Decade of the Telecommute

telecommute.jpg

The rise in telecommuting is the unmistakable message of the just released 2009 American Community Survey data. The technical term is working at home, however the strong growth in this market is likely driven by telecommuting, as people use information technology and communications technology to perform jobs that used to require being in the office.

In 2009, 1.7 million more employees worked at home than in 2000. This represents a 31% increases in market share, from 3.3 percent to 4.3 percent of all employment. Transit also rose, from 4.6% to 5.0%, an increase of 9% (Note). Even so, single occupant automobile commuting also rose, from 75.7% to 76.1%, despite the huge increase in gasoline prices. The one means of transport that continued to decline was car pooling, which saw its share decline from 12.1% in 2000 to 10.0% in 2009.

The increase in working at home was pervasive in scope. The share of employees working at home rose in every major metropolitan area (over 1,000,000 population), with an average increase of 38%. The largest increase was in Charlotte – ironically a metropolitan area with large scale office development in its urban core – with an 88% increase in the work at home market share. In five metropolitan areas, the increase was between 70% and 80% (Richmond, Tampa-St. Petersburg, Raleigh, Jacksonville and Orlando). Only five metropolitan areas experienced market share increases less than 20% (New Orleans, Salt Lake City, Rochester, Buffalo and Oklahoma City). Nonetheless, the rate of increase in the work at home market share exceeded that of transit in 49 of the 52 major metropolitan areas. Transit's increase was greater only in Washington, Seattle and Nashville (where the transit market share is miniscule).

The working at home market share increase was also strong outside the major metropolitan areas, rising 23%.

Working at home is fast closing the gap with transit. In part driven by the surge in energy prices since earlier in the decade, transit experienced its first increase since data was first collected by the Bureau of the Census in 1960. Yet working at home is growing more rapidly, and closing the gap, from 1.7 million fewer workers than transit in 2000 to only 1.0 million fewer in 2009. At the current rate, more people could be working at home than riding transit by 2017. This is already the case in much of the country outside the New York metropolitan area, which represents a remarkable 39 percent of the nation’s transit commuters. Taking New York out of the picture, 31% more people (1.35 million) worked at home than traveled by transit, more than 4 times the 7% difference in 2000 (Table 1, click for additional information).







