Monday, July 20, 2020

Who Can’t Work From Home During a Global Pandemic?

COVID-19 rapidly spread across the United States and forced a patchwork of shutdowns that reduced business activity in order to save lives. Oregon is no exception as the “Stay Home, Save Lives” executive order was put into effect on March 23rd which enforced social distancing rules. Faced with few options, organizations who could shift to remote work did as a means to survive COVID-19. A study from the University of Chicago examined “work context and generalized work activities” from the Occupational Information Network (O*NET) to get a sense of whether or not a job could feasibly be done at home.The surveys asked if there was frequent contact with customers, in-person experiences, or specialized equipment. Each of these factors limit an employee’s ability to work remotely. Jobs were given a ranking based on responses which helped determine if none, part, or all of a position could be done at home. According to the study, 37 percent of occupations in the United States could realistically be done from home.

Vast Gaps in Remote Work Between Occupations
If we assume the national estimates on the share of workers who can telecommute roughly approximate Oregon, we can learn about our workforce and who can (and can’t) telecommute.
Over half of all the workers in Oregon who could potentially telecommute are in the five occupation groups with the best access to telework: computer and mathematical; educational instruction and library; legal; business and financial operations; and management. The presence of these occupations in different places and industries begins to tell a story of who can and can’t work from home.

Industries with the Least Telework Access Faced Steep Job Losses
The building blocks of a business and an industry are the occupations within it. Unsurprisingly then, wide gaps in telework exist between sectors. For instance, while 83 percent of jobs in educational services could feasibly be done from home, just 4 percent of positions in accommodation and food services had access to remote work. To put this in perspective, accommodation and food services employed five times as many Oregonians as educational services prior to social distancing efforts. Yet, about 29,000 education jobs could potentially be done at home compared with only 7,200 in accommodation and food services. Unsurprisingly, accommodation and food services accounted for 40 percent of job losses between March and April 2020. Again, teachers and other public employees may face cuts in the future, but it still suggests that remote work may have staved off some initial declines.

Industries split evenly around the national average of jobs with potential access to remote work at 37 percent – eight above and eight below. The quarter of a million jobs lost from March to April 2020 is a different story. Job losses were highly concentrated in sectors with below average access to telework options. Those sectors with less access to telework accounted for 60 percent of the pre-COVID-19 workforce, yet they made up 83 percent of job losses between March and April 2020. Conversely, industries with above average telecommuting access were vastly underrepresented in initial job losses. While those sectors made up 36 percent of the state’s employment in March 2020, they only made up 12 percent of monthly job losses.

Oregon Metro Areas Vary Greatly in Telework Access
The composition of local businesses has major ramifications on the share of individuals who can work from home which results in a split amongst U.S. cities. In Oregon, the Corvallis MSA led the pack with 40 percent of jobs that could viably be done from home followed closely by Portland at 39 percent. Only 27 percent of jobs in Albany were telework compatible. The divide between industries can help explain why these gaps exist. These local business communities are fairly different. Both Portland and Corvallis have robust finance, information, and professional service industries which have some of the best remote work potential. Some of Albany’s most prominent sectors are manufacturing and retail trade, neither of which have more than 25 percent of jobs with telework access.

Across the board, Oregonians who could telecommute took home a larger share of wages than those who couldn’t. In Portland, 39 percent of jobs could be done from home yet they brought in 48 percent of all wages. Differences in the share of employment and wages were wider in areas with higher telework compatibility. As access to remote work declined, the gap between share of employees who could telework and share of wages also decreased. Regardless, high earners tend to have better remote work options, leaving low-wage workers vulnerable to financial loss.

As COVID-19 cases continue to climb in Oregon and around the United States, people face an uncertain economic future. If Oregon follows the path of California, New York, or several other states, more aggressive social distancing efforts may be reinstated. Of course, public health policy is designed to save lives and has been incredibly successful in other countries. Nevertheless, opportunity costs exist and those costs are distributed disproportionately. It’s likely that industries like accommodation and food services or retail trade will be hit hard if those safety measures are necessary. For these sectors and workers, social distancing and telecommuting aren’t an option. As leaders design policy in response to COVID-19, it’s crucial that the 63 percent of workers who can’t work from home are protected.

To learn more about who can and can't work from home, read workforce analyst Brandon Schrader's full article here.

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