Along those lines, a feature article written by urban studies theorist Richard Florida and economist Adam Ozimek that appeared in this past weekend’s Wall Street Journal explores how remote working has the potential to reshape America’s urban geography in very fundamental ways.
Just before the first lockdowns began in April 2020, fewer than 10% of the U.S. labor force worked remotely full-time. But barely a month later, around half of the labor was working remotely. And now, even after the slow easing of workplace restrictions that began to take effect in the summer of 2020, most of the workers who were working remotely have continued to do so.
The longer-term forecast is that perhaps 25% of the labor force will continue to work fully remote, even after life returns to “normal” in the post-COVID era.
For clues as to why the “new normal” will be so different from the “old” one, we can start with worker productivity data. Stanford University economist Nicholas Bloom has studied such productivity trends in the wake of the coronavirus and finds evidence that the productivity boost from remote work could be as high as 2.5%.
Sure, there may be more instances of personal work being done on company time, but counterbalancing that is the decline of commuting time, as well as the end of time-suck distractions that characterized daily life at the office.
As Florida and Ozimek explain further in their WSJ article:
“Major companies … have already announced that employees working from home may continue to do so permanently. They have embraced remote work not only because it saves them money on office space, but because it gives them greater access to talent, since they don’t have to relocate new hires.”
The shift to remote working severs the traditional connection between where people live and where they work. The impact of that change promises to be significant for quite a few cities, towns and regions. For smaller urban areas especially, they can now build their local economies based on remote workers and thus compete more easily against the big-city, high-tech coastal business centers that have dominated the employment landscape for so long.
Whereas metro areas like Boston, San Francisco, Washington DC and New York had become prohibitively expensive from a cost-of-living standpoint, today smaller metro areas such as Austin, Charlotte, Nashville and Denver are able to use their more attractive cost-of-living characteristics to attract newly mobile professionals who wish to keep more of their hard-earned incomes.
For smaller urban areas and regions such as Tulsa, OK, Bozeman, MT, Door County, WI and the Hudson Valley of New York it’s a similar scenario, as they become magnets for newly mobile workers whose work relies on digital tools, not physical location.
Pew Research has found that the number of people moving spiked in the months following the onset of the coronavirus pandemic – who suddenly were relocating at double the pre-pandemic rate. As for the reasons why, more than half of newly remote workers who are looking to relocate say that they would like a significantly less expensive house. The locational choices they have are far more numerous than before, because they can select a place that best meets their own personal or family needs without worrying about how much they can earn in the local business market.
For many cities and regions, economic development initiatives are likely to morph from luring companies with special tax incentives or other financial perks, and more towards luring a workforce through civic services and amenities: better schools, safer streets, and more parks and green spaces.
There’s no question that the “big city” will continue to hold attraction for certain segments of the populace. Younger workers without children will be drawn to the excitement and edginess of urban living without having to regard for things like quality schools. Those with a love for the arts will continue to value the kind of convenient access to museums, theatres and the symphony that only a large city can provide. And sports fanatics will never want to be too far away from attending the games of their favorite teams.
But for families with children, or for people who wish to have a less “city” environment, their options are broader than ever before. Those people will likely be attracted to small cities, high-end suburbs, exurban environments or rural regions that offer attractive amenities including recreation.
Getting the short end of the stick will be older suburbs or other run-of-the-mill localities with little to offer but tract housing – or anything else that’s even remotely “unique.”
They’re interesting future prospects we’re looking at – and on balance probably a good one for the country and our society as it’s enabling us to smooth out some of the stark regional disparities that had developed over the past several decades.
What are your thoughts on these trends? Please share your perspectives with other readers.