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Why labor economists say the remote work 'revolution' is here to stay

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Remote work surged in the pandemic era — but this trend, borne of necessity for public health, has now become a fixture of the U.S. job market, one that's likely to remain entrenched, according to labor experts.

Almost 10% of online job searches in September mentioned "remote work," a nearly sixfold increase relative to September 2019, before the Covid-19 pandemic, according to a recent report published by Indeed and Glassdoor.

Employers are advertising work-from-home opportunities more frequently, too. Almost 9% of online job listings did so, up threefold over the same period, the report said. ZipRecruiter, another job site, found a fourfold increase in job listings mentioning remote work, to a 12% total share.

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"This is going to be an enduring feature of the employment landscape," said Aaron Terrazas, chief economist at Glassdoor.

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Employees value the benefits of remote work similarly to a roughly 5% to 7% pay increase. As a result, businesses can theoretically reduce their payroll costs by a similar amount, Bloom said.

Further, worker retention improves among businesses that offer remote work, and the dynamic allows employers to recruit talent from across the country instead of a narrow geographic pool, said Julia Pollak, chief economist at ZipRecruiter.

"People really, really want remote work," Pollak said, adding: "It's difficult to put the genie back in the bottle."

'Significant variation' in remote work opportunities

That said, most jobs in the U.S. economy can't be done remotely.

About 37% of jobs in the U.S. can plausibly be done entirely at home, according to a 2020 study by Jonathan Dingel and Brent Neiman, economists at the University of Chicago.

Survey data compiled by Barrero, Bloom, Buckman and Davis suggest nearly 14% of employees worked from home full-time as of fall 2022. About 29% had a "hybrid" arrangement, and 57% were fully on site.

There's "significant variation" in who can and can't work from home, based on factors such as occupation and geography, Dingel and Neiman said. For example, most jobs in finance, corporate management, and professional and scientific services can be done from home; conversely, very few workers in agriculture, hotels and restaurants, or retail can work from home.

People really, really want remote work. It's difficult to put the genie back in the bottle.
Julia Pollak
chief economist at ZipRecruiter

Those who can't work from home are disproportionately lower-income, lack a college degree and are people of color, Dingel and Neiman said.

"The benefits of a persistent shift to [work from home] will be broadly felt but flow mainly to the better educated and the highly paid," Barrero, Bloom and Davis wrote.

Some workers do see benefits to being in the office, including face-to-face collaboration, socializing and boundaries between work and personal life.

There may also be unintended diversity impacts. For example, women tend to prefer remote work more than men — about 66% vs. 54%, respectively, according to ZipRecruiter. While this may help recruit more women, it also poses a worry, Bloom said, since evidence suggests working from home while colleagues are in the office can be "highly damaging to your career."

It's also unclear how businesses may change their tune to become less accommodative if the job market cools. The Federal Reserve is raising borrowing costs to slow the economy and tame persistently high inflation; the job market is expected to cool, too, as a result, and workers may lose the bargaining power they enjoy right now.

Source: https://www.cnbc.com/2022/12/01/why-labor-economists-say-the-remote-work-revolution-is-here-to-stay.html


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