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Tuesday, February 4, 2014

Why Telecommuting Really Matters, in 6 Charts


By Yonah Freemark, February 4, 2014

 Why Telecommuting Really Matters, in 6 Charts

Over the past 30 years, at the same time the percentage of commuters driving has flatlined, the share of people working from home has exploded, almost doubling since 1980. Telecommuting is controversial — some suggest it increases productivity while others maintain the value of offices — but it is gaining popularity no matter its merits.

How getting from here to there is changing forever.
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More than just affecting the way people work, the increasing ease of telecommuting will dramatically affect the way we adapt our urban transportation systems. Indeed, an increase in working from home might suggest that we have less to fear about the future of traffic congestion than we might have believed.

Since 1980, the share of Americans telecommuting every day has increased from 2.3 percent to 4.4 percent in 2012. The U.S. Census Bureau, moreover, reports that 9.4 percent of people now work from home at least one day a week, up from 7 percent in 1994. (This trend is global; in the United Kingdom, telework increased by 13 percent between 2007 and 2012 and now represents about a tenth of the workforce.)

These national trends mask the changing ways Americans are working from home. The Census notes that while home-based workers were mostly self-employed 30 years ago, they’re now mostly employed by private corporations. That evidence is backed by a comparison between telecommuting trends in rural areas and the nation’s largest cities. Between 1970 and 2010, the share of workers telecommuting in the most agriculturally dependent states declined by more than 50 percent, while it more than doubled in the ten most populous counties. In other words, the profile of telecommuters is becoming more urban.

As you can see in the charts above, based on data from the U.S. Census, telecommuting is increasingly a city phenomenon. Of the 275 U.S. counties with more than 100,000 workers in 2012, 91 percent saw an increase in telecommuting since 1970 — and all counties with more than 300,000 workers saw an increase during that period. This shift has been particularly evident in places such as Boulder, Colorado, which increased its share of working from home from 3.1 percent in 1980 to 11.1 percent in 2012; the Atlanta region’s Cobb and Fulton Counties both increased their share from less than 2 percent to more than 7.5 percent; and exurban counties like Marin, outside of San Francisco, and Loudoun, outside of D.C., increased their shares from less than 4 percent to more than 8 percent. Dense urban areas often saw their shares increase by about 4 percentage points, including Manhattan, King County (Seattle), and San Francisco.

In other words, telecommuting is occurring everywhere in metropolitan areas, from dense cities to their far-flung suburbs. The rise of the Internet is producing more at-home work, but not just, as once believed, by people who want to live far from their workplaces. Many telecommuters are likely only a few miles from their potential offices. What's happening across the country that may explain these changes?

A look at another cross section of Census data, contrasting urban density and the percentage of people with long commutes to work (in large counties across the U.S.), suggests that, at least on average, there's no relationship between those variables and the choice to telecommute. That means that the decision to work from home is not directly influenced by the difficult traffic conditions that workers would otherwise face. Nor, contrary to what we might expect, are people in less dense, exurban communities more likely to work from home than people living in center cities with plenty of jobs nearby.

Two other variables, on the other hand, appear to correlate relatively closely with working from home, at least at the county level. Counties with a higher share of people holding a bachelor's degree or higher are likelier to telecommute, and those with a higher percentage of "professional" workers as classified by the Census exhibit similar trends. (Professional workers include legal services, management, business support, and scientific research, among other occupations.) Other occupational categories have far less of a correlation to telecommuting. It's not the availability of work nearby or the way we get to work that's making us telecommuters — it’s the type of work we’re doing.

Nationally, the share of people holding a bachelor's degree or higher has increased from 10.7 percent in 1970 to 29.1 percent in 2012; the share with some college at all has increased from 21.3 percent to 58.3 percent. Meanwhile, the share of people working in professional occupations has increased from 4.3 percent in 1980 to 10.9 percent in 2012. So the rise in telecommuting is at least partially a consequence of increases in educational achievement, which could imply the share of people working at home will probably continue to rise in the decades to come — and the consequences could be dramatic when it comes to transportation.

Take King County, Washington, which includes Seattle. In 2012, 63,000 people, or about 6 percent of the county’s workforce, worked from home, according to the Census. Taking 63,000 people off the city’s roadways or train system at rush hour could be making a huge difference in terms of congestion relief. As of October 2013, only about 30,000 riders used the region’s light rail system daily. And the 20 highway lanes entering downtown only have the capacity for about 40,000 vehicles per hour.
Seattle, like many other cities, is now investing in the capacity of its transportation system in order to ward off congestion; the state is funding a $2 billion highway tunnel under downtown, and the city is extending light rail in almost every direction. These projects will help fulfill projected increases in peak-hour demand, but could telecommuting make those expansions unnecessary? Given current limitations on funding for transportation infrastructure, planners and politicians have a responsibility to take the rise of telecommuting and the potential for further declines in peak-hour traffic into account as they identify the most effective investments for the future.

All chart data from U.S. Census Bureau.