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What Locations Win From Remote Work?

What Locations Win From Remote Work?

The changing "geographies of success" in the era of remote work.

Klein's Journal Mexico City
Photography by Jezael Melgoza

From my first posts about the remote worker controversy in Mexico City, I’ve argued that this phenomenon is much larger than just a few neighborhoods – or even the largest city in North America. The pandemic has completely transformed work, travel, and migration — and remote work is reshaping entire cities and societies worldwide.

Until now, I’ve been focused on North America. My intention moving forward is to expand my coverage of this topic around the world. I want to begin by looking at what makes a remote worker destination popular by borrowing a phrase from our January book club pickThe End of the World is Just the Beginning by geopolitical strategist Peter Zeihan – the “geographies of success.”

Geographies of Success

In the introduction to his book, Zeihan argues that throughout human history, we see different civilizations dominating certain eras for vastly different reasons. Zeihan describes these winning factors as “geographies of success,” or how the physical features of certain places made them successful during certain technological periods.

For hunter-gatherers, the best locations had a variety of plants and animals densely concentrated in areas of great climactic variety, such as the savannas of Ethiopia.

Settled agriculture shifted the geography of success to low-latitude, low altitude temperate zones with a lack of seasonality (so food could be grown year-round), constant water flows for irrigation, and large desert buffer to deter marauding invaders. These factors made the Indus Valley and Mesopotamia the most prosperous and advanced areas in the world – until technology shifted and made other geographical factors more important for success.

Ever since, we’ve seen how technological shifts have changed the geographies of success for the era – lifting some places into prosperity, while others fall into oblivion.

The explosion of remote work represents an undeniable shift in technology. And the sudden appearance of remote workers in places as varied as Mexico City, Bali, and Lisbon is evidence that a new set of factors are ushering in new “geographies of success” while US metropolitan areas are emptying out as an estimated 1,000,000 (largely young and white) residents have left the top 20 American cities since the pandemic.

And while I believe that the concerns around remote-worker gentrification is valid and important, I also think that the outcry can obscure the larger picture – the cities flooded by remote workers are also the cities best poised to win this next chapter of history. That is, if they play their cards right.

But first, let’s look at what constitutes the current geography of success.

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The New Geographies of Success

The first rule of geopolitics is location matters, and which locations matter more changes with the technology of the day. And one of the best places to compare how locations stack up in the age of remote work is NomadList.com.

Founded in 2014, NomadList has grown into something like the Moody’s Investor Service of digital nomad hubs. It collects over 1,000,000 data points from 2,000 cities — from crime to air quality, susceptibility to climate change to presence of racism — and ranks them in an ever-changing list, allowing users to quickly compare the four most important factors: Cost, Internet, Fun, and Safety (in that order).

As I’ve argued, I believe the largest single factor pushing remote workers out of their home countries is the cost of living and housing crisis. Put simply, American cities are too expensive for most younger workers to buy a house, let alone get ahead. And new data point to this becoming even worse since the pandemic exodus, with rents rising in US cities as they become the playgrounds of the rich and childless.

Since the Industrial Age, cities have been central to advanced economies because of their access to capital, labor, raw materials and distribution (i.e. Detroit or Chicago). But as America and Europe de-industrialized and technology firms replaced manufacturing, we saw forgotten factories repurposed into startup hubs in places like London, New York, and San Francisco.

For a while, these areas attracted top talent through high-paying salaries that allowed them to live in increasingly expensive cities. But as economic inequality has reached record highs, these cities became unaffordable for even well-paid workers.

Enter the pandemic.

Remote workers are suddenly no longer tethered to their company’s headquarters. As long as these workers still claim residence in these states (and hide their travels from their boss) they can still earn their usual salaries in strong currencies while traveling to places with weaker currencies and cheaper costs of living. And because of what I call the “Tim Ferrissization” of the entire millennial generation, everyone feels the pressure to optimize their lifestyle – often by employing geographical arbitrage.

In theory, this means remote workers can work from anywhere. But they don’t. India is cheap, but there’s no remote worker boom in Mumbai. Other factors are at play.

Let’s discuss the “geographies of success” of remote worker hubs.

First, they must have a stable, fast internet connection. Workers must be able to take Zoom calls – even if they mask their real background. This is why remote workers abandoned Tulum and Sayulita for CDMX in 2022. Unstable internet is anathema to remote work.

Secondly, quality of live must improve as cost of living drops. Moving to Austin on a San Francisco salary makes it possible to afford a house. Moving to Buenos Aires makes you rich. For many, this difference means the chance to pay off student loans, save money for a down payment, or perhaps start to focus on art or personal projects.

