Mark Knold, Chief Economist
Lyndsey Stram, Regional Economist
Michael Jeanfreau, Regional Economist
Historically, when seismic events hit, rapid and often lasting changes emerge. COVID-19 is such an event. Time will reveal the full extent of pandemic-induced changes, but one that is already evident is the shift in the work environment. To name it directly—telework. For those where it is possible, the pandemic has shifted people’s work environment from their offices to their homes. Work is still being done, it has just undergone a locational shift.
In recognition of this change, starting in May 2020, the U.S. Bureau of Labor Statistics (BLS) incorporated questions surrounding telework into its monthly household survey of workers. It is here that a picture of telework during COVID-19 begins to develop.
There is an initial drawback to the information though. There are no data to compare it with before COVID-19. The mechanics of teleworking were largely in place, otherwise it would not have been successful when COVID-19 broke out. But it was not pervasive enough to warrant a collection of questions surrounding its particulars.
Then came COVID-19. Commerce began shutting down in March of 2020 and was extensive by April. It wasn’t until May that these COVID-related telework questions were initiated by BLS, so we really do not have a pre-COVID-19 reference point. Regardless, we know that the amount of teleworking changed.
May’s initial data revealed that 35% of all national workers age 16 and older were now working for pay at home. We confidently surmise that it wasn’t that high before COVID-19. Such a dramatic increase shows teleworking before the pandemic had the potential to be extensive. Since it was not, something else was holding it back. That would have been employer trepidation. Teleworking was possible, but employers were approaching it like sticking their toe into unknown water. With the pandemic, employers were pushed into the pool.
Due to the pandemic’s no-other-option reality, employer trepidation has come crashing down. Because of this, I like to call the COVID-19 economy—in relation to teleworking—the Great Experiment. It has and does work. The only question is, how much telework will remain in the post-COVID world?
The BLS telework information is only available at the national level, so any Utah-specific analysis will have to be simulated. Utah’s industrial and occupational mix mirrors the national profile, so it is probably safe to assume that the national profile is a close archetype of the otherwise missing Utah information.
The most fundamental aspect with teleworking is the ability to do so. We are not talking about permission but instead the nature of the work. There will be two foundations to evaluate. Can work tools be made mobile, and can or is your work separate from your customer base?
The foundational tool with teleworking is a computer and the Internet. What will separate those who can or cannot telework is; Are these tools the primary tools of your job? If your work’s foundation is performed on a computer, then there is a good chance you can shift working from the office to home. This will have its restrictions, though. For example, aspects of healthcare may significantly use a computer, but can it be used away from your customer base? Can the caregiver be detached from the patient? So, the nature of one’s work will play a significant role in who and what segments of the working population can utilize teleworking.
The following chart begins our analysis with a big picture look at who and in what quantity the national labor force teleworked due to COVID-19.
The high point of teleworking was right out of the gate. Thereafter, as the differing state economies reopened, the amount of teleworking diminished. The low point is October 2020, and then we see a quick and slight rise to December, with marginal waning since.
This chart reveals a third factor dictating who and in what quantity determines teleworking. We mentioned the work tools and we mentioned the proximity to one’s customers. The third factor is the prevalence of the virus itself. The virus waned throughout the summer months and then re-emerged with a second wave in the fall and winter. That is the reason for the graph’s uptick after October 2020.
The chart reveals two other aspects. The first is that teleworking is a greater option for the female side of the labor force than for males. The second is that older workers are in a better position to take advantage of teleworking than are younger workers.
The male-female contrast is an element of the gender’s labor distribution between the various industry sectors. For example, a worker can only infrequently telework in mining, construction, or manufacturing. Their means of production have a set location. These industries are heavily dominated by males. Female dominated industries are education and healthcare. The healthcare portion has production limitations restricting teleworking, but education does not. These industry divides are partly where the male-female divide has its explanation.
The other factor to note is that older workers have a higher usage of teleworking than do younger workers. The explanation to this contrast lies in the next chart.
Education plays a significant role in who can and cannot telework. A general theme is the more education one receives, the more likely one’s main work tool is a computer. It takes time to accumulate an education, so one would naturally expect that older workers would have more opportunity to telework than younger workers.
The differences among education levels is striking. The higher a worker’s education, the more teleworking occurs. May gives us the best proxy for the maximum teleworking that the market can support. Seventy percent of those with advanced degrees (Ph.D. and Masters) were able to telework during this most restricted period. That is a sizeable extent of workers.
If there is a concentration of these higher-educated workers, as is the case in the downtown Salt Lake City business district, such an option alerts evaluators that the post-COVID world could have significant lingering impacts upon any major city’s downtown business district. Even out to February, with the lockdowns having lessened, teleworking at this education level is still half of all workers. The accompanying bachelor’s degree workers are also high around 38%. If even half of these percentages do not return to their downtown work environs post-pandemic, that would be a structurally significant employment reduction in metropolitan downtowns. This has the potential to significantly affect the demand for office space and auxiliary industries like restaurants and retail trade.
More than half of bachelor’s degree workers were able to telework. Those with some college or associate’s degree had 25% of their ilk telework, and those with a high school education found teleworking at just a 15% rate. The differences boil down to the work. Is the work centered on computers, or is it centered on customer interaction, locations, or product production? Higher education jobs tend to center more on computers, lower education jobs do not.
The following table focuses upon the major occupational groups and looks at their percentage of teleworking during May, the high point of teleworking, and then the residual amounts still occurring by February. As stated earlier, the percentages are national percentages, but the occupations presented in the chart are based upon Utah employment within those occupational groups. In other words, the occupations are ranked from the highest amount of Utah employment to the lowest.
The blue bars extending the furthest to the right reveal the occupational segments where teleworking is prominent, and by extension, where the higher-educated workers are distributed. Note there is a bunching of far-right blue bars in the occupations toward the chart’s lower half. This illustrates that a significant number of occupational groups with high teleworking and thus high education aspects are in Utah occupational groups with the lower employment quantities. Further logic implies that Utah’s overall rate of teleworking would then be lower than the national average. This can be simulated by applying the national teleworking percentages per occupational group to the Utah employment quantities per occupational group, and then summing. The results are presented in the next chart.
Through the series, Utah’s percent of simulated teleworking is lower than the national average. One difference is that construction is doing very well. It is a prominent industry in Utah and it is a very male dominated industry. We have seen that both the construction and male aspects will lower telecommuting. It is underlying stories like this and others that make the Utah percentages lower. These are not bad stories; they are just stories of difference.
An occupational summary is illuminating in terms of how teleworking has segmented itself down to the individual worker. Industries employ people in their various occupations. The following chart will show how much teleworking is occurring across the various industry groups. This is occupations teleworking within industry sectors.
All industries had some aspect of teleworking, even some that wouldn’t otherwise come to mind. But there are administrative and professional-level jobs in all industry sectors. The industry segment where the least amount of teleworking can occur is accommodation and food services. This is also the industry segment hit the overall hardest by COVID-19.
Teleworking has been the economic saving grace of this pandemic. An economy 30 years ago without the Internet would have collapsed under a mandatory closure. That economy would have been either more dramatically hit, or the hit would have been so pervasive that the economy couldn’t have afforded to close at all. If that was the case, then the pandemic may have become an even bigger scourge. Fortunately, we live in a world with computers and the Internet. They turned out to be the economic savior against a full-blown economic collapse.