Table 1
Transit & Work at Home Share of Commuting
Major Metropolitan Areas: 2000 & 2009
  Transit Work at Home
Metropolitan Area 2000 2009 2000-2009 2000 2009 2000-2009
New York 27.4% 30.5% 11.4% 2.9% 3.9% 32.6%
Los Angeles 5.6% 6.2% 11.6% 3.5% 4.8% 35.3%
Chicago 11.3% 11.5% 2.0% 2.9% 4.0% 37.1%
Dallas-Fort Worth 1.8% 1.5% -13.3% 3.0% 4.1% 37.0%
Philadelphia 8.9% 9.3% 3.7% 2.9% 3.9% 35.0%
Houston 3.2% 2.2% -29.2% 2.5% 3.4% 37.4%
Miami-West Palm Beach 3.2% 3.5% 9.7% 3.1% 4.5% 48.0%
Atlanta 3.4% 3.7% 8.7% 3.5% 5.6% 59.9%
Washington 11.2% 14.1% 26.6% 3.7% 4.5% 22.7%
Boston 11.2% 12.2% 9.8% 3.3% 4.3% 31.9%
Detroit 1.7% 1.6% -4.7% 2.2% 3.1% 40.1%
Phoenix 1.9% 2.3% 17.5% 3.7% 5.3% 44.3%
San Francisco-Oakland 13.8% 14.6% 6.0% 4.3% 6.0% 40.5%
Riverside 1.6% 1.8% 9.0% 3.5% 4.6% 32.6%
Seattle 7.0% 8.7% 25.0% 4.2% 5.1% 23.6%
Minneapolis-St. Paul 4.4% 4.7% 6.4% 3.8% 4.6% 20.6%
San Diego 3.3% 3.1% -7.0% 4.4% 6.6% 50.2%
St. Louis 2.2% 2.5% 14.2% 2.9% 3.5% 22.5%
Tampa-St. Petersburg 1.3% 1.4% 11.0% 3.1% 5.5% 75.7%
Baltimore 5.9% 6.2% 5.8% 3.2% 3.9% 23.2%
Denver 4.4% 4.6% 4.3% 4.6% 6.2% 36.4%
Pittsburgh 5.9% 5.8% -2.9% 2.5% 3.2% 28.5%
Portland 6.3% 6.1% -3.0% 4.6% 6.1% 32.9%
Cincinnati 2.8% 2.4% -13.4% 2.7% 3.8% 40.3%
Sacramento 2.7% 2.7% 0.8% 4.0% 5.4% 33.1%
Cleveland 4.1% 3.8% -8.1% 2.7% 3.4% 25.0%
Orlando 1.6% 1.8% 15.4% 2.9% 4.9% 71.4%
San Antonio 2.7% 2.3% -12.5% 2.6% 3.4% 29.0%
Kansas City 1.2% 1.2% 4.6% 3.5% 4.3% 24.7%
Las Vegas 4.4% 3.2% -26.8% 2.3% 3.3% 45.1%
San Jose 3.4% 3.1% -9.6% 3.1% 4.5% 44.4%
Columbus 2.1% 1.4% -35.0% 3.0% 4.1% 36.7%
Charlotte 1.4% 1.9% 32.2% 2.9% 5.4% 88.1%
Indianapolis 1.3% 1.0% -22.2% 3.0% 3.7% 24.7%
Austin 2.5% 2.8% 11.7% 3.6% 5.9% 64.6%
Norfolk 1.7% 1.4% -17.7% 2.7% 3.4% 27.9%
Providence 2.4% 2.7% 12.8% 2.2% 3.6% 64.5%
Nashville 0.8% 1.2% 38.5% 3.2% 4.3% 34.6%
Milwaukee 4.2% 3.7% -12.5% 2.6% 3.2% 25.3%
Jacksonville 1.3% 1.2% -9.1% 2.3% 4.0% 73.8%
Memphis 1.6% 1.5% -8.1% 2.2% 3.1% 41.3%
Louisville 2.0% 2.4% 20.2% 2.5% 3.1% 22.9%
Richmond 1.9% 2.0% 6.5% 2.7% 4.7% 76.8%
Oklahoma City 0.5% 0.4% -13.0% 2.9% 3.1% 4.7%
Hartford 2.8% 2.8% -1.3% 2.6% 4.0% 53.6%
New Orleans 5.4% 2.7% -50.3% 2.4% 2.9% 19.2%
Birmingham 0.7% 0.7% -2.3% 2.1% 2.7% 29.5%
Salt Lake City 3.3% 3.0% -10.1% 4.0% 4.7% 17.8%
Raleigh 0.9% 1.0% 10.7% 3.5% 6.0% 74.4%
Buffalo 3.3% 3.6% 7.9% 2.1% 2.3% 8.3%
Rochester 2.0% 1.9% -4.3% 2.9% 3.3% 13.7%
Tucson 2.5% 2.5% 1.8% 3.6% 5.0% 36.3%
Total 7.5% 8.0% 6.4% 3.2% 4.4% 37.7%
Other 1.0% 1.2% 12.3% 3.4% 4.2% 23.0%
National Total 4.6% 5.0% 9.2% 3.3% 4.3% 30.9%
Major metropolitan areas: Over 1,000,000 population in 2009
Metropolitan Area definitions as of 2009
Data from 2000 Census and 2009 American Community Survey




The rise of working at home is illustrated by the number of major metropolitan areas in which it now leads transit in market share. In 2000, working at home had a larger market share than transit in 28 of the present 52 major metropolitan areas. By 2009, working at home led transit in 38 major metropolitan areas, up 10 from 2000. Between 2000 and 2009, the working at home market share increased nearly 6 times as much as the transit share in the major metropolitan areas (38.4% compared to 6.4%).

Working at Home Leaps Above Transit In Portland and Elsewhere: Perhaps most surprising is the fact that Portland now has more people working at home than riding transit to work. This is a significant development. Portland is a model "smart growth" having spent at least $5 billion additional on light rail and bus expansions over the last 25 years. Portland was joined by other metropolitan areas Houston, Miami-West Palm Beach, New Orleans and San Jose, all of which have spent heavily on urban rail systems. Working at home also passed transit in Cincinnati, Hartford, Las Vegas, Raleigh and San Antonio (Table 2).


