The Remote Work Revolution


Although remote work was increasing modestly before the pandemic, we are now enmeshed into what can be fully considered a “remote work revolution. In the United States, the number of people indicating they usually worked at home increased 172% from 2019 to 2022, an increase of more than 14 million. Remote work has been associated with an actual decrease in the number of people commuting by car (down 9 million from 2019 to 2022). This has been accomplished with virtually no public subsidy and contrasts with the hundreds of millions of dollars spent subsidizing transit for more than six decades, with virtually no reduction in in commuting by car. This analysis looks at how work location has changed during the remote work revolution and how important the remote work revolution was to maintaining the nation’s economy.

8 Intensely Urban Cities: Our focus is on the eight US core municipalities that had more than 100,000 inbound transit commuters daily in the last pre- remote work year of 2019. This includes the cities of New York, Los Angeles, Chicago, Philadelphia, San Francisco, Boston, Washington and Seattle. These core cities include the eight largest central business districts (downtowns) in the nation, where the largest number of people work, generally in the highest employment densities.

Between 2019 and 2023, there were job losses in all eight core cities (Figure 1). The largest losses were in New York at 245,000 followed by San Francisco at 181,000, Los Angeles at 152,000 and Washington at 148,000. Philadelphia had by far the smallest job loss, at 5,000 (Figure 1).

There was a large decline in car commuting, as millions of workers switched to remote work. Auto use in New York dropped by a miniscule 4,000. The other cities had had losses between 20,000 and 75,000. The overall loss in driving was about 600,000.

For decades, we have noted that “transit is about downtown.” Most of the transit destinations in the United States are these cities, host to the nation’s largest downtowns. In 2019, the share of transit destinations in the 8 cities was about ten times their share of jobs in the nation. During the remote work revolution, New York lost the most riders at 676,000, 577,000 (85%) of which formerly commuted to Manhattan, home of by far the largest central business district in the United States. Chicago lost 240,000, San Francisco 125,000 and all of the other cities lost as well. Overall there was a 1,699,000 loss in transit commuting to these cities.

All cities gained large numbers of remote workers, led by New York at 448,000 followed by Los Angeles (254,000), Chicago (205,000), Seattle (129,000), San Francisco (112,000) and Philadelphia (107,000).

The 8 Suburban Areas: Remote work is also part of a decentralizing trend outside the core cities. Overall, the suburban areas associated with these core cities (in the metropolitan areas, but outside the core cities), had a gain of 888,000 jobs. They added 1.9 million more jobs than the core cities. Even before the remote work revolution, two-thirds of the employment in these metropolitan areas was in the suburbs (outside the core cities). Even New York, home of the nation’s strongest central business district, now has more 600,000 more jobs in the suburbs than in the core city. New York’s suburban job gain of 295,000 was the largest, and all other suburban areas gained employment except in Los Angeles. There are more suburban jobs than core city jobs in each of the eight metropolitan areas (Figure 2).

Overall suburban remote work increased by 3.25 million, more than double that of the core cities.

The 8 Metropolitan Areas: Among the eight metropolitan areas, there was an overall loss of 156,000 jobs. The automobile commute loss was 5.4 million while the transit commute loss was 2.1 million. The overall gain in remote work was 4.7 million (Figure 3).

The Rest of the Nation: Outside the 8 metropolitan areas, there was a national increase in employment of 3.7 million from 2019 to 2022. This growth was dispersed, as most jobs lost in the most intensely urban cities were offset by employment gains in the suburbs. However, more that 100% of the job growth (3.8 million) was outside the 8 metros with the largest CBDs, in the balance of the nation (Figure 4).

Remote Work and the Economy: Remote work may have literally saved the economy. From March to April 2020, as the pandemic lockdowns were being implemented, total employment in the United States dropped by more than 20 million, according to the St. Louis Federal Reserve Bank. This 13.6% drop in employment was the largest since at least 1939.

Remote work increased materially. Before the remote work revolution (March 1, 2020), WFH Research reports that 7.2% of US work hours were from home. The remote work revolution occurred virtually overnight. By May 1, 2020, WFH Research found that work from home hours had increased to 61.5%. This allowed a far higher level of economic activity to continue than if the technology had not so facilitated remote work. The remote work revolution also speeded the recovery. Within six months (April to October), employment shot up by more than 12 million. This is the largest employment increase (9.2%) in any six-month period on record, according to St. Louis Fed data (Figure 5).

Remote work has declined in market share since the early pandemic. Even so, remote work continues with a market share far above what had been the case in 2019. WFH Research reports that as of January 1, 28.8% of all work hours were at home — four times the 2019 level.

It is to be hoped that the best economic researchers will look closely at the role in job preservation and recovery derived from remote work, without which far greater economic disruption might have occurred. This should be compared to the previous world, in which a remote work revolution could not have occurred, which was only a decade or two ago.

Wendell Cox is principal of Demographia, an international public policy firm located in the St. Louis metropolitan area. He is a founding senior fellow at the Urban Reform Institute, Houston, a Senior Fellow with the Frontier Centre for Public Policy in Winnipeg and a member of the Advisory Board of the Center for Demographics and Policy at Chapman University in Orange, California. He has served as a visiting professor at the Conservatoire National des Arts et Metiers in Paris. His principal interests are economics, poverty alleviation, demographics, urban policy and transport. He is co-author of the annual Demographia International Housing Affordability Survey and author of Demographia World Urban Areas.

Mayor Tom Bradley appointed him to three terms on the Los Angeles County Transportation Commission (1977-1985) and Speaker of the House Newt Gingrich appointed him to the Amtrak Reform Council, to complete the unexpired term of New Jersey Governor Christine Todd Whitman (1999-2002). He is author of War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life and Toward More Prosperous Cities: A Framing Essay on Urban Areas, Transport, Planning and the Dimensions of Sustainability.

Photograph: New York, downtown Brooklyn, Manhattan and New Jersey, Exchange Place. By author