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How 3 years of work from home have changed the US economy forever

How 3 years of work from home have changed the US economy forever
PolicyPolicy1 min read
Jack Coopersmith sits outside his apartment and takes part in a remote meeting while working from home in May 22, 2020.Brian Snyder/Reuters
  • It's been about three years since many workers had to work from home because of coronavirus.
  • From the labor market to business establishments, remote work has had many impacts on the economy.

Around three years ago, many office workers grabbed their last coffee before riding the elevator up to their office floor. They ate their lunches with their coworkers in office kitchens one last time, and said goodbye to in-person meetings and their desk neighbors — perhaps forever.

It's been over three years since the World Health Organization declared Covid-19 a pandemic and many Americans were pushed into remote work. While some have since returned to the office, others have decided they want to still work from home. Some enjoy hybrid work too, going into the office sometimes. Their former in-person colleagues may have quit and moved on to new jobs during the Great Resignation, perhaps where they can work remotely too.

"The world of work has flipped upside down," Scott Dobroski, a career expert at Indeed, told Insider. "And because the world of work has changed, it has implications for the US economy."

The results aren't all good or all bad. Remote work has given some workers flexibility in their schedules, benefitting working parents, family planning, and people with disabilities. It's also boosted some local and leisure businesses that saw slow weekdays in the "Before Times," at the expense of commuter-driven businesses.

Dobroski pointed to Indeed data that shows the share of remote job openings is about three times its pre-pandemic level. He noted that's one "strong" indicator that "remote work is here to stay."

Adam Ozimek, chief economist at Economic Innovation Group, shared a similar sentiment.

"Remote work has been a huge and permanent change to how people work and live," Ozimek told Insider. "I don't think it's going anywhere."

Here are some of the ways remote work has changed workers and the economy.

Downtown areas have seen a huge decline in commuters

Downtown areas have seen a huge decline in commuters
Barry Winiker/Getty Images

Dobroski said "people are no longer commuting to work in droves" — impacting businesses that used to benefit from people heading to work.

"We know small businesses have really been hit hard in metropolitan areas where used to have thousands of employees go into work every day and buy lunch or buy local goods," Dobroski said.

Ozimek said "downtown areas, especially in large expensive cities, are feeling economic adjustment costs from remote work."

"There are different implications for economic geography depending on which kinds of remote work predominate," Ozimek said. "When you have hybrid remote work, that allows people to live farther away from where they work, but still have to have some geographic connection. So your commuting zone might go from one hour to two or three hours, and this essentially extends the size of the labor market for that employer and for that city."

Remote work has impacted different kinds of retail establishments, especially clothing businesses

Remote work has impacted different kinds of retail establishments, especially clothing businesses
Witthaya Prasongsin/Getty Images

Remote work has also changed demand for some brick-and-mortar stores. A JPMorgan Chase Institute report used credit and debit card data of a few cities and their outlying suburbs from the fourth quarter of 2019 to the the fourth quarter of 2021 to look at changes in growth for different kinds of business establishments.

Grocery establishments and restaurants were the two kinds of businesses that were above their fourth-quarter 2019 level by the last quarter of 2021. Clothing establishments were furthest from getting back to the level in the fourth quarter of 2019 among the different kinds of businesses that were part of the report.

"Neighborhoods with more exposure to the adoption of work-from-home lost more establishments" according to that report. "The differential recovery of establishments across retail goods and services provides evidence of such a shift in demand consistent with WFH habits."

Looking ahead, business owners and employers will have to continue to think about remote work consumers.

"The patterns of things that people are doing every day in 2023 don't look exactly like they looked in 2019," Chris Wheat, president for the JPMorgan Chase Institute, told Insider. "So those kinds of business models may need to shift to reflect those changes."

Some companies have decided to close offices, and remote work has changed the purpose of an office

Some companies have decided to close offices, and remote work has changed the purpose of an office
Ezra Bailey/Getty Images

Some companies, such as Yelp, have downsized their offices, as people can work remotely. According to an article from The Washington Post, Yelp CEO Jeremy Stoppelman said hybrid offices are "the worst of both worlds."

Some companies, like Apple, have wanted people to work in their offices again at least part of the time. However, one report from ADP Research Institute showed that if people had to go back to the office all the time, many would think about looking for new work. One reason people may not want to go back is because they moved away, perhaps to a completely different state.

While some companies want workers back in the office, their decisions may change depending on competition.

"Just because the existing managers, business owners, executives decide that their company is not going to go remote, doesn't mean that that's the end of the discussion," Ozimek said. "In the long run, whether they're going to actually be remote is going to be determined by competition, labor markets, and seeing whether those firms who try to go remote end up succeeding or those firms who don't go remote end up succeeding."

Still, some companies may find the office helpful for certain types of work best done in person.

"Workspaces today are being most utilized for collaboration spaces or focus spaces," Dobroski said.

Employment in transportation and warehousing boomed as people bought desks and other items to work from home

Employment in transportation and warehousing boomed as people bought desks and other items to work from home
Luis Alvarez/Getty Images

While some businesses and offices have closed, shipping businesses and online stores have benefited from the work-from-home economy.

This has also meant demand for transportation and warehousing. Supply chain issues were rampant during the pandemic, in part due to soaring demand and shortages. As Insider reported toward the end of 2022, supply chain woes seem to have largely dissipated.

According to Bureau of Labor Statistics data, the employment level for transportation and warehousing had rebounded toward the end of 2020 after falling during the pandemic recession.

And employment for couriers and messengers mostly held stable in March and April 2020 while many other sectors were shedding jobs. That sector mainly saw monthly job gains throughout the pandemic, with some declines more recently. Transportation and warehousing also saw employment fall from January 2023 to February 2023.

