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What a Virtualized Workforce Means for the American Economy, Part I


Virtualized Workforce

I’ve already written about what the “New Worker” looks like in a world where job opportunities and careers literally face no boundaries but now I want to focus on what that means to the still-fragile American economy.

No Boundaries

There’s no doubt many people want to work from home, and not just parents or those charged with caring for elderly parents. Rising gas prices and commute times, the desire for a “work/life balance,” the ability to access and exchange massive amounts of information from remote databases over the Internet, and the cheap availability of consumer electronics with enterprise-level capabilities, have all contributed to the growing trend of both workers and freelancers based at home either full- or part-time.

In that kind of world, one driven by information technology, workers with experience and skills in professional services will have a great advantage. Whereas, during the Industrial Age, the United States relied on manufacturing and transportation to drive the economy and make it the most prosperous nation on earth, now its strengths lie in the information-rich industries of finance, IT, engineering, energy, and healthcare.

Many jobs in these industries still require that workers be located in specific sites (e.g., nurses in hospitals, construction project managers on job sites), but a growing number of jobs can now be done from anywhere with reliable Internet access. An electrical engineer in Dallas or even Dublin, Ireland, can remotely monitor a wind farm in Minot, North Dakota, without ever setting foot in the Roughrider State, thanks to a sophisticated SCADA system on her laptop that tracks wind data, energy output, and other data critical to the smooth operation and functioning of the turbines.

Other industries that have seen jobs “outsourced” to the home or other remote locations here in the United States include the legal field, accounting, and yes, contact center operations. Anyone with high-speed Internet access and a decent computer can now do everything from working as a virtual assistant for an executive anywhere in the world, to launching and running a successful business, all without ever leaving home.

The Economic Effects of a Nation of Virtual Workers: Not So Good

As more American workers head home and actually stay there, the economic effects will be tremendous. Some of the effects will be positive, but others may mean that hard questions must be answered regarding the nature of work in our society and what it means to be a “contributing member” of it.

  • Many white-collar jobs have been able to make the transition to remote positions relatively easily, but many jobs, including those in traditionally unionized industries such as manufacturing, are far more likely to move offshore and never come back. That leaves a large swath of American workers – many of them older, with limited skills in modern technology and IT – with few opportunities to maintain a comfortable standard of living and who may have difficulty retiring.
  • As more companies shed permanent staff and outsource their jobs to independent contractors, the issue of employer-based benefit programs will likely become even more critical, especially as healthcare costs continue rising.
  • Some lower-level white collar jobs that were once held by very well-paid and well-educated professionals are even now being moved offshore to countries where equally well-educated workers, who have been trained in American processes and policies (e.g., document review, a task traditionally relegated to new, partner-track attorneys at private law firms), can do the job at a fraction of the cost. Although this phenomenon isn’t yet widespread, the fact that it exists at all raises the question of the future of the legal profession and the expensive education it requires of its practitioners.

Of course, not all the effects will be negative, and for many companies as well as workers alike, the rise of the virtual workforce brings with it a number of welcome benefits. In my next blog post, I’ll explore the benefits of this brave and boundless new world.

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