Who Can Telecommute?

Telecommuting has been held out as a solution for America’s transportation and land-use woes for my entire adult life and then some. Ever since the rise of the internet and the first tech bubble of the late 90s, it’s been proposed that eventually, the technology would be so good that you do your job from anywhere. That way it wouldn’t matter if Los Angeles were expensive, because you could just live in Spokane and do your job from there.

The experimental evidence we have from the last 20 years does not support this theory. An organization that promotes telecommuting found that between 2005 and 2017, the number of people working from home at least half time in the United States rose from 1.8 million to 3.9 million, or 2.9% of the  US workforce. While that number is not nothing, it effectively represents only a 1.5% reduction in the demand for transportation for work trips. Over that same period, total employment in the US rose by 12.5 million, or 8.5%. So despite the growth of telecommuting, overall employment grew much more quickly and consequently the demand for transportation continued to increase.

The continued success of large US metros relative to mid-size and small metros also suggests telecommuting is having little impact. A recent spate of “millennials are doing X” articles have tried to push the idea that growth is now shifting to mid-size cities, but it’s amazing how many articles there are citing Pittsburgh, when Allegheny County has lost population every year since 2013. In fact, given how high housing prices have had to rise in large metros to force growth elsewhere, I wonder if you could make a case that the internet has actually increased the agglomeration effects of living in a large city.

Finally, while there are clear benefits of telecommuting (lower housing and transportation costs for the employee, lower office and overhead costs for the employer), there are productivity costs as well. I’ve found in my personal experience that it’s much easier to supervise employees and coordinate a large project team when everyone is in the same office. Being in different offices in the same city is worse, and being in different time zones is even worse.

While I’m not a great manager by any stretch of the imagination, I would like to think I am at least marginally competent and that my experience in this regard is not unique. The single biggest benefit of being in the same office as other people is that it makes it impossible for them to avoid you. Emails can go unanswered, calls can go unreturned, but if I show up at your desk asking you about something, you have to respond. This is a pretty common thread in human relations – it’s much easier to keep up and keep in touch with people that you see than people you don’t.

Finally, there’s the simple fact that living in a bigger city give you more amenities. You might be able to do your job from an RV in rural Nevada, but you won’t be able to access the amenities of Las Vegas or LA.

Even throwing all of that aside, it’s worth asking who could theoretically telecommute. Chances are, if you’re reading this blog or City Observatory or Curbed or City Lab, you have a job that you could telecommute to do, or at least have a lot of friends who do. But that is not a very representative sample of American employment. The five biggest major industry sectors according to the BLS are professional and business services (20.1 million jobs), state/local government (19.4m), health care (19.1m), retail trade (15.8m), and leisure and hospitality (15.6m). My guess is that if you’re reading this, you work in professional and business services, easily the category that best lends itself to telecommuting, and is still subject to all the problems above. Some of these sectors, like health care and retail trade, have almost no potential for telecommuting, as do other major sectors like manufacturing, construction, and transportation/logistics.

Let’s do a quick analysis on the major industry sectors with low, medium, and high guesses for the percentage of people that could telecommute. All numbers are BLS 2016 data.

industries.png

At the low end, something like 10% of people will be able to consistently telecommute. That suggests we’ll see more growth in telecommuting, but it still won’t have much impact on transportation demand or housing prices. Even at the high end, if 25% of people were able to telecommute tomorrow, that would put the number of employees not telecommuting at about the same as total employment in 1993, and of course, the economy is still growing.

None of this is to say that telecommuting is per se bad, or that you shouldn’t do it if it works for your personal situation or your business. But if you’re counting on telecommuting to fix traffic and housing prices in places like Los Angeles and San Francisco, it’s not going to work. We should be planning cities for how people want to live, not hoping for technological solutions to bail us out of the problems created by a few selfish actors.

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3 thoughts on “Who Can Telecommute?

  1. James Lamb

    My experience is that companies don’t like telecommuting, even if it saves them money or opens up their options to a wider pool of employees. I have worked remotely for over a year, but twice now companies have paid for my relocation from Seattle to L.A. and I’ve gotten approached by recruiters who were willing to discuss relocation to places like Orange County, San Francisco, Milwaukee and Minneapolis, even though my job involves working on a web-based platform that can be done anywhere and I can go days without meetings or really needing to interact with everyone else despite my company’s strict policy against working remotely. (That said, I have a side gig with a company that has no offices and after 4 years, I’ve never met my supervisor in person and only talked to her on the phone 3 times.)

    Reply
    1. letsgola Post author

      Side gig work like that seems to work fairly well, where you’re almost like an independent contractor. Software/coding also seem to work well. But yeah, where you really need to work closely with people, it’s tough.

      Reply
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