Remote Working Isn’t Going Anywhere, But What Does That Mean For Cities?

Two studies have indicated that remote working is here to stay, but this work arrangement could have a negative impact on the revenue of cities and local businesses.

Despite companies preparing to finally bring workers back into the office, two studies suggest that remote working arrangements will have a long-lasting effect on cities.

According to a paper from researchers at Arizona State University, Virginia Commonwealth University, and the Dallas Federal Reserve, around 75% of the remote working policies that emerged from the pandemic will remain in place in the future.

In fact, the number of remote workers will double from levels seen pre-pandemic according to predictions from economists. While the analysis showed that working from home grew in nearly every industry and demographic group, highly educated workers saw the biggest spike.

While this may be good for employee sentiment, research from the Pew Charitable Trusts showed that the inevitable decrease in commuters will hinder local businesses and cities as a whole.

“Fewer commuters — or workers who commute less often — could translate into a shrinking local revenue base and contribute to long-term fiscal challenges for local governments,” the research stated. 

City governments are preparing for this shift too as has been seen in their five-year budget. 

For example, Philadelphia is predicting a permanent 15% loss of non-resident wage tax. Additionally, San Francisco’s five-year financial plan expects office workers to telecommute at least 15% of the time during the 2025 to 2026 fiscal year.

Companies and governments are trying to identify new methods in bringing workers back in, such as dropping Covid-related restrictions for many and introducing new perks and benefits. However, remote working has proven to not just be a temporary solution, but the outcome of long-awaited workplace change.