Ontarians on the Move #7 — Telecommuting Could Help Ontario Workers and Communities… It Could Also Destroy Them.

  • There’s always been “somewhere” jobs — the kinds of jobs that need to be performed in a specific location. That’s not new.
  • But this is new: The types of “somewhere” industries that have been growing for the last couple of decades — finance, tech, etc. require a large pool of talented workers. So they tend to be located in large cities of a million-plus people. (Think places with NHL teams). So workers in those industries have to live in those cities.
  • That effect is amplified by the fact that typically it isn’t people but rather families that make location decisions. Doors have been opening for women (albeit far too slowly) in “somewhere” occupations.
  • As long as one member of a couple has a “somewhere” job, they end up living in a big city. Across Canada, the United States and parts of Europe, this has caused a migration of talent to large cities, at the expense of mid-sized and smaller communities (so long as they aren’t next door to a big city).
  • A telecommuting boom could change all that, turning “somewhere” jobs into jobs that could be done anywhere. This could cause families to move out of big cities and to smaller communities, in search of more affordable real estate.

Potential Future #1: Telecommuting never really catches on.

This is an obvious potential future. We’re undergoing a massive worldwide experiment in telecommuting right now. But it’s an uncontrolled one, with a bunch of other changes occurring at the same time. Productivity levels for companies are almost certainly down, but how much of that is due to the loss of childcare? 50%? 100%? 150%? I don’t see how we’ll disentangle the impact of each.

Potential Future #2: Telecommuting does catch on, but it turns out to be a bad idea for firms.

It’s been a while since I took a general management class, but there’s two things I remember well:

  1. Most new ways of doing things end up being failures.

Potential Future #3: The nightmare scenario. Anywhere actually means anywhere.

Working from home seems nice, but a bit boring. If I can work from home, why I can’t I work from a café in Paris or a beach in Thailand?

  • Reduced bargaining power for blue-collar labour in developed countries, which has reduced the clout of private-sector unions and put downward pressure on wages. In the United States, real wages for men have been unchanged since 1970, and for lower education levels, has fallen.
  • Increased profits and power for corporations, as they have the ability to location-shop and play governments off of one another.
  • Increased inequality in most developed countries.
  • Decreased global inequality, as wages in less developed countries rise. Some countries have been able to use this process to become developed countries. South Korea is a prime example.
  • Downward pressure on the price of manufacturing goods. Televisions are a whole lot cheaper than they were in 1970.

Potential Future #4: The optimistic scenario. Anywhere doesn’t actually mean anywhere.

The basic argument goes like this: That “pure-play” telecommuting models are unlikely, but rather hybrid approaches where people work from home (or from local WeWork-type setups), but people would still need to go in the office from time to time for meetings and to work on specific projects. The at-location visits could be once a month, once a week, or once every other day. But they occur often enough to make offshoring those jobs a non-starter.

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Mike Moffatt

Mike Moffatt

Senior Director, Smart Prosperity. Assistant Prof, Ivey Business School. Exhausted but happy Dad of 2 wonderful kids with autism. I used to do other stuff.