With coronavirus unemployment benefits set to end, remote work divides workers

Minimum Wage, Maximum Exposure

How Remote Work Divides America

With government benefits set to expire at the end of July, new studies show that workers who were struggling financially before the pandemic face returning to jobs that require close personal contact.

The shock of the pandemic has spared no one, but the costs have not been evenly distributed. Office workers who can telecommute have generally been able to retain their income, while many blue-collar workers who have to be on site to work are among the tens of millions of Americans who lost their jobs as the country went into lockdown.

Now, as states struggle with lifting shelter-in-place rules that would allow the most economically vulnerable to return to work, new research shows that people in low-wage jobs are more likely to work in close proximity to other people, and thus face increased risks of exposure to the novel coronavirus than people in high-paying jobs.

New normals

When the pandemic shut down the campus at the University of Chicago, economists Jonathan I. Dingel and Brent Neiman had to pivot to teaching remotely. Stuck at home learning to navigate Zoom, they wondered how many other people were experiencing the same upheaval. Their curiosity led them to collaborate on a paper for the first time: “How Many Jobs Can be Done at Home?”

Their analysis became a launching point for two other economists at the university, Simon Mongey and Alexander Weinberg, who worked with Federal Reserve Bank of New York economist Laura Pilossoph to explore the broader economic impact of the pandemic and draw a picture of the types of workers who would struggle the most.

Collectively, their research proves with data much of what had been known only anecdotally: the disparate experiences of different classes of workers during the pandemic depended on their ability to work from home.

Working in-person and close to others

Under age 50

100%

80

More likely that a worker is

UNABLE TO WORK REMOTELY

40

Male

Single

60

80

100%

In debt,

Living paycheck-

to-paycheck

No college

degree

100%

100%

80

40

40

No employer

healthcare

Earns below

median wage

Rents

home

Works for

small firm

60

60

80

80

100%

100%

Working in-person

and close to others

More likely that a worker is

UNABLE TO WORK REMOTELY

Under

age 50

No college

degree

69%

65.3%

44.9%

46.7%

35.0%

48.9%

Single

Male

Rents

home

Works for

small firm

In debt,

Living paycheck-

to-paycheck

68.3%

50.1%

52.8%

No employer

healthcare

Earns below

median wage

Working in-person and close to others

Under age 50

100%

80

More likely that a worker is

UNABLE TO WORK REMOTELY

WORKING IN CLOSE CONTACT

40

Male

Single

60

80

100%

In debt,

Living paycheck-

to-paycheck

No college

degree

100%

100%

80

40

40

No employer

healthcare

Earns below

median wage

Rents

home

Works for

small firm

60

60

80

80

100%

100%

Working in-person

and close to others

More likely that a worker is

UNABLE TO WORK REMOTELY

WORKING IN CLOSE CONTACT

Under

age 50

No college

degree

69%

65.3%

44.9%

46.7%

35.0%

48.9%

Single

Male

Rents

home

Works for

small firm

In debt,

Living paycheck-

to-paycheck

68.3%

50.1%

52.8%

No employer

healthcare

Earns below

median wage

For men under 50 without college degrees who are in debt and living paycheck to paycheck, there is a correlation between not being able to work remotely and jobs that require close personal contact.

As businesses across the country begin to reopen, 81 percent of American adults are “very” or “somewhat” concerned about the spread of COVID-19, according to the latest Reuters/Ipsos poll.

The U.S. Senate will this week begin to debate a fifth coronavirus-response bill. Mongey says their analysis points to the need for continued financial aid for workers who are disproportionately at risk of infection in the future and exposed to unemployment now.

A tale of two workforces

To find out how many people have actually been able to work from home in spite of the lockdowns, Dingel and Neiman compared surveys about work from the O*NET database against government measures, along with metropolitan statistical area data to determine the prevalence of jobs by area and within industries.

They found that 37% of jobs in the United States can feasibly be performed at home. These jobs typically pay more than work that cannot be done from home, and account for 46% of all U.S. wages. They include most office jobs, such as those in finance, corporate management, and professional and scientific services.

The 63% of jobs that cannot easily be performed from home are concentrated in traditional blue-collar sectors, such as agriculture, construction, food preparation, manufacturing and transportation. These jobs tend to pay lower wages, and employees have to be on site and work in close proximity to others, the study found.

With the exception of essential workers, large swaths of these types of workers have filed for unemployment, according to June 2020 data.

Same pandemic, different struggles

Both studies highlight the split between two broad classifications of jobs: those in consumer services and production versus those in professional, management and technology services.

