The California Labor Market is Being Transformed by Remote Work

The COVID-19 pandemic brought about the fastest and most widespread shift in how and where work is done in history. Before 2020, only about 5% of working days were spent at home, but when the pandemic hit, this rate skyrocketed to 60%. Today, US workers spend approximately 27% of their working days at home, reshaping the way we think about commutes, offices, business districts, workplace interactions, and time management. This shift has had a profound impact on both workers and employers, sparking ongoing negotiations about the productivity of remote work.

Hybrid work, a combination of working some days on site and others at home, has become the most common arrangement for remote work. Over 25% of US workers now report engaging in hybrid work, while only 12% work remotely all the time. In California, working from home is even more prevalent than in the rest of the country, with 17% of workers in the state typically working from home compared to 15% of workers in other parts of the US.

According to the PPIC Statewide Survey, 6 in 10 employed Californians express a desire to work from home at least some of the time. While there is conflicting evidence on how remote work impacts productivity and whether some workers require proximity to coworkers to advance, the flexibility of remote work is undeniably appealing to many Californians. This flexibility not only benefits workers but also has the potential to improve labor force participation, as evidenced by the increased employment among women in recent years due to telework opportunities.

Occupations that offer more flexibility for remote work have experienced strong employment growth. While overall employment declined by 2% between 2018-2019 and 2021-2022, occupations where at least half of workers report working from home saw a 12% increase in employment. Software developers, mathematical science occupations, management analysts, and computer hardware engineers are among the occupations that have seen significant growth. On the other hand, occupations with limited remote work options, such as security guards, janitors, chefs, and agricultural workers, have experienced declines in employment.

The shift to remote work has also impacted consumer behavior, with more purchases being made online rather than in-person retail. This shift has led to growth in occupations related to freight and material moving, as well as shipping and receiving, while retail sales clerks and management roles have seen declines.

Despite the significant increase in remote and hybrid work arrangements, the majority of employed Californians still work outside the home. As we navigate this new work landscape, it is crucial to consider the long-term implications and develop policies that support both workers and businesses in this evolving environment. The future of work is changing rapidly, and it is essential to adapt and innovate to ensure a thriving and productive workforce.