Visas must be easy to get — or circumvent. Mexico’s 6-month visa-free policy and lack of COVID restrictions is the main reason for its popularity. And with countries like Spain announcing nomad visas, more people have a legal route to the lifestyle. Countries that place too many restrictions on nomads will see them leave.

Destinations must be culturally interesting. Tulsa, Oklahoma is cheaper than New York and will even pay you money to move there. But there’s a reason people would rather go to Mexico City or Lisbon for free. These are exciting, inspiring cities with world-class cultural offerings. Food is a major draw, as millennials have been splurging on restaurants ever since we realized how far away home ownership really was. Many chose to spend their newfound savings on new and novel food experiences.

Good weather, clean air, political stability and low crime all play a part, as does a lack of racism, homophobia and misogyny. Different people give these factors different weight, but a few more practical considerations remain.

Hubs must have time zone compatibility with their employers. Some bosses might not care if a few employees do their work overnight, but most expect workers to be available from 9-5 local time. This creates invisible remote worker corridors above and below specific latitudes – Latin America for the US and Canada, the Mediterranean for Europe, and places like Bali for Australasia. This creates a regionalization of hubs gravitating around the major economic centers of their home countries. And here I will make the distinction between remote workers and digital nomads.

Digital nomads existed before remote workers, and are usually self-employed or freelancers who can work from anywhere – and have been doing so since the internet made it possible. Asia was the first true birthplace of this community, as the quality of life in places like Thailand allowed web-designers and freelance programmers to work any hours they wanted. Bangkok remains the #1 destination on NomadList for this reason. It’s popular with nomads.

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But remote workers are a product of the pandemic. Before then, most were full-time employees of companies. Remote workers are by definition still working for companies with a physical headquarters. While many have applied for legal residency, many more are legally domiciled in the US so they can continue to earn US salaries.

Therefore, successful hubs must be close enough to fly home at a moment’s notice. This is what makes Mexico City stand out above cheaper (but father) destinations like Medellin and Buenos Aires. If your boss surprises you with an in person meeting next week, you can be back in time. This makes the latitude important as well. Buenos Aires and Medellin might be cheaper than Mexico City, but they are much father away.

These factors have combined in new and unexpected ways, often taking locals by surprise from Mexico City to the Turkish Coast. And in what is also one of the most thorny aspects of nomad issues, it illustrates the asymmetrical privilege of remote workers compared to locals, who are often displaced in order to make room for the countless thousands ready to pay top dollar for their homes.

This is also why places like CDMX are experiencing so much gentrification: the risk of being called back to the office keeps these workers in short term housing such as AirBNB, which a recent report suggests is twice as profitable for landlords as traditional rental properties. Landlords everywhere (including my own building) have been trying to replace local tenants with more profitable nomad housing.

Which brings me to the last factor – property prices within grasp of the average millennial remote worker. While the early years of the Roaming 20s have drawn nomads to places with cheap AirBNBs, eventually, people will start looking for a place to settle down. Countries with affordable property markets, family-friendly amenities, and climate-change-resilient locations will rise in popularity. And when they do, smart locals and enterprising nomads will be ready with developments for purchase.

Therefore, I suspect that the ratings on Nomad List don’t exactly reflect the popularity of remote work destinations. They rank the livability of a location rather than the total number of nomads who have relocated there – not to mention the countless semi-nomadic workers who sneak away for a few weeks without their boss ever knowing.

Currently Mexico City is #3 on the list, behind Bangkok and Buenos Aires. I don’t have the true data on total number of nomads in each location – no government really does – but my perception is that Mexico’s proximity to the United States gives it a more favorable “geography of success” than Argentina or Thailand.

Klein's JournalThe Shifting Sands of Success

Those of us lucky enough to chose where we want to live might be wondering where the best long-term location will be. It’s hard to tell. The factors of success might change in unforeseen ways or local government regulation might clamp down on the visa-free-free-for-all, as is already happening.

Portugal has ended its Golden Visa program, a victim of its own success – most recently with Americans. Bali has created a task force to handle behaved, scantily-clad tourists in Bali who have reportedly formed their own fenced-off enclaves out of reach of authorities. The mayor of Mexico City has yet to unveil her plan for dealing with the crisis – although it apparently entails teaming up with AirBNB itself.

For those of you looking to settle down, there are two trends also mentioned in The End of the World is Just the Beginning — depopulation and de-globalization. And in both respects, the future prospects of Lisbon, Buenos Aires, Bali, and Bangkok all look a lot less appealing than all but one nomad hub – Mexico.

There are a lot of reasons to believe Mexico will benefit more than most countries from the coming changes.

I believe remote workers are just the first wave of cross-border migration, investment, and trade that will bring Mexico and the US closer together than ever before — and transform North America into an economic powerhouse to rival East Asia.

This article was originally published in The Missive and was republished with permission from the author. 

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