Table 2
Work at Home Share Greater than Transit
Major Metropolitan Areas
Atlanta Houston Norfolk Sacramento
Austin Indianapolis Oklahoma City Salt Lake City
Birmingham Jacksonville Orlando San Antonio
Charlotte Kansas City Phoenix San Digo
Cincinnati Las Vegas Portland San Jose
Columbus Louisville Providence St. Louis
Dallas-Fort Worth Memphis Raleigh Tampa-St. Petersburg
Denver Miami-West Palm Beach Richmond Tucson
Detroit Nashville Riverside
Hartford New Orleans Rochester
Indicates working at home passed transit between 2000 and 2009




Further, the shares are close enough at this point that working at home could surpass n transit in Milwaukee, Cleveland and Minneapolis-St. Paul in the next few years.

Transit: About New York and Downtown

As noted above, transit also has gained during this decade. However, the gains have not been pervasive. Out of the 52 major metropolitan areas, transit gained market share in 29 and lost in 23. As usual, transit was a New York story, as the New York metropolitan area saw its transit work trip market share rise from 27.4% to 30.5%. New York accounted for 47% of the increase in transit use, despite representing only 37% in 2000. New York added nearly 500,000 new transit commuters. This is nearly five times the increase in working at home (106,000). Washington also did well, adding 125,000 transit commuters, followed by Los Angeles at 73,000 and Seattle at 41,000.

Transit's downtown orientation was evident again. This is illustrated by the fact that more than 90% of the increased use in the major metropolitan areas occurred in those metropolitan areas with the 10 largest downtown areas (New York, Los Angeles, Chicago, Philadelphia, Houston, Atlanta, Washington, Boston, San Francisco and Seattle). Among these, only Houston experienced a decline in transit commuting.

Implications

Working at home has been the fastest growing component of commuting for nearly three decades. In 1980, working at home accounted for just 2.3% of commuting, a figure that has nearly doubled to 4.3% in 2009. This has been accomplished with virtually no public investment. Moreover, this seems to have happened without any loss of productivity. Companies like IBM, Jet Blue and many others have switched large numbers of their employees to working at home. These firms, which necessarily seek to provide the best return on their investment for stockholders and owners would not have made these changes if it had interfered with their productivity.

Over the same period, and despite the recent increases, transit's market share has fallen from 6.4% of commuting in 1980 to 5.0% in 2009. At the same time, gross spending over the period rose more than $325 billion (inflation and ridership adjusted) from 1980 levels. Inflation adjusted expenditures per passenger mile have more than doubled since that time.

Given the remarkable rise of telecommuting, its low cost and effectiveness as a means to reduce energy use, perhaps it’s time to apply at least some of our public policy attention to working in cyberspace. It presents a great opportunity, perhaps far greater and far more cost-effective than the current emphasis on new rail transit systems.

----------

Note: Work trip market share reflects transit in its strongest market, trips to and from work. Transit's overall impact, measured by total roadway and transit travel (passenger miles) is approximately 1%, compared to the national work trip market share of 5%.

Wendell Cox is a Visiting Professor, Conservatoire National des Arts et Metiers, Paris and the author of “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life

Photograph: DDFic



















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I am still skeptical of the

I am still skeptical of the long-term shift towards telecommuting. Certainly, ten years from now, more of us will be working "at home." But the real significance behind telecommuting - with respect to the long-term social and economic prosperity of us all - lies within its ability to re-structure land use patterns. A monumental shift would be necessary to do so.

It's easy to extrapolate recent history and assume it continues to gain momentum. I, however, think that most of us underestimate the importance of face-to-face interaction. Yes, telecommuting is an effective cost-cutting approach for larger employers. At some point though, there is a threshold or tipping point that will be self-induced.

I also wonder how much of the telecommuting boom is simply attributed to "self employed" individuals and the retraction of the U.S. and global economies. The Great Recession = more members of the workforce (whom were formerly employed full-time) now resigned to "as needed" duties which do not warrant the costs of providing dedicated work space...so they work from home.

The jury is still out on telecommuting...it still makes up less than 5% of the employment base.

I think you'll find that the

I think you'll find that the efficiency factor dominates. If it's cheaper to telecommute, then that's where competitive forces will drive us. The far-reaching advantages are just too strong; so, in time you will have to telecommute just to compete.

Face to face interactions: A telecommuter can of course still drive to a meeting for the odd times where face-to-face is essential. Another point is that cultures can be very flexible and accommodating, especially in the professional world...we can largely substitute the face-to-face factor in many subtle ways.

Also, the development of video-intercom should evolve so that you do in fact get face-to-face viewing, where you can look at the other guy on the screen like you are looking through a window. It's a bit complex to explain here, but it would take multiple cameras and it can be done. This will help a lot. (But yes - you will never totally substitute the effect of not being there in person).

