Remote work: Who wins and who loses when companies can hire from anywhere?

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The intensification of inequality in the jobs market seems unavoidable, research suggests.

Some employees and freelancers who can work remotely will have vastly expanded opportunities and the possibility of significant increases in pay, but remote workers in general figure to face more competition and have a higher dependence on luck.In his 1981 paper, The Economics of Superstars, Sherwin Rosen described the impact of recording and broadcasting on the incomes of athletes and entertainers.

Similar dynamics can be seen in professions that were assumed to be inherently “in-person". During the lockdowns, most fitness instructors were out of work. But a handful were thriving — especially those who worked for Peloton. By the end of 2020, Peloton had about 4 million members — equal to the number of gym patrons in New York state. Unlike New York’s fitness industry, Peloton did not employ 86,000 people in a single state.

The two economists attributed these changes to “the revolution in information processing and transmission", which provides “increasing leverage for the talents of those who occupy top positions and correspondingly less room for others".This trend continued into the 21st century.

For most tech workers, remote work means competing in a much larger pool of equally qualified candidates, many of whom are based in lower-income cities and countries.

 

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