The COVID-19 pandemic has thrown the lives of millions of Americans into turmoil. Even for those who never caught the disease, their lives changed dramatically when their employer was one of the 88% of companies globally to either encourage or require its workers to do their jobs from home. After months of this policy being in force, 66% of businesses think remote work is here to stay. Large portions of the American workforce are coming to terms with the idea their home office is their only office.
What do these changes mean in the long term? How will the increasing popularity of telework alter pre-existing workplace dynamics? On the subject of remote work and the wage gap, will working from home make matters better or worse? As with any system, the new normal creates winners and losers. Despite the benefits of working from home, the switch includes mixed blessings.
Regarding benefits, a major perk that arises from working from home is that both businesses and workers save money. While businesses no longer have to buy or lease large office spaces or supply as much in overhead, workers cut out the costs associated with a daily commute. Without needing to commute into work every day, workers no longer need to live as close to their company’s office as before. Since so many businesses are currently headquartered in expensive metropolises like the California Bay Area and the Big Apple, moving away can bring employees more affordable housing and lower living costs. Already, the number of American workers who may relocate could be as high as 23 million. Migration rates could increase to 3 or 4 times as much in the near future.
Since a part of an employee’s paycheck today is meant to incentivize living near a company’s office, teleworkers who relocate may face a pay cut. However, the decrease in annual expenses more than makes up for the drop in earnings. By working from home, an American worker can save up to $4,000 a year. Businesses collectively save up to $30 billion a day by offering remote work. Location-based pay differences are a form of wage gap, but in this case, both parties come out ahead.
The same cannot be said of the more well-known wage gaps: those based on gender and race. According to the AAUW, women in the US still only earn 82% as much as men while black men earn 87% as much as white men do. While remote workplaces have the potential to contain less hiring and management biases, two factors that contribute to pay inequity for women and racial minorities, they’re far from a great equalizer. Women in remote positions still earn less than their male peers who are also working from home. Making the situation worse is the fact that women and racial minorities aren’t as likely to have the option of telework. All the benefits discussed above simply don’t apply to them.
All changes come with pros and cons. The shift to remote work is no different. This infographic from TrackTime24 illustrates the evolving dynamics work from home and the wage gap.