Remote Work Has Caused City Living To Be Less Affordable For Most Workers, Study Says

by Jameelah Mullen

March 8, 2024

A brand new examine means that solely firm’s highest paid workers be capable of stay in costly cities.

Since 2020, the share of distant employees has skyrocketed. One stunning consequence is the distinction in the place administration and frontline workers stay. 

The ADP Analysis Institute performed a examine that confirmed the areas of workgroups pre- and post-pandemic. The information reveals that individuals who work in management roles are likely to stay in bigger, costlier cities, whereas individuals who work in help roles are migrating to rural areas the place housing is extra inexpensive. 

The evaluation says that “costlier cities have, on common, turn into more and more extra specialised in managerial duties for the reason that onset of the pandemic, whereas extra inexpensive ones have turn into more and more extra specialised in particular person contributor and frontline work.” 

Within the idea often called “home offshoring,” corporations can lower prices by shifting help jobs reminiscent of customer support and different administrative roles to areas the place the price of residing is decrease whereas nonetheless being headquartered in bigger, pricier cities. Distant work alternatives have made it simpler for them to recruit potential workers residing in rural areas. 

This shift might negatively impression corporations headquartered in smaller cities. They’re now competing with bigger firms that may provide greater wages and extra aggressive advantages. 

The examine additionally means that corporations profit from holding administration roles in bigger metropolitan areas like New York and Chicago. Leaders from giant corporations, universities, opponents, and media professionals can community and change concepts in particular person, which continues to be most popular over video conferencing. 

The shift to distant work is a key consider driving the $2 trillion achieve within the housing market. In response to a Redfin examine, there was an uptick in employees ditching metropolitan areas and shifting to “secondary cities” the place they’ll safe extra inexpensive housing. Standard secondary cities, reminiscent of Charleston, South Carolina, Camden, New Jersey, and Elgin, Illinois, have all seen a ten% improve within the worth of their houses.