Remote Work Is Crushing Low-Skilled Left Behind in U.S Cities

The pandemic trend of white-collar employees working remotely or fleeing for the suburbs has disproportionately hurt low-skilled workers who stayed behind in deserted neighborhoods.

Now a new study has quantified the impact for millions of consumer-services workers such as hairdressers and waiters who relied on office employees to make a living in big cities before the pandemic. 

In January, low-skilled consumer-services workers in the densest urban areas of the country accounted for almost 60% of hours lost in the U.S. economy, compared with the previous year, according to “The Geography of Remote Work,” a paper published by the National Bureau of Economic Research. And yet they accounted for 41% of the workforce, nationally.

In other words, low-skilled workers in densely populated areas have borne the largest share of the pandemic’s economic fallout, including compared with their rural counterparts, according to the research, which used Census Bureau data. 

“High-skill service workers gain flexibility in their residential choices,” said the paper’s authors, Lukas Althoff of Princeton University, Fabian Eckert of the University of California San Diego, cof Georgetown University and Conor Walsh of Columbia University. “Such changes in residential choices of high-income earners endanger the economic livelihood of low-skill service workers in big cities who depend on local consumer services demand.”

The authors describe the relationship between a city’s population density and the potential for remote work as “striking.” In America’s densest areas, about 45% of local jobs could be done away from the office, representing about 65% of payroll, they found.

©2021 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.