The Work-From-Home Divide
Published April 11, 2024
The COVID-19 pandemic has led to a significant increase in remote work opportunities, but these opportunities are unevenly distributed across the workforce. Employees with higher pay, more education, and more experience are much more likely to have the option to work from home, while those with lower pay, less education, and less experience rarely enjoy this benefit. To address the resulting tensions and perceptions of unfairness, managers should acknowledge the divide, align their own working arrangements with those of their employees, consider alternative options like a 4-day work week for onsite staff, and potentially offer one-time pay adjustments to compensate employees who cannot work remotely.
Check Out More from Steve Davis:
- Read "Americans Now Live Farther From Their Employers" by Steven J. Davis, Jose Maria Barrero, Nicholas Bloom, Mert Akan, Tom Bowen, Shelby Buckman, Luke Pardue, Liz Wilke here.
- Listen to "The Political Economy of Populism: A Conversation with Elias Papaioannou" with Steven J. Davis and Elias Papaioannou here.
- Listen to "The Power of Proximity: A Conversation with Emma Harrington On Remote Work" with Steven J. Davis and Emma Harrington here.
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>> Steven J. Davis: Remote work has exploded since the pandemic struck. Most employees like working from home at least some of the time. But this big shift in how we work and live is highly uneven across jobs and people. Frontline staff who earn modest paychecks rarely get to enjoy the benefits of working from home.
Instead, they commute every workday to engage customers and coworkers, operate machinery, and look after facilities. In contrast, highly paid professionals and managers often work from home 2 or 3 days a week, saving time, money, and aggravation, and enjoying more personal autonomy and more time with family. That's the new work from home divide.
In order to better track and understand this development, my co-authors and I built a large Language Model to read and classify job ads. We started by sampling 10,000 online job ads. We had real people read each one and flag the ads that say the job, lets the employee work from home one or more days per week.
Next, we use the results to train a Language Model to replicate the human readings. As it turns out, our Language Model replicates human judgments 99% of the time. Finally, we applied our Language Model to classify the work from home status of hundreds of millions of job ads over the past decade, and millions more ads each month.
That yields a monthly statistics on work from home opportunities by occupation, industry, city, and more. Let's look at how remote work opportunities vary with pay. Our data show that jobs with low pay around $30,000 per year, very rarely offer the option to work remotely. As we move up the pay scale, work from home opportunities become more common.
About 10% of new jobs that pay $60,000 per year offer remote work options. It's 20% for new jobs that pay 100,000 and more than 30% for new jobs that pay at least $200,000 per year. Not only that, the link between higher pay and remote work opportunities is much stronger today than before the pandemic.
There's also a clear connection to education. Jobs requiring only a high school diploma very rarely provide remote work options. But nearly 30% of jobs that require a postgraduate degree allow for hybrid or fully remote work arrangements. Work from home opportunities also rise with experience levels. Only 3% of job ads that require less than 1 year of experience offer remote work.
That makes sense because entry level workers typically need more training, oversight, and mentoring. In contrast, more than one quarter of jobs requiring 7+ years of experience offer work from home options. The more seasoned you are, the more likely that you can be effective when working remotely. Finally, there's a clear remote work divide between part-time and full-time employees.
Only 3% of ads for part-time jobs offer remote work options. In light of these big differences in work from home opportunities, what should managers do? For starters, they should openly acknowledge that a divide exists, so that employees feel heard. To avoid perceptions of unfairness, it helps to align the working arrangements of managers with those of the employees that they supervise.
It's also worth considering options like a 4-day work week for staff that must work on site. Survey data reveal that many employees prefer to work 10 hours a day, 4 days a week rather than 8 hours a day, 5 days a week. And managers should also consider one-time pay adjustments to compensate employees who miss out on the benefits of working from home.
The data make it clear, the opportunity to work remotely differs greatly by type of job, pay level, education, and experience. This new divide will endure because remote work has proved practical and beneficial in many jobs and tasks. Since the remote work divide is here to stay, managers must grapple with the resulting tensions.
If they don't, they may lose some of their best employees and experience a loss of morale and camaraderie among those who stay.