Industry group

Health

support

CONSUMER SERVICES,

PRODUCTION

Health

technicians

Personal

care

PROFESSIONAL, MANAGEMENT,

TECHNOLOGY

Food

prep

ESSENTIAL WORKERS

Protection

Education

Construction

Sales

Repair

Installation

Community

Moving

Transportation

Production

Entertainment/Media

Building

maintenance

Office Admin

Computer

Agriculture

Legal

Business

Management

Science

Engineering

Likelihood of

close contact

HIGH

HIGH

LOW

Likelihood of

in person work

LOW

Industry group

CONSUMER SERVICES, PRODUCTION

PROFESSIONAL, MANAGEMENT, TECHNOLOGY

ESSENTIAL WORKERS

Likelihood of close contact

Agriculture

LOW

Building

maintenance

Likelihood of

in person work

Production

LOW

Transportation

HIGH

Moving

Repair

Installation

Construction

Protection

Food prep

Personal care

Health

support

HIGH

Health

technicians

Education

Sales

Computer

Community

Entertainment/Media

Office Admin

Science

Engineering

Business

Management

Professional, management and technology jobs run the gamut from accountants and architects to lawyers, insurance underwriters and web developers. This group is much more likely to retain the privilege of collecting a paycheck while working remotely, and is based in major metropolitan areas, like New York and Los Angeles.

Share of jobs that can be done at home

55%

URBAN

San Jose-Sunnyvale-

Santa Clara, CA

50

Washington-Arlington-

Alexandria, DC-VA-MD-WV

New York-

Newark-Jersey City

NY-NJ-PA

45

40

Los Angeles-Long

Beach-Anaheim, CA

35

30

25

20

15

20,000

100,000

200,000

500,000

1 million

2 million

10 million

Total employment by metropolitan statistical area

Share of jobs that can be done at home

55%

URBAN

50

45

40

35

30

New York-

Newark-Jersey City

NY-NJ-PA

25

20

15

20,000

500,000

10 million

Total employment by

metropolitan statistical area

Share of jobs that can be done at home

55%

50

45

40

35

30

Cape Coral-

Fort Myers, FL

25

Elkhart-Goshen, IN

Gadsen, AL

Dalton, GA

20

The Villages, FL

RURAL

15

20,000

100,000

200,000

500,000

1 million

2 million

10 million

Total employment by metropolitan statistical area

Share of jobs that can be done at home

55%

50

45

40

35

30

25

20

RURAL

15

The Villages, FL

20,000

500,000

10 million

Total employment by

metropolitan statistical area

Roughly 90% of cities, however, have workforces with less than half-a-million people and jobs that are not conducive to remote work.

Services and production jobs include those in farm, fish and forestry, personal care and protection. Rural communities such as Lancaster in Pennsylvania or Cape Coral-Fort Myers in Florida have the lowest percentage of jobs that can be done from home.

The Employment Picture

When sorting through jobs data, the University of Chicago researchers looked at employment rather than unemployment figures, which tend to be noisier and difficult to compare. For instance, in the May jobs report, the U.S. Labor Department said the unemployment rate was 13.3% but would have been higher if not for “misclassification error.”

With the exception of essential workers, large swaths of service sector workers have filed for unemployment, according to June 2020 data.

Who lost jobs

People who worked in close proximity to others were more likely to lose their jobs as a result of shelter-in-place policies.

Change in

employment,

February- April

Likelihood of

close contact

Industry group

-70%

CONSUMER SERVICES,

PRODUCTION

-20%

PROFESSIONAL,

MANAGEMENT, TECHNOLOGY

HIGH

-5%

ESSENTIAL WORKERS

+2%

LOW

Agriculture

Building, Maintenance

Production

Transportation

Moving

Repair, Installation

Construction

Protection

Food preparation

Personal care

Health support

Health technician

Education

Sales

Community

Entertainment, Media

Office, Administration

Computer

Engineering

Science

Management

Business

Legal

Industry group

Change in

employment,

February- April

CONSUMER SERVICES,

PRODUCTION

PROFESSIONAL,

MANAGEMENT, TECH

-70%

ESSENTIAL WORKERS

-20%

-5%

Likelihood of

close contact

+2%

LOW

Agriculture

Building, Maintenance

Production

Transportation

Moving

Repair, Installation

Construction

HIGH

Protection

Food preparation

Personal care

Health support

Health technician

Education

Sales

Community

Entertainment, Media

Office, Administration

Computer

Engineering

Science

Management

Business

Legal

The United States passed the nearly $3 trillion Coronavirus Aid, Relief and Economic Security Act in March, the country’s largest-ever economic stimulus package, to help Americans financially impacted by the pandemic. The CARES Act added $600 a week to unemployment benefits, though that federal aid is due to expire at the end of July.

The Trump administration and lawmakers are considering another stimulus package to extend unemployment benefits, but Mongey said he has not heard enough discussion of what would happen if workers don’t want to return to work until they feel safe.

Some businesses have said that if employees balk at returning to work, they will be treated as resignations - which would make it difficult for the employee to claim unemployment benefits. Some states including Alabama, Ohio, Oklahoma and South Carolina have told workers they cannot continue to claim unemployment if they are called back to work or turn down job offers.

“Converting a layoff into a quit,” Mongey told Reuters, “is a big deal when you come to unemployment and health benefits.”

Sources

“How Many Jobs Can be Done at Home?” by Jonathan I. Dingel and Brent Neiman, University of Chicago, Booth School of Business, NBER, and CEPR; “Which workers bear the burden of social distancing policies” by Simon Mongey and Alex Weinberg, University of Chicago, The Becker Friedman Institute for Economics, and Laura Pilossoph, Federal Reserve Bank of New York

Editing by Tiffany Wu and Matthew Weber