Bleisure has helped hotels and the travel industry

Bleisure has helped hotels and the travel industry
Thomas Barwick/Getty Images

Hotels also had to adjust to people eager to work remotely. As Insider reported in 2021, many hotels offered packages that may interest workers.

One example is Hyatt. Available in different locations around the world, people can work from a hotel room from 7 a.m. to 7 p.m. for a day.

"We're seeing that increased work flexibility and remote work has led to longer stays and increased occupancy on traditional shoulder nights, Sunday and Thursday," Asad Ahmed, senior vice president of Americas commercial services at Hyatt, said in a statement to Insider in 2022. "Guests are extending business trips into the weekend, extending leisure trips to work remotely in destinations, or meeting with colleagues in a hybrid environment."

Marriott also has a package: Marriott Bonvoy Day Pass Package, which includes a room with a 6 a.m. check in and a 6 p.m. check out.

"While Marriott Bonvoy Day Pass enables guests to work from many properties, we've seen longer stays lengthen with the rise in blended travel," a Marriott spokesperson said in an email in 2022. "In fact, Marriott's third quarter day-of-the-week trends continue to suggest that travelers are combining leisure and business trips with the average length of a transient business trip up more than 15% compared to 2019."

A few industries stand out for their number of remote workers

Remote work has helped job seekers with disabilities

Remote work has helped job seekers with disabilities
MixMedia/Getty Images

Working from home has also helped the employment of people with disabilities. According to data from the Bureau of Labor Statistics' Employment Situation, the non-seasonally-adjusted employment-population ratio for people with disabilities was at a new high in December 2022 and January 2023, at 22.4%. Before the pandemic, the highest ratio was back in September 2008, just a few months after the start of this series.

Arlene Kanter, a professor at Syracuse University College of Law, noted in a Harvard Law School post some of the benefits of remote work for workers with disabilities. These positives included accessibility, for instance, but also "privacy that may be needed to address medical issues that cannot be addressed in the workplace."

Results from LeanIn.Org and McKinsey's 2022 Women in the Workplace report also found women with disabilities that mainly work remotely are "less likely to experience certain microaggressions, such as hearing negative comments about their appearance" than those who typically work onsite. The fact sheet shared with Insider also noted that about two-thirds of women with disabilities "want to work mostly remotely."

Overall, remote work has been helpful for many different people who want to be part of the labor force, according to Ozimek.

"I think it allows a lot of people who might otherwise not have worked to work," Ozimek said. "Caregivers, disabled individuals, mothers, fathers — it makes it easier to connect with the labor market and be employed, gives you more flexibility around your day, around your time use, gets rid of the time-consuming commute."

Teleheath opened up opportunities for healthcare professionals

Teleheath opened up opportunities for healthcare professionals
Luis Alvarez/Getty Images

Hospital workers have been on the frontlines of the pandemic. There's also been a shortage of workers, burnout, and physicians considering joining the Great Resignation.

But there are also some remote opportunities in healthcare, which may help the labor shortage. Wendy Deibert of Caregility, a virtual care platform, recently did an interview about virtual nursing that was published in a Healthcare IT News story.

"Virtual nursing is a new model that health systems are implementing to help address workforce issues," Deibert said. "Supported by video-enabled telehealth engagement at the patient's bedside, virtual nursing or telenursing programs use experienced nurses in remote roles to guide and support patient care from a centralized hub."

Dobroski pointed out that three of the top 25 jobs that made Indeed's list of "best jobs" were in healthcare and that they had some possibility of being remote and hybrid based on job posting data. That includes licensed professional counselors.

"We expect to see even more jobs with virtual and flexible options in the healthcare and telehealth field," Dobroski said. "It's only the beginning of that industry."

Remote work helped working parents and can also increase the fertility rate

Remote work helped working parents and can also increase the fertility rate
Ridofranz/Getty Images

An analysis published by the Economic Innovation Group looked at how remote work may relate to family formation plans, although Ozimek noted to Insider that this is still early research.

"What we found was that after controlling for detailed demographic and economic controls, we, in general, find that remote work is associated with more family formation and plans to have more children," Ozimek, who was one of the co-authors of this analysis, said. "In particular, we saw these effects strongest for somewhat older women and those who already have some children."

Additionally, the research finds that among women whose finances have improved, those working remotely were more likely to try to have a baby or already be pregnant than those working in person.

"Women whose household finances have gotten 'much better' in the past year are more than 10 percentage points more likely to report being pregnant or trying to be so if they are remote, whereas for women with stable or deteriorating financial situations, there's no difference between remote and non-remote," the analysis on Economic Innovation Group stated.

Moving forward, employers still have to think about offering remote work, as "a lot of people won't even apply to jobs" without it

Moving forward, employers still have to think about offering remote work, as "a lot of people won
Paul Bradbury/Getty Images

Dobroski noted that some surveys show "overwhelmingly employees are loving flexibility and are now used to it and now not only expect flexibility, but demand it."

"So a lot of people won't even apply to jobs now if there is not a remote work or flexible option to work," he added.

This may include the next college graduates.

"We know that the next generation because of how they have been working in universities, colleges and outside in over the past three years, they're now used to and accustomed to seeing remote work and flexibility," Dobroski said.

Looking beyond just the new class of workers, job seekers not having to live near an office to work in person could help address hiring woes.

"If someone is in need of a worker in a job that can be remote, they can hire someone wherever they are and they're not limited to their local labor market," Ozimek said. "So long run, I do expect that to be positive for productivity growth, but also for unemployment and the ability of people to find jobs and the workers and firms to find workers."

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