Thursday, April 16, 2020

Size of Remote Work Markets Depends on How You Define It

More people are working at home, and have been since 1980. Some believe those trends will accelerate in the wake of the Covid-19 pandemic. But it is hard to pinpoint the lasting impact of episodic events when the underlying trends already were in motion. One substantial driver is the number of home-based businesses (the self employed). 


The other figure is the number of employees of firms who work remotely, full time, half time or only episodically. Both have grown since 1980, but it is not always clear whether a home-based business qualifies as remote work, when we try and quantify the impact of employees working from their homes. 


One study found that there are 6.6 million home-based businesses in the United States, employing more than 13 million people nationwide, in 2008. If there were 120 million full-time employees in 2008, then the self-employed and working from home workforce was itself about 11 percent of the total base of full-time employed people. 


So one to two percent of remote workers would not at all be surprising. One has to exclude all home-based businesses from the statistics to get a picture of what amount of employees actually work from home, full time. 


In 2017, three percent of full-time U.S. workers answered that they primarily “worked at home,” according to the Federal Reserve Bank. More casual work from home--a few days a month--also increased. Self-employed people were quite commonly working full time from home. 


The Federal Highway Administration’s 2017 National Household Travel Survey (NHTS), found that an additional seven percent of full-time workers telecommuted four days or more per month.


source: Federal Reserve Bank


Over time, the number of people working from home has slowly grown. The percentage of all workers who worked at least one day at home each week increased from seven percent in 1997 to 9.5 percent in 2010, according to the U.S. Census. That is growth of 2.5 percent over about 13 years. 


During this same time period, the population working exclusively from home increased from 4.8 percent of all workers to 6.6 percent. Keep in mind, though, that “nearly half of home-based workers were self-employed, the Census Bureau reported. 


Adjusting for that fact, the percentage of employees working full time at home was 3.3 percent. 


The population working both at home and at another location increased from 2.2 percent in 1997 to 2.8 percent of all workers, in 2010. That is 0.6 percent over a 13-year period. 


The percentage of workers who worked the majority of the workweek at home increased from 3.6 percent to 4.3 percent of the population between 2005 and 2010.


About one-fourth of home-based workers were in management, business, and financial occupations, while home-based work in computer, engineering, and science occupations increased by 69 percent between 2000 and 2010.


source: U.S. Census


As always, definitions and assumptions matter when making predictions. One can cite big number for remote work, if one includes people who work from home once a week or a few days a month. One gets smaller numbers if only counting people who do so half time or full time. 


And one almost has to eliminate home-based businesses run by the self-employed entirely. They absolutely matter when looking at markets and activities related to work from home. They might not count for remote work conducted away from a home office or other company site.

No comments:

Will AI Actually Boost Productivity and Consumer Demand? Maybe Not

A recent report by PwC suggests artificial intelligence will generate $15.7 trillion in economic impact to 2030. Most of us, reading, seein...