid out here: fpeckert.me/AEGW.pdf
20. Now add in the fiscal implications of lost revenue, austerity, budget cuts, and cuts in needed services, and what do you get: A terrifying RACE TO THE BOTTOM ...
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