By Paul Duggan,
After a year of pandemic-induced upheaval, as employees and bosses wonder about lasting changes to work life, a consultant’s report predicts that when the coronavirus crisis is over, a huge number of people in the Washington region will continue doing their jobs remotely, causing significant pain in some parts of the economy.
“The effects of a moderate to substantial shift to remote work in the Capital Region will not be felt evenly across geography, industry or occupation,” according to the study, released Tuesday by the Greater Washington Partnership, a business alliance.
“While remote-capable workers may benefit from a more flexible work environment,” the report says, “public services, smaller businesses, and restaurant and retail workers who historically relied on regular commuters will be required to adapt to a post-pandemic future of work.”
[Dreading or dreaming of a return to the office in 2021]
The 40-page study by the consulting firm Ernst & Young defines “the Capital Region” as stretching from Richmond to Washington to Baltimore, with 188,000 employers overall, including the federal government, and 5 million workers.
The report says 49 percent of the region’s jobs are considered “remote-capable” for the long term, second only to the percentage in the San Francisco area.
Before the pandemic shutdown began almost a year ago, only about 5 percent of employees in the Washington region worked remotely full time, according to the study, which says that by the end of 2020, nearly 8 out of 10 employees were working remotely at least some of the time.
After examining survey results and other data, Ernst & Young considered two possible post-pandemic scenarios in the region, in which 18 percent or 14 percent of employees continue working remotely from three to five days a week — fewer than do so now but far more than the number who worked remotely before the health emergency.
If pre-pandemic demographics hold true, a majority of those remote workers will be White and employed in high-skill professions, the research shows.
Before the coronavirus, downtown Washington was a textbook example of a once-distressed city center reborn into economic vitality in recent decades. By fall, though, about 95 percent of its 167,000 office employees were working from home.
If a substantial number of them opt to continue the practice indefinitely after the pandemic, the long-term impact on small businesses in urban centers could be devastating, the report says. It says government and corporate leaders, in planning post-pandemic work patterns, should be mindful of the ripple effect on employees in other sectors who cannot work from home and whose livelihoods depend on commuters.
[The pandemic has devastated downtown D.C. Some fear the damage is permanent.]
These leaders “need to consider . . . mitigating the costs that will be more heavily borne by smaller businesses, people of color and non-essential, non-remote workers,” the study says, adding that “equity will need to be at the center of agendas to create an inclusive economy where workers can thrive irrespective of their job, race or neighborhood.”
Schooling is a major issue. While most people in remote-capable jobs have college degrees, the report says, workers who cannot stay at home “generally have lower levels of educational attainment, with 39% holding a bachelor’s degree or above. . . . The disparity is more pronounced for restaurant and retail workers, of which 16% have a college degree.”
These restaurant, retail and entertainment workers would be particularly at risk in a major, long-term shift toward remote employment.
More days working at home “will decrease spending on meals, shopping and entertainment around the workplace,” the study says. “This could disproportionately impact smaller businesses around workplaces” in urban downtowns.
And the study does not foresee “a dollar-for-dollar shift in consumer spending” from, say, downtown restaurants to restaurants in residential areas, close to people’s home offices. “Remote workers may shift to eating self-prepared meals when working at home rather than purchasing meals.”
Small-business owners of color are especially likely to suffer, given their existing problems, the report adds. “Nearly half of all Latinx-owned and almost 60% of Black-owned small businesses nationally were found to have liquidity concerns in 2019 by the Federal Reserve Bank of Atlanta, as compared with only 31% of all small businesses reporting similar levels of financial distress.”
As for public-sector services, the study says, transit systems — especially Metrorail, the busiest system in the region — could face major post-pandemic financial woes if a large percentage of employees continue working remotely.
The consultants reported that 68 percent of subway riders in metropolitan Washington hold remote-capable jobs. After Metrorail ridership nosedived in the pandemic shutdown, the extent to which it will eventually rebound depends on how many of those remote-capable workers return to offices and how many opt not to.
“Buses and cars, on the other hand, are more likely to be used by commuters who cannot conduct their job remotely,” the study says, noting that from Richmond to Baltimore, “only 35 percent of bus commuters have remote-capable jobs.”
The scary issue for those folks is whether their non-remote jobs will be available long term if huge numbers of remote workers continue to stay home.
Read more:
Small businesses in high-rent cities face disaster. If they go under, urban life will change.
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