My point in all this is that we can be pretty certain I believe that telecommuting will only grow more (much more), and probably accelerate in growth too.

Telecommuting

Personally, I see no reason why 90% plus of the commercial world cannot reincarnate itself in cyberspace. Obviously it is far more efficient.

I think you will find that telecommuting will evolve as a system, and you will probably get an economies-of-scale effect too, so that it becomes progressively easier for everyone to be internet-based in their work. The growth could accelerate quite aggressively.

We need ubiquitous, smooth, cheap video-intercom. When everyone's got it, it will accelerate the development of a more comprehensively online-operational world.

If I may be a bit more futuristic, I think we will soon see the development of human-assisted flexible robotics replacing a good deal of manual work as well.

But with all this we open up the door to extreme outsourcing...Will we have to compete with the Chinese for all our jobs? Will it be a capital-owners (only) utopia? Just some thoughts.

High-capacity broadband to the home is one of the keys!

If high-performance broadband, such as the Verizon FIOS product (which delivers fiber-optic speed right to the home in some U.S. states) becomes pervasive, then the need for peak-period commuting should (over time) decline.

Owen McShane, your comment:

But it can give some ammunition to those (such as many Greens) who oppose Telecommuting because it undermines the viability of their precious trains.

Should be of concern. Thus far, in the U.S., I have not heard objections such as those raised by Green groups such as the Sierra Club, but that may be a matter of time.

Green response

Here in NZ they do not normally overtly make the link with competition for transit.
However, some openly oppose Telecommuting on the ground that it is "bad for socialisation" because people need contact with their workmates. One reason Greens give for favouring public transport is that you meet people on buses and trains – actually a reason many avoid transit because you often cannot choose who you meet.

Of course this objection shows they do not understand that most telecommuters do go to the office one or more days a week.

And remote office centre telecommuters actually meet up with their local neighbours - which should please the communitarian greens.

But be prepared.

Owen McShane, Kaiwaka, New Zealand.
Director, Centre for Resource Management Studies.
http://www.rmastudies.org.nz/

Owen McShane, I certainly

Owen McShane,

I certainly agree with your point.

I occasionally take the bus into Wellington CBD. A place to socialise? Hardly! It's hard to even talk to your friend (a known) sitting beside you, because you know you've got all those strangers around honing in on every word that you say (because they've got nothing better to do).

However, it was curious just the other day when a group of us (strangers) waiting at the bus stop all car-pooled into a shuttle-bus to substitute a bus that didn't show up (I'm keeping the story simple). On this scale, and in this situation, it was in fact very 'social'. Alround it had a much more pleasant feeling too - a definitively superior service.

Maybe we should just get rid of those subsidies for buses so that shuttle-buses (and other) can fairly compete(?).

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Working from Home?

I can see that in urban areas it makes some sense to merge "telecommuting" and "working from home" into a single statistic.
But it can give some ammunition to those (such as many Greens) who oppose Telecommuting because it undermines the viability of their precious trains.

I have spent most of my working life working from home but I have never regarded myself as a telecommuter because there has never been anywhere for me to commute to – unless we count the 15 metres I walk to and from the house to the office each day.

Hence many researchers require that a telecommuter works at least one day a week in the office. The Sun Microsystems telecommuters work in the office on average 2.5 days per week.

If we start merging the two classes in rural areas then people will say "but this includes all those farmers who work from home." And they do.

Then of course we have a third group of those who telecommute from remote office centres. They commute to the remote office centre, where they plug in, and then telecommute to their head office downtown or wherever.

I suspect that as the working from home, telecommuting, and remote office centre commuting, all grow to take a larger and more significant market share of all employment patterns we will increasingly count the three varieties, and there may be more variations waiting in the wings. Car pooling Avego style might be about to reverse the failure of regular car pooling.
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Director, Centre for Resource Management Studies.
http://www.rmastudies.org.nz/

I for one would welcome an

I for one would welcome an acceleration of this trend for a number of reasons. The first obvious reason is to avoid my 2 hour daily commute, which basically wears out my vehicles at an accelerated rate ( currently both cars have over 200,000 miles), costs me money in toll fees and fuel, and perhaps more so than anything else means I spend 10 hours a week doing nothing except driving.

Secondly it could also mean having the ability to move to a cheaper more affordable city perhaps in another state where we could afford to buy our own house. That alone is a compelling enough reason.

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