Why digital nomads are leaving a trail of resentment

In several popular destinations worldwide, digital nomadism is causing socioeconomic problems for the local populace. As hostility towards their remote workers increases, it’s a risk that employers urgently need to manage
Digital nomad remote working on his laptop on the beach

For the thousands of digital nomads who have flocked to Mexico, life is sweet. Between their work calls, they spend their time exploring the most beautiful beaches and eating the best food the country has to offer. It’s what many dream of, yet their presence has caused a living nightmare for much of the local population

The influx of wealthy foreign workers – whose average salary is well over five times more than Mexico’s mean wage – has increased demand for accommodation in the most popular areas. This has fuelled expensive new property developments and pushed rents up to unaffordable levels for most locals. Ordinary Mexicans are being evicted from their homes and business premises to make way for new apartment blocks, coffee shops and yoga studios. Much of the rich cultural heritage of the affected areas is being bulldozed in the process. 

The situation has become so dire that local people are taking to the streets in their droves to protest. Chants of “Vivienda, sí! Desalojos, no!” (Housing, yes! Evictions, no!) can be heard loud and clear across the country. 

The sad irony is that many digital nomads moved to Mexico partly to escape the increasing cost of living in their native countries. In doing so, they’ve created an inflationary crisis for the people they have priced out and displaced.

Similar problems are occurring in other nomadic hotspots around the globe. What was once hailed as the future of working is looking fraught with complications as it causes more and more resentment among the affected communities. Businesses that employ digital nomads must therefore consider the potential ramifications. The risk of reputational damage and even costly litigation is increasing as local populations unite and organise to resist the practice.

Ruth Jones is the founder and director of 3Thinkrs, a marketing and PR agency that has embraced digital nomadism. She reports that, while the approach has “worked really well so far, the business is not naive enough to think that there’ll never be an issue”.

Although many organisations will have considered the most obvious practical complexities – how to ensure compliance with tax rules, for instance – many other potential problems aren’t even on their radar. That’s the view of Sam Ross, vice-president and legal counsel at Remote, a US-based firm that helps companies to manage employees and contractors in more than 50 countries. 

As digital nomadism is a relatively new concept that “doesn’t really have too much of a legal definition, there are quite a few red flags to be wary of”, he warns. For instance, employers have a duty under UK law to prevent illegal working and must therefore ensure that all their employees, wherever they are located, have the right to work and have secured the correct visas.

Some popular destinations have seen crackdowns on illegal working. Back in 2014, for instance, armed police stormed a cafe in Chiang Mai, Thailand, that was known haunt of digital nomads, detaining several of its patrons. While no fines were issued, this incident highlights the importance of ensuring compliance with all applicable labour laws. 

As the number of nomads increases, so too does the risk of remote workers “slipping through the net”, says Ross, who encourages employers to “ensure that they’re getting the right legal advice.

There are serious reputational risks to consider, he stresses. For example, if a firm’s nomads are “earning exceptionally high salaries but local communities aren’t seeing the benefits” in the form of improved local services – possibly because of a tax oversight – this would not reflect well on their employer.

Similarly, the nomads’ behaviour must be considered, given that they are the representatives of their employers. They should therefore be encouraged to show respect to their hosts and give back to those communities, rather than forming isolated enclaves. 

This has been a problem in Barcelona in recent years, causing widespread resentment among the local populace. Many blame digital nomads for adding nothing to their city apart from the cost of living there. Campaigners have yet to take aim at particular employers for letting this happen, but the risk of targeted activism is high as opposition builds. 

Companies that employ nomads in cities such as Barcelona would therefore be wise to seek solutions sooner rather than later if they want to avoid damaging retaliatory action. As part of this, they should educate their staff about the legal aspects of digital nomadism and offer best-practice guidance. This could extend to suggesting saturated locations to avoid. 

Charlotte Gray is a digital nomad who works for SafetyWing, a US-based insurer that specialises in providing health cover for remote workers. She reports that her firm is developing “Borderless 2.0”, a course aimed at digital nomads that suggests ways in which they can make a positive socioeconomic impact on their destinations of choice. 

“It’s making city guides with recommendations on how they can contribute, including volunteering opportunities and community groups to join,” Gray says.

She adds that, if her company were to highlight problems being caused by digital nomadism in particular locations on her list of potential destinations, “that would be enough to divert” her away from them. 

But it seems that few companies have adopted such programmes so far. Jones, for instance, admits that 3Thinkrs has yet to add a similar course to the training it offers staff, even though she has hired several nomads. 

Could this be because few employers have grasped the scale of the problem, or might it be because they believe that such advice would fall on deaf ears?

Gray disputes the latter theory. She argues that any socially conscious digital nomad would welcome such guidance, stressing that it would be a “really smart move” for employers to provide it.

Keeping track of every remote worker is no simple task, particularly for large businesses. Yet it’s crucial that this is managed correctly, with a regularly updated register of everyone’s locations. If several people are planning to work in the same location, it may even be worth considering whether it would be beneficial to establish a proper corporate presence there. 

Jones observes that such a move would enable an employer to “work with a broader sort of workforce” by recruiting local people and thereby contributing more to that location’s economy.

Despite the problems associated with digital nomadism, Jones and Gray agree that the practice is here to stay. If firms can put the right solutions in place to protect themselves, their employees and the communities affected, everyone stands to gain. Yet it remains to be seen whether they will do so quickly enough to prevent a harmful backlash. What is clear is that, when it comes to understanding the true socioeconomic impact of digital nomadism, we’ve only just scratched the surface.