Remote work won’t save your heart
Hope persists that an explosion of outsourcing of tech companies and remote workers will revitalize the American heart. Recent location announcements by companies like Google and Apple have sparked optimism, amplified by a constant stream of articles about tech workers fleeing the shores. Maybe the remote working and movement brought on by the pandemic is really are will redistribute economic vitality more equitably across the country after a decade of excessive concentration in coastal “superstar” cities.
Or maybe not: While some aspects of the history of corporate relocation may be real, new evidence raises questions about the true potential of the remote work-focused renewal story.
On the business side, business announcements and news reports continue to track what appears to be a slight increase in trips from the Bay Area and other tech companies from major cities to non-coastal areas. It’s important to note, however, that many of these appear to involve relocating or investing in existing secondary tech hubs, such as the North Carolina Research Triangle (where Google and Apple are opening engineering hubs) or Austin, Texas (where Tesla is building a manufacturing facility) rather than really new places, not to mention areas in distress. Places like Denver and Nashville, Tennessee, have also seen the arrival of tech companies from the shores.
Such measures are probably generally a good thing for the country’s imbalanced tech economy. To be sure, newcomers could weigh more heavily on already tight housing and labor markets. Yet even so, too much of the country’s top-tier economic activity remains stuck in a short list of coastal “superstar” cities. The nation needs more dynamic regional technology centers.
On the worker side, however, the current narrative is that the widespread shift to remote working amid the COVID-19 pandemic has created a massive pool of footless workers who are quickly leaving major coastal tech hubs and heading to the world. heart, where they stimulate the domestic economy. Many anecdotes and commentators have pushed this story over the past 15 months.
However, the numbers don’t really add up. An April CBRE analysis of migration patterns – based on frequently updated data from the U.S. Postal Service – indicated that while the outflow of people from dense and expensive urban metropolitan areas accelerated in 2020, the flows were rather modest in most cases (with the exception of the Bay Area, New York and Seattle). In addition, most of the travel was over short to moderate distances, often to neighboring counties, not inland.
To dig deeper, we used data from CBRE to more specifically examine the movements of metro San Francisco and San Jose, Calif., To the heart, as defined by “State of the Heartland: Factbook 2018,” a product spouse of Brookings and the Walton Family Foundation. Through this analysis, we found that in 2020 there was a gross total of 700,000 outbound trips from the Bay Area, but only 12,000 address changes were filed for trips from the Bay Area. bay to the 19 classic heart states. These 12,000 moves do not seem sufficient to significantly revitalize the region.
We also looked at departures from New York, Los Angeles, Washington DC, and Seattle. Even after adding the Mountain West states to the list of core destination states, the gross total emigration to the core stands at just 198,000, out of 4.7 million movements out of these metropolitan areas.
To put this into perspective, the 198,000 inbound gross movers from coastal metropolitan “superstars” areas make up less than 0.2% of the 125 million central and western mountain population – again, not enough people. to significantly revitalize the nation’s massive interior and its challenges small towns and cities. And even those modest gains could be eroded or wiped out altogether by continued exits from Heart and Mountain West to superstar metropolitan areas, including workers who only moved temporarily and are now returning to the shores.
This analysis is not the only data to argue against a major turnaround due to migration. Remote work is declining rapidly as more businesses and workers prioritize at least some of the work in the office each week. To be precise, last month’s employment report showed that the share of U.S. executives and professionals telecommuting or working from home due to the pandemic had fallen from 57% in May 2020 to just 30% in May 2021.
This suggests that for all the talk about new working models and possible offshoring for millions of professional workers, fewer and fewer will be completely free in the years to come, as remote working takes hold to a new level. level that will be higher than the pre-pandemic standard. but lower than today.
All this to say that most central cities should not hold their breath for the rapid and migration-induced turnarounds generated by the arrival of new technological workers or professionals from the coast.
Certainly, some of the country’s established secondary technology hubs (Austin, Denver, the Research Triangle) or smaller, already vibrant centers (Cleveland; Boise, Idaho; Madison, Wisconsin; Jackson, Mississippi) could benefit from some of the benefits of corporate outsourcing. companies and workers. However, this will not be the case for the vast majority of places.
Given this, “pull” strategies appear to be a long way for places most in need of growth as the pandemic abates and remote working declines. Instead, communities across the country should focus on the kind of grassroots blockage and struggle that will lead to more robust overall growth and a better quality of life for residents. This includes the more difficult work of building genuine growth areas; develop a skilled and diverse digital workforce; the deployment of robust transport infrastructure for local residents; and adopt policies that support workers and their families, such as investments in education, accessible child care, and universal paid sick and family leave. New federal policies better suited to location and location-conscious would also help, such as creating large regional technology centers in new locations, or new investments in Historically Black Colleges and Universities (HBCUs) and institutions serving women. minorities (MSI)).
In short, it does not appear that the explosion of remote work will magically transform the interior of the nation. Instead, regional leaders will need to continue to make the kind of conscious, long-term investments that have long been the engines of local economic growth and high living standards.