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Two years ago this month, Mayor Caldwell announced stay-at-home orders for Oahu and Governor Ige mandated a 14-day quarantine for travelers to Hawaii. Since then, our state has grappled with the coronavirus pandemic, which now seems to be tapering off.

Throughout the pandemic, the concept of a “new normal” was a hot topic. There was a shared sentiment that we could not go back to business as usual. The pandemic had changed the way we work, the way we live. But this acceptance of change was fundamentally reactive; the urgency of dealing with the present crisis made it difficult to plan for the future.

As the pandemic retreats from our awareness (to be replaced, no doubt, by the next crisis: Ukraine, anyone?), we are now in a position to look to the future and ask: What comes next for Hawaii? Here’s one vision, a vision of the promise and peril of remote work.

Digital Nomads and White-Collar Outsourcing

The widespread adoption of remote work will reconfigure Hawaii. Two trends are at work: First, digital nomads will settle here in greater numbers to take advantage of our climate, driving up housing prices. Meanwhile, local businesses will grow more comfortable with outsourcing work.

The first trend has been remarked upon. Major efforts are underway to capitalize on digital nomads, including a nonprofit, , founded to “attract, integrate and retain key talent, especially returning kamaaina, to create a more innovative, resilient and sustainable Hawaii.”

The second trend has been approached obliquely. Policy makers and educators have proposed training Hawaii workers to take advantage of remote work opportunities. The Department of Business, Economic Development and Tourism and the University of Hawaii have to this end, providing digital readiness courses at community college campuses and rewarding participants with refurbished laptop computers.

Buried in the optimism surrounding these initiatives is an unspoken fear. To put it bluntly, for every remote job that a local worker can take, there is a local job that can be offered to a remote worker.

It is likely that the next few years will witness a flow of jobs into and out of the state, and it’s not clear that the result will favor Hawaii.

From Mililani to Bangalore

Local employers realized during the pandemic that they can maintain productivity without in-person operations. It is only one step further to realize that their workers need not be ensconced in Mililani or Hawaii Kai. They could be working from South Dakota or Bangalore.

If this seems unlikely, look to history. Detroit was once thought an invincible city. It was unthinkable that the American auto industry could be supplanted by foreign competition. And yet it was. Today, Toyota and Honda are more popular in the United States than Chevrolet and Ford. And Detroit is a shadow of its former glory.

White-collar work may soon be as fungible as auto manufacturing. In some ways, it already is. Clerical work, accounting, customer service – these can all be outsourced. And where outsourcing is not practiced, businesses often employ software-as-a-service providers like Salesforce, substituting technology for labor.

What does this mean for Hawaii?

It means that we are put in the position of scrapping both to attract and retain jobs. Globalization is here, on our shores.

The new normal will place pressure on employers in Hawaii. Because of our state’s high cost of living, the salary necessary to attract a resident worker exceeds the salary necessary to retain a remote worker in Indiana (or India).

Not all jobs can be outsourced in this way. White-collar jobs which require a fine-grained understanding of local culture or politics will remain. But these jobs may be fewer than imagined.

In certain cases of monopoly or oligopoly, residents will be gainfully employed, protected within a powerful fiefdom. Kamehameha Schools, for example, is one of a kind. And no company is competing with Matson and Pasha Hawaii.

But many local businesses are in competition, with the world and with each other. They will face pressure to cut costs, and over time this will lead to outsourcing or the substitution of technology for labor.

This may seem alarmist, and it is. However, we can adapt. First, we must do whatever is necessary to reduce the cost of living in Hawaii. This will allow local employers to retain locals without paying a premium. Second, we must be realistic with our workforce development efforts. We should focus on those industries and specialties in which we have a natural competitive advantage. For example, our location between Asia and North America makes Hawaii an ideal site both for tourism and for international conferences.

Time seemed to slow during the pandemic, but the world accelerated all the while. We’d do well to , remembering what she told Alice: “Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!”