Why This New Class System Explains What Governments Are Selling You

If you could live anywhere in the world, where would you choose to live and why? 

That’s a question millions of new remote workers are asking themselves. 

They’re eager to take advantage of the fact that work be done from anywhere, with teams dispersed all around the world, using asynchronous tools to collaborate across time zones. This isn’t much of a revelation. But what most people aren’t yet focusing on is how these trends are influencing and reshaping society.

You should be.

Because as more people relocate for a variety of reasons, they increasingly influence how governments make policy decisions.

Remote workers care about tax regimes, crime rates, quality of schooling, access to activities, communities, cultures, proximity to family, and an infinite number of reasons for where they choose to live and why.

And more importantly, as society transitions to remote work, it invalidates one of the foundational assumptions of the late industrial age. It’s an assumption used to design government policy and communities.

The assumption? That work must be done in person.

Think about it, when you look at how we’ve structured modern life down to the economics of our cities and communities, you start to see that life is designed around the idea that work is meant to be done in person. With the introduction of remote work on a large scale, major cracks are now appearing in the foundation of how communities form and retain their structure.  All because people no longer have to work in person.

What these cracks show is that a new social class divide is forming that is consequential to how society will evolve moving forward. Society’s class divide is shifting from blue collar vs white collar work to location-dependent vs location independent work.

Policies that were once created along blue-collar vs white-collar social divides are starting to fail and our political discourse is transitioning to a fight between location-dependent and location-independent workers.

The larger consequence is that governments will be forced to adapt. And in the process, it will appear as though pioneers of new class policies are radicalizing government institutions.

Here’s what that really means and how we get there.

The Reasons Remote Workers Are Relocating

There are a few major consequences of this new class divide that will have profound impacts on governments, policy choices, and the formation of the communities that we live in.

One of the major causes of these changes are driven by the technology enabled exit. Simply put, people are using digital technology to relocate where they live and in order to improve their lives.

The reasons why people are relocating are essential to understanding how and why policy choices will change moving forward.

Here’s some of the real examples of why people are moving:

Political Reasons

If you can live anywhere, you’re likely to want to relocate to a community with policies that align with your political values. That means communities are diverging away from a mainstream consensus to polarized political communities.

The ‘Big Sort,’ again: Americans are moving for political alignment : NPR

America is growing more geographically polarized — red ZIP codes are getting redder and blue ZIP codes are becoming bluer. People appear to be sorting.”

“The trend seems to be quickening as conservatives flee places with strict COVID-19 rules.”

In other words, people are relocating to live in communities that are more ideologically aligned with their personal beliefs.

Redfin Predicts a More Balanced Housing Market in 2022 – Redfin Real Estate News

Now that workers have more control over where they live, more people will seek out areas where there are like minded people with laws that fit their political beliefs. People who prefer to live in areas without mask and vaccine mandates will leave cities like New York and Los Angeles. People who are against voter-ID laws will move to places where voting is more accessible. People who are pro-choice will avoid states with restrictive abortion laws. We will also see more blue enclaves grow within red areas and vice versa, as parents select school districts that align with their preferences regarding mask mandates, critical race theory and other controversial issues. “

Tax Reasons

Remote workers are able to select locations with more preferential tax regimes. Lower income tax, lower capital gains tax, or lower property tax are a few of the motivating factors that are dependent on how these people structure their finances.

The post-pandemic data shows clear signs that people are using remote work to relocate away from high tax jurisdictions.

The Great Pandemic Wealth Migration – WSJ (archive.ph)

Cost Of Living Arbitrage

A major reason remote workers relocate is to create a positive wealth effect by moving to a lower cost of living location while maintaining a higher out of market salary.

Home Values Are Growing the Most in Suburbs, but Demand May Be Shifting Back Toward City Centers – Zillow Research

“Many buyers are prioritizing affordability and space over proximity to the workplace, with remote work now an option for more households.”

HR Magazine – Cost of living could see remote workers stay on the move

“As the cost of living becomes a greater concern, we’ll see people explore new opportunities to mitigate these costs. We’ll certainly see more people adopt this anywhere worker lifestyle in the future as many external barriers are alleviated.”

For Access To Better Childhood Education

School education has struggled to keep pace with the demands of the digital age. That’s become especially true in the wake of Covid. As a result, many students have simply exited the system as parents search out alternative opportunities.

The search for better school systems is a major catalyst for remote worker relocation.

With Plunging Enrollment, a ‘Seismic Hit’ to Public Schools – The New York Times (archive.ph)

“All together, America’s public schools have lost at least 1.2 million students since 2020, according to a recently published national survey.

“And since school funding is tied to enrollment, cities that have lost many students — including Denver, Albuquerque and Oakland — are now considering combining classrooms, laying off teachers or shutting down entire schools.” 

In some states where schools eschewed remote instruction — Florida, for instance — enrollment has not only rebounded, but remains robust.

Government Policy That Creates Welcoming Environments

Remote workers are choosing to relocate their livelihoods to places where the government and elected officials are supportive of their social class. As opposed to the extractive and hostile nature of some governments.

The Start Of Startup Cities • 1729

“In the remote economy, in the cryptoeconomy, in the Starlink economy, in the post-COVID economy, real estate is being repriced worldwide. Dense cities are less valuable and time zone colocation is more valuable. Asia is rising and traditional capitals are falling. It’s not just about Miami or Austin anymore, but about Estonia, Singapore, Taiwan, Israel, Dubai, and New Zealand — and about Culdesac, Starbase, and Prospera.”

