Bharat Ramamurti is managing director of the corporate power program at the Roosevelt Institute. The opinions expressed in this commentary are his own.
Covid-19 has forced millions of Americans to work from home. And it’s expected that, even after we get the virus under control, the number of Americans who will end up working from home will likely be much higher than it was before the pandemic. That shift will ripple throughout our economy, and it has the potential to widen the racial and gender gap even further — unless governments and private companies put smart policies in place.
According to a June 2020 report, 42% of the US labor force — about 70 million people — were working from home, while 26% were continuing to work on-site. (The remaining 33% were not working.) While many of those working from home will eventually return to the workplace, the Federal Reserve Bank of Atlanta projects that the number of full-time employees who work from home at least one day a week will nearly triple relative to 2019, when only about 10% of workers enjoyed that benefit. They project that more than 20% of workers will work two or more days a week from home going forward.
But working from home is only an option for some workers. Those in blue-collar jobs like construction, manufacturing, nursing, retail and food service are typically required to be on-site, while many in white-collar jobs, like finance and law, are able to work remotely. That means the group of people working from home looks very different from the group working on-site.
A study from the University of Chicago found that people who had jobs that were harder to perform at home had lower incomes and wealth, and were more likely to be non-White, than those who had jobs that could more easily be done remotely.
As a result, we are likely to see an even more bifurcated economy after the pandemic, in which a disproportionate number of wealthier White people work from home while disproportionate numbers of poorer people of color work on-site. White-collar workers will at least have the option to do their jobs remotely, while blue-collar workers will continue to have to go into work.
That’s likely to exacerbate disparities in both wealth and income. Working on-site is expensive and time consuming. Commuting expenses (including public transportation passes, gas and parking fees), work attire and purchased lunches can cost workers an average of up to $4,000 per year. On-site workers spend an average of 54.2 minutes per day commuting to and from work — time that people working from home can spend on leisure or with family. That additional commuting time can also mean extra child care costs as working parents are away from home for longer.
The shift to working from home is also likely to affect the housing market. People who can work from home may move out of cities and into suburban and rural areas to save on housing costs. That could potentially increase the available housing supply in cities and drive rents downward. But the catch is that it might also trigger local rent control exceptions. For example, in New York City, there were a record 15,000 empty apartments in August. The percentage of vacant units is above 5% for the first time ever and the city’s rent regulation policy — which prevents landlords from imposing dramatic rent increases year-to-year — could be voided. (Rent controls can expire when an individual apartment that was previously rent controlled is vacated.)
The work-from-home shift could also exacerbate gender divides because women are overrepresented in the kinds of lower-paid, service sector jobs that require on-site work. According to the Community Population Survey, while women make up slightly less than half of “essential workers,” they make up 76% of health care workers and 73% of social service workers — these are traditionally lower-paid jobs than other “essential” work in fields like manufacturing and energy. And, in all essential industries, women make less on average than their male counterparts in the same line of work.
Governments and private companies need to be proactive about addressing these new trends to reduce the potential racial and gender divides. To help blue-collar workers who must continue to work on-site, the federal government should raise the minimum wage to $15 an hour, strengthen unions by passing the PRO Act, which expands the number of workers covered by labor protections and prohibits certain anti-unionizing activities by employers, and give workers more voice in corporate decision-making by empowering them to elect company board members.
Federal and state governments should also prioritize access to affordable housing close to jobs that must be performed on-site and invest in public transit to cut down on commuting times and costs. And addressing the runaway cost of child care is a must.
Over the last few decades, major economic trends like globalization and the information technology revolution have primarily helped white-collar workers get ahead. Without proactive steps, the shift to working from home might be the latest trend that expands the already widening gap between white-collar and blue-collar workers in America.
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