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Are Migrating Remote Workers Driving the Market?

Published: 08-11-23 Category: Insight

MyEListings' markets and economics editor and creates content about global macro events and their impact on US commercial real estate.

Remote work has revolutionized the dynamics of the traditional workforce. With technology erasing boundaries and the concept of a physical office becoming obsolete for many, more individuals are leveraging the flexibility and economic incentives of remote work to redesign their lives in more profound ways.

Remote Work Revolution

As of September 2022, 27% of the workforce had transitioned to remote work. Predictions hint at this number surging as high as 36% by 2025.

This isn't just about telecommuting from home but involves significant changes in how people approach their quality of life and work.

A Surge in Entrepreneurship

Remote work provides more time, cutting out daily commutes and rigid office hours. This newfound freedom allows many to pursue both economic incentives and passions, start businesses, and break the chain of traditional employment.

Geographic Mobility

Being tethered to a particular location is no longer necessary. A significant share of these migratory remote workers chose to move to another state during the pandemic, seeking environments that cater to their lifestyle and financial needs.

Florida and Texas, which lack state income tax, have become top destinations.

Quality of Life Choices

Ronald Coase, in "The Nature of the Firm", detailed why most people choose structured employment: To reduce transaction costs which include bargaining, opportunity, search, and policing costs. These costs made self-employment, or freelancing, seem daunting.

With technological advancements, many transaction costs have decreased substantially, making the modern era ideal for starting a business from an entry-barrier perspective, as well as for improving quality of life choices.

Freedom to Choose

As a result, individuals are now choosing where they live based more on quality of life rather than job location. This means they're also in a position to select their tax jurisdictions, forcing states to be more competitive in attracting them.

Incentives Offered Relocating Remote Workers in Some Locations

To capitalize on the remote work trend, states and cities have rolled out a range of incentives to lure remote workers and improve their quality of life.

#1 – Cash Payments

Regions like West Virginia are offering economic incentives, with figures as attractive as $12,000, provided the remote worker stays for a stipulated period, such as two years.

#2 – Housing Assistance

Cities like Tulsa, Oklahoma facilitate migration by providing housing-related financial benefits. The city offers a substantial $10,000 to those remote workers who decide to buy a house there.

#3 – Tax Breaks

The allure of no state income tax, as seen in Florida, presents a significant saving for remote workers, providing an additional financial impetus to make the move. This is reflected in Florida's garnering over $12 billion in net income migration in 2021, the latest year reported.

#4 – Coworking Spaces

Understanding the need for professional environments, towns like Natchez, Mississippi, are providing free coworking spaces and other economic incentives to remote workers settling in their jurisdiction.

#5 – Exclusive Discounts

Some regions are going the extra mile, offering discounts on essentials. Take Bemidji, Minnesota, for instance, which grants remote workers a 10% markdown on groceries, among other economic incentives.

The Quality of Life Shift is Only Beginning

The remote work revolution is more than just a shift in working style. It's a movement that has set off a cascade of choices, prompting individuals to seek a better quality of life and prompting states to step up their game in offering enticing economic incentives.

They need to learn from the past, however: these are impermanent fixtures and can leave at will, therefore they should facilitate, not oppose, their wants and needs. The long-term societal and economic ramifications of this shift remain to be fully seen, but they promise to be transformative.

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