COVID-19 Pandemic’s Influence on the US Work from Home Workmarket

 

Foreword

The coronavirus disease outbreak at the end of 2019, which later was recognized as COVID-19, has had an unprecedented impact on the global economy and the work from home workmarket in particular. This article is intended to analyze the pandemic’s impact on the US labor market and understand the prospects for employment recovery after pandemic-related job losses. We’ll touch upon various spheres and aspects of the labor market in America like telework, remote work, job satisfaction, and more. Unfortunately, the prospects for full recovery are not at all sunny while the future pandemic’s situation is still uncertain. Let’s proceed to more details.

 

COVID-19’s Timeline in the US

The first confirmed case of COVID-19 in the US was registered in Washington state on January 21, 2020. By January 30, 2020, WHO (the World Health Organization) declared a global health emergency, but President Trump didn’t declare a US national emergency until March 13, 2020. On March 17, 2020, cases of the novel coronavirus were present in all fifty states. As the year 2020 ended, more than 20 million Americans had been infected with COVID-19 and more than 346,000 people died. ¹ A pandemic of this magnitude was certain to hurt the US job market, but how? In March and April 2020, more people lost their jobs in the US due to the COVID-19 outbreak more than at any time since the end of World War II.The the situation has been complicated by the second wave of disease outbreak and the fact that the COVID-19 crisis continues into 2021, employer-employee bonds are still breaking, and the economic and societal damage is amplifying. ²

 

The Pandemic’s Impact on the Labor Market

The total number of jobs lost between March and April 2020 is more than twice the number of jobs lost during the entire Great Recession between 2007 and 2009. Only a third of the lost jobs were recovered in May and June, and a bit more than a half were recovered by the end of the year. It took the work from home workmarket more than five years to recover after the end of the Great Recession and return to a less than 5% unemployment rate in 2016. While the peak unemployment rate during the Great Recession reached 6.3% in 2009, in April and May 2020, it was much higher, reaching 14.5%.

Figure 1. Cumulative (CES Current Employment Statistics) employment changes in the post-World War II Recession, the Great Recession, and in the current crisis. ³

During the Great Recession, hiring declined dramatically and recovered slowly. ⁴ In the COVID-19 crisis, job postings collapsed in late March 2020 (from about 850,000 per week to about 550,000 per week) across all geographic areas, industries, and occupations except essential retail (such as pharmacies and grocery stores) and nursing. ⁵ Even though those job postings recovered in June, they remained 10% to 20% lower than in January and February 2020. ⁶

Companies’ stances on remote work

Industries represented

WFH salaries

Are remote workers productive?

Career growth considerations

 

The Employment Situation in the US as of December 2020

Though the pandemic is under control, the recovery of the labor market is slow and complicated. As of December 2020, 15.8 million Americans reported they were unable to work due to their employer’s closure of business. The respondents either did not work at all or worked fewer hours due to the COVID-19 pandemic, and this measure is 1 million more people than in November 2020. From November to December 2020, the number of people employed part-time for economic reasons decreased by 471,000 to a total of 6.2 million. This measure is down from its April high of 10.9 million, but is 1.8 million more people than the February level. Only 12.8% of the respondents received at least some pay from their employer for the hours not worked. Total payroll employment declined by 140,000 in December, but the November unemployment rate was unchanged at 6.7%, as well as the number of unemployed persons—10.7 million. Although the numbers are much lower than in April, when COVID-19 burst out, they are still exceeding their pre-pandemic levels in February by almost double (3.5% and 5.7 million, respectively).

Seasonally Adjusted Unemployment Rates in 2020

Gains in professional and business services, retail trade, and construction partially balanced job losses in leisure and hospitality and in private education in December 2020. People on temporary layoff should also be referred to as unemployed. In December, their number reached 3 million, increased by 277,000. Compared to 18 million in April, the number is down considerably, however, it’s still 2.3 million higher than before COVID-19 in February. Permanent job losers face the same situation. Though their number declined by 348,000 to 3.4 million in December, it’s still up by 2.1 million since February. Partially, telework became an answer to the global lockdown, and it continued afterward. In December, 23.7% of US employees worked remotely, compared to 21.8% in November. ¹² Let’s now look at telework in more detail.

 

How Telework Preserved Work During the Pandemic

According to recent research by the University of Chicago, telework is growing fast and constitutes up to 37% of US jobs. The sectors that can adjust the quickest are Other industries can also easily adjust to telework: wholesale trade; real estate, rental and leasing; federal, state, and local governments; utilities and other services; administrative support and waste management and remediation services; arts, entertainment, and recreation; and more. ¹³ As the pandemic set in, the workers who could work from home were less likely to lose their jobs. The unemployment rate for such workers increased by 6 percentage points between February and April 2020, whereas the unemployment rate for those who could not telework rose by 14 percentage points. ¹⁴ The report reveals that workers who could telework tended to be more educated, aged 25 or older, married, white, and working full-time. As a result, their jobs typically pay more, and together, they account for 46% of all US wages. ¹⁵ Based on Google Consumer Surveys, about one-third of all US workers shifted to remote-only work by April 2020, while another one-sixth of the workforce was already doing remote-only jobs. Employees who teleworked made up 35% of workers in May, but in September the percentage decreased to 23% and remained at this level to the end of 2020. During the height of the COVID-19 pandemic, women teleworked more than men, Asians were the most likely race to telework while Hispanics were the least likely, and workers under twenty-five were the least likely of all age groups to work from home. Businesses with more teleworkers before COVID-19 reported better employee productivity during the pandemic. Larger businesses reported lower telework productivity. Still, a substantial number of businesses believe that much of the shift to remote work will become permanent. The share of days worked from home is expected to more than triple—rising from 5.5% in 2019 to 16.6% after the pandemic and remaining at 10% after the pandemic for the full-time workforce. [3]

 

Key Roles of Remote Workers by the End of 2020

The leading percentage of remote workers by the end of 2020 were individual contributors—55% of respondents—while the other roles are distributed like this: As you can see, more high-paying positions work remotely.

Remote work has been a trend of the recent decade, but only with COVID-19 have people comprehended the real advantages and possibilities revealed by telework. WFH gives people more options to choose where to live—location independence—since commutes and employer facilities don’t factor in.At present, 27% of employees admit the ability to work remotely is so important that they are ready to take a 10% to 20% pay cut to do it. Even with the COVID-19 pandemic, remote workers report a 4% higher workforce happiness index (75% versus 71% for in-office employees) and more satisfaction with their jobs than office employees (57% versus 50%). ¹⁶We can see from the states above that remote work is here to stay, especially since 80% of company leaders plan to allow employees to WFH at least part-time, and 47% agree their workers can continue to work from home full-time.Upwork states that almost 42% of the US workforce works from home and estimates that by 2025, at least 22% more will do so. This is a staggering 87% increase from the number of remote workers prior to the pandemic! ¹⁷