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Remote work is sending people to the suburbs, not the Midwest

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Remote work is doing a lot of labor.

People hope it will temper gender imbalances by giving women with children more flexibility and keeping them in the workforce. Others think it could help cut down on commuting time and, by extension, greenhouse gas emissions. Employers see it as a way to save money on expensive office space, while employees want to be able to take advantage of cheaper housing outside large metro areas.

Some have suggested that remote workers, newly untethered from their offices in big cities, could move to and revitalize beleaguered cities and towns in the heartland, bringing with them their big paychecks and big spending. That, however, isn’t likely to happen, according to a new report from the Brookings Institution’s Metropolitan Policy Program. People aren’t moving from coastal cities to the Midwest in any meaningful way. That said, remote workers will have major effects on cities and the areas outside them, from service job losses to urban sprawl.

We talked with one of the report’s authors, senior fellow and policy director Mark Muro, about what remote work can and can’t do.

This interview has been lightly edited for clarity and brevity.

Rani Molla

Lots of people are excited by the idea that remote work could help revitalize beleaguered parts of the country. What are people hoping will happen?

Mark Muro

The idea is that talented, well-educated, often techie people will arrive in all kinds of places, bringing their human capital, bringing their high-paid jobs, and just bringing new energy into places that are not only losing population in many cases but really struggling economically.

Rani Molla

And what places are we talking about here?

Mark Muro

We think of the non-coastal, non-superstar metro areas. You can think of really interior states, and you can think of what’s known as the eastern heartland, sweeping down from the upper Midwest into the south, or the western heartland.

Rani Molla

Okay, but what does the data show? Are people actually saying, “Hey, I have this remote job so now I’m going to move to Cleveland”?

Mark Muro

Lots is happening. People are moving around, but it’s not exactly the movements that maybe people are hoping for or expecting. In the big coastal cities, there’s certainly movement and there’s outflow, but we’re talking especially about the Bay Area and New York City. Elsewhere, there isn’t a massive uptick in movement from last year.

Rani Molla

So people are leaving some of the biggest metros. Where are they moving to?

Mark Muro

Interestingly, they’re mostly moving to the suburbs. They’re not moving, for the most part, to Wichita to save the heartland. They’re moving either farther out within the metro or into nearby counties. So nearby counties around the New York area or in the Bay Area, moving to Alameda County, and so on. And they’re mostly shorter moves.

In the end, the volume of moves in most places isn’t really that much more than a usual year with the exception of New York City, the New York region, and the Bay Area. It’s a movement out to the suburbs or even the exurbs, but it’s still tethered to the big metros.

Rani Molla

So people from these big cities are moving outward, creating this sort of doughnut effect from the center of big cities, but they’re not necessarily moving to the Midwest or to some beleaguered area of the country in a meaningful way.

Mark Muro

A smattering of them are. We looked at it closely in the Bay Area: 700,000 moves out of the Bay Area, only 12,000 into 19 classic heartland states. It’s not the main thing happening, let’s put it that way.

Rani Molla

As for the smaller moves outside of cities, is that just a matter of uncertainty surrounding the future of work? Like, “My boss might change her mind next year and make me come back to the office, I can’t go too far away”?

Mark Muro

I think that’s a big factor — or hybrid work, meaning you’ve got to come in two days a week. That’s gonna limit where you can move. The other thing that’s happening is that remote work is declining. It was about 57 percent of professional workers were working remotely a year ago in May. This May it was 30 percent. I think it will go down further. It won’t go all the way down. But even remote work may not be as massive a trend as expected.

Rani Molla

What are the economic effects of having a large group of people working from home some of the time and making these smaller moves outside of the city?

Mark Muro

On the upside, maybe it could benefit participation in the labor force, maybe it does improve conditions of work for people. On the negative, I think it’s a sprawl driver. I think it’s not great for global warming. And the impacts near and within metros are going to be substantial. Movement out of the central office area — what happens to all of the lunches and services provided in the downtown? We’re going to see hubs of urbanism in the suburbs. And I think we’re gonna see sprawl and movement into the exurbs.

Rani Molla

So remote work isn’t going to save the heartland. What will revitalize those places?

Mark Muro

Ultimately, for better or worse, places are left with the kind of basics of economic development, which increasingly means trying to build digital capabilities, digital industries. It’s about training. It’s about being a good place to live. More important than ever is support for families. Making it a good place to live and work really does matter. And we do think there are some federal policy ideas coming down the pike that may be helpful, including for creating in a bunch of inland places tech hubs with significant investment in local colleges, universities, workforce, and all of that. But we have a lot of work to do to turn around a lot of places.

Rani Molla

Why are tech companies locating offices in smaller but still sizable and popular cities?

Mark Muro

This is more real, in some ways, I think, than the kind of exodus idea. I think it’s dawning on big tech that they will do much better going to the talent than trying to get the talent to come to places like the Bay Area. So the South — as they deal with diversity and inclusion issues, the need to access more diverse workforces — is an incredible opportunity for them.

Rani Molla

You and I have talked before about agglomeration, the idea that the concentration of workers and industries and supply chains in certain areas is going to make it more likely that other workers and industries and supply chains concentrate there. When people work from anywhere, does agglomeration still matter?

Mark Muro

It’s a great question. Agglomeration, I think, is a fact of the universe, but it is contingent to some extent on technology and communication. In the past, every communications advance led to more clustering. And I think that that clustering is going to remain crucial. But we don’t know totally how this is going to play out. Our evidence suggests that the long-term moves are not a massive feature yet but that remote work is having an impact, influencing where people work and the decisions they make. But that need to retain the tie to the office seems to be remaining.

So I think we may see more movement, but not necessarily an end to these intense clusters. They’re so powerful, especially in the early stages of an emerging technology. I think the AI platform is emerging. And that’s when clustering matters most: When something becomes a commodity, people move away. But I think the core of the AI economy is keeping tech workers in the big hubs.

Rani Molla

I recently wrote an article about how it’s very difficult to hire people right now, for a variety of reasons. And to deal with this, a lot of companies and industries are offering remote work as a sort of must-have perk. Now, 10 percent of jobs on LinkedIn and ZipRecruiter allow you to at least do some of your work remotely, up from 2 percent last year. And that still doesn’t seem to be enough. Those jobs are getting four times the applications. Do you see remote work continuing to rise to deal with hiring problems?

Mark Muro

First, remote work is not going back to the low level it was pre-pandemic. My point is simply that remote work isn’t always going to be super far, super remote. It’s going to be near-remote. I think remote work is going to remain critical to not only what workers want (or say they want) but what firms offer. And I think you’ll see that as a ubiquitous sort of starting-point offer. It’ll just be assumed.

Rani Molla

Obviously, jobs that are typically done on computers can more easily be remote. But increasingly, jobs you wouldn’t expect — home health aides for example, who most of the time have to physically go into people’s homes — are getting to do at least a small portion of their work, the paperwork portion, remotely. Do you see remote work rising in these more manual types of jobs as well?

Mark Muro

Yes, very much. Remote work for part of the time of every week is becoming and will become more ubiquitous. And anything that blocks people from taking jobs is going to be questioned and new benefits provided. I think it’s been a seller’s market for labor for a while. And therefore, remote work is going to become an offer from all kinds of employers.

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