The Bottom Line: People Are Relocating And It’s Changing Community Structure

There are a growing number of reasons that people are deciding to pick up and relocate. But they are all grounded in the ability to work remotely. As more companies adopt permanent remote work policies, the more the workforce will reevaluate their living situations.

This macro level trend has consequences to how society forms and the policies that are implemented to both attract and repel certain demographics of people.

A Shift From Local Competition To Global Competition

As society integrates remote work, it shifts and expands competition from local jurisdictions to a global scale.

For example, you’re no longer competing with the 30,000 people in your local community for a job. Instead, we now compete with the 8 billion people on the planet. This is also now true for governments.

And as a direct consequence of this reality, elected officials must now consider the following question when crafting policy: If you could live anywhere in the world, where would you live and why?

They must understand the rationales behind why remote work is changing their local electorates (listed above). And then they must take action to create an environment that becomes the answer to where people choose to live by adopting policies that cater to their “why”.

To begin with, policymakers are going to need to understand and acknowledge that we’re living through a transition to a new social class divide. That means they are no longer competing with local opposition party candidates but all elected officials and jurisdictions worldwide. 

For example, the city of San Francisco is competing with policies in Miami, Austin, and New York. But it’s also competing with Singapore, London, Lisbon, and Warsaw and many other places.

The problems that people had to swallow before remote work, the internet, and global travel were due to a lack of options. We lived in a mass formation society. You didn’t have the means to pick up and relocate as easily as you do today.

But now we do and as a result, politicians and governments must choose to adapt or slowly decay into irrelevance.

The Deeper Consequence: The New Class Divide Forces Governments To Adapt Or Die

But what about the location-dependent workers?

Just because the trend is shifting policy to benefit remote work doesn’t mean that location dependent workers aren’t an important part of society. On the contrary, the era of Covid and war in Ukraine have solidified that reality as nations scramble to revamp manufacturing and diversify supply chains.

Many policies can and will be crafted in support of location dependent labor forces at the expense of remote work. That’s just part of this new social class battle ground. See Elon Musk’s recent policy choice re: remote work.

Elon’s policy is likely less about his opinions on remote work in society and more about the reality that his companies are heavily dependent on manufacturing processes that require in person labor. Elon will not be alone in his push for “back to work” models.

There is mounting evidence that politicians are crafting policies designed to benefit the location-dependent vs the remote work class as is evident from a small city in Maine.

The YIMBYest City in America  – Discourse (discoursemagazine.com)

The city, with its roots in the blue-collar industries of the region, isn’t setting out to attract the creative class knowledge workers that are the desiderata of many other cities. Levesque wants to make Auburn “a blue-collar utopia,” not a Manhattan in miniature.”

But the critical point to focus on is that the gulf between the needs of remote workers and the needs of location-dependent workers will continue to grow wider.

It’s forcing policy adjustments because the social divide has forced an evolution in society.

And one of the deeper consequences of global and digitized competition is that from a government policy perspective, governments must adapt or face certain stagnation. 

Here’s why.

Tribalism Thrives In This New Class System

Tribalism will become the new policy norm. Governments will now be forced to adapt their policy choices from mass formation society (there are only few lifestyle options for everyone) to picking policy to serve a lifestyle subset of this new class divide.

From serving communities that have few lifestyle options to communities that now have many.

Ie: it’s incredibly difficult to build policy that benefits both the location-dependent and location-independent at the same time.

Policymakers and communities will have to decide whether they cater to location-independent, location-dependent, or try to find some hybrid middle ground.

But the lessons of the internet show that as you try to take a centrist approach, you end up leaving everyone unhappy. This is a key change to a world where more and more people can now choose to relocate to places that make them happy.

Simply put, bad policy choices will drive people away when governments compete on a global scale because there will always be communities that “pick a side” and adjust policies to benefit one group over another. And it’s never been easier for individuals to relocate.

Keep in mind, governments don’t have local monopolies anymore. Now they have global market competition. 

That simple fact will force governments to minimize their disfunction, lower costs, provide better services, and cater to the new needs of a changing society.

What Comes Next

Here’s what we’ll likely see in the near future as a result of this new class divide: 

On a national and international level, we’ll see more reliance on federated systems. Ie: autonomous communities with shared common standards at a high level.

Federated systems built upon a foundation of high arching concepts that keep society integrated. The “big concepts” are more likely to be economic, trade, and human rights-oriented ties than national identity or other affiliations. Ie: there are still benefits to the Euro Zone, NATO’s mutual defense pact, and multilateral trade agreements that can keep increasingly different communities tied together.

The value found within these relationships will be enough to force common ground between nations and ideologies that are evolving differently under this emergent class system.

But within each nation, we’ll see fragmentation. An unbundling of government systems of the late industrial age in favor of digital vs local tribalism.

That means we can expect more experimentation.

More elected officials willing to take a stand for their town or city. A willingness to adopt policies that benefit location-dependent vs location-independent. And vice versa. But the broader point is that we can expect real policy change to take place that falls outside the “usual” approach.

Gradually, then suddenly, it will sweep over the world. Governments will start selling you something different. You’ll need to start asking yourself where you want to live, why, and then find a community that services those needs.

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