Andrew Bridger explores how our relationship with remote work influences communities, and what the future of work means both for the countryside and the city.
In the years before the industrial revolution, working from home was the default, whether it was on the family farm, in the household, or Luddites weaving in their quarters. It was only with the emergence of factories, and later offices, that the idea of workplaces, central business districts (CBDs) and business parks came along. However, recently catalysts such as the long-term decline in online communication costs, accompanied by pandemic lockdowns, have pushed many workplaces back into the home. Recent data from Australia gives an insight into how the pandemic has shaped the way we work. Due COVID-19 measures, a staggering 40% of jobholders in Australia are now working from home, compared to just 8% prior to the pandemic. It is likely that this proportion will continue to be at a much higher level than before COVID-19. How will this shift to working from home impact our cities, inequality, and work-life balance?
Escape to the country
Eerily quiet CBD streets were a hallmark of 2020, as “knowledge” jobs were relocated online. Many countries experienced higher migration from congested cities to regional areas (regions outside the metropolitan area of a major city). Coastal house prices in regional Australia skyrocketed. Many regional areas that have traditionally lost young workers to the city in search of employment have found these young people returning, but this time with their city jobs.
Along with the migration of people, economic activity also moved, with well-paid city workers looking to spend their money closer to home. Like most of the world during the pandemic, Australian consumer spending shifted away from services to goods, with increased spending online. Rather than saving for an international holiday, people renovated, redecorated and kitted out home offices. The regional unemployment rate in Australia is now 3.8%, below the city unemployment rate of 4.1%. Regional job advertisements in Australia are now 73% higher than their pre-COVID-19 average. Demand for professionals is strongest — accounting for one-quarter of all vacancies in regional areas. But the challenge for these regions is whether they can accommodate this growth. The economic realities of shallow labour markets, distance and geographic inequalities that have held these regions back in the past have not disappeared. Poor access to services, lack of infrastructure, and increased exposure to natural disasters, extreme climate and weather events are just some reasons that could drive knowledge workers back to CBDs.
This increased economic activity could provide local governments with the much-awaited funding to address these issues, through enabling the creation of adequate climate-resistant infrastructure, along with the necessary disaster response plans. Funding digital health technologies in these regions could also help alleviate inequalities between health outcomes of urban and rural populations, while reducing costs associated with delivering health care. Community, health and economic outcomes are linked. It’s difficult to participate in the workforce if you are unwell, while it’s difficult for an individual to be healthy if their local community is unhealthy. Health technologies could improve patient outcomes, prevent chronic disease and improve the community’s overall quality of care, particularly in regional areas.
But does this potential boom for the regions mean a bust for the city? The death of the CBD is exaggerated. The rules of supply and demand still hold and will mitigate a mass exodus of businesses. Declining office rents will attract new businesses to relocate to CBDs. In the short-term, many firms – such as bars, cafes and restaurants – that relied heavily on the nine to five-foot traffic will suffer financially. However, this abrupt change also presents an opportunity for CBDs to transform themselves: to become a place not only where you work, but also live and play. The best cities in the world are not only hubs for economic activity but also for social activity. According to Nestpick, an on-demand housing platform, Melbourne, Australia’s second-largest city, is the best city in the world for remote working. Melbourne scored highly due to amenities such as safety, health care, culture and leisure activities.
Many firms and employees prefer a hybrid model, which will continue to link workers to cities. Surveys from Australia indicate that a significant proportion of employees would prefer two or three days a week at home, with many firms expecting to maintain CBD offices because of accessibility. Most knowledge jobs are likely to remain connected to the city. Industries, such as finance, law, and IT, are less likely to be located in regional areas because they benefit from knowledge spillovers, deep labour markets, and economies of scale that only CBDs can provide.
Working from home can improve people’s lives by giving them more choice and control over their day. Australian city workers’ average commute was 67 minutes a day in 2019. Instead of spending this time travelling on overcrowded public transport, the increased flexibility could also provide more time for involvement in the local community, such as a parent coaching their child’s football team. This is arguably a more productive use of time. Congestion and time spent travelling to work have significant economic and wider societal costs. Freeing up this time for workers could provide the flexibility they need to spend more moments with their families and in their local community. Despite the pandemic, one-quarter of Australians participated in unpaid voluntary work through an organisation in 2020. However, headline economic indicators such as GDP and employment exclude non-market activity such as volunteering in the local community. The most used measures of our economic welfare ignore the value generated by formal volunteering and informal help. This could contribute to society undervaluing unpaid work, which is arguably a productive use of time.
Flexible work arrangements can also increase participation in the workforce for certain demographics, such as people with disabilities or those with caring responsibilities. But when working from home, individuals may take on more housework and caring responsibilities. Data from Australia shows that during lockdowns, disproportionate amounts of household labour fell onto female workers, with women more likely to have spent time on unpaid indoor housework, cooking, and the supervision of children. However, remote work could allow for a combination of paid and unpaid work in a way that a factory or office might not. History shows that as factories spread throughout the industrial world, female labour-force participation fell. As remote work spreads, perhaps female labour-force participation might increase. A report by Nous Group, an Australian consulting firm, found that flexible work arrangements can help close the gender and unpaid work gap while saving businesses money.
Nevertheless, it is impossible to look over one crucial aspect of this trend: people with high-income jobs were more likely to work from home during the pandemic than those on the lower end of the income spectrum. Occupational data from the United States shows that low-wage jobs tend to have low remote workability, while high-wage jobs tend to have higher remote workability. In the near term, it appears that the benefits of the shift to working from home are likely to flow disproportionally to higher-income workers, further deepening the inequalities and divisions in our societies.
Flexibility is key
Unlike many other forced changes in our lives due to the pandemic, it appears that the number of workers working from home is likely to remain higher than before the pandemic. As with most technological changes in the workplace, the outcome of this shift will likely be positive. Policymakers should support, not block, the transition to working from home. However, governments should also monitor the labour market and regulatory environment to ensure they remain suitable; that they are fair, flexible and efficient for workers and the wider community.