Booming Telework Spurs Job Growth in Rural Virginia

Source: Statchat

by James A. Bacon

The Internet, pundits long predicted, would emancipate people from the necessity of living near where they worked. The connectivity provided by cell phones, laptops and broadband would allow people to plug in at home…. or even while lounging by the pool or on the beach. It was a nice fantasy, but telecommuting never lived up to its potential. Far from freeing people to live in the bucolic countryside, the logic of the Knowledge Economy impelled more people to the city. A new theory emerged: that the clustering of knowledge workers led to such huge gains in productivity and innovation that it outweighed any lifestyle benefits to telecommuting long distances. The bigger the labor market, the greater the pull.

Now Hamilton Lombard, a demographer at the University of Virginia’s Demographics Research Group, has been so bold as to suggest the dynamic might be shifting again. New Census Bureau data, he writes in the StatChat blog, suggest that over the past three years “the places Americans chose to live are becoming less connected to where their employer is based.”

What’s different all of a sudden? Perhaps the tighter labor market. Lombard suggests. As certain sectors of the economy experience labor shortages, employees have more bargaining power. He doesn’t say this, but I’ll throw it out there for consideration: Instead of pushing for higher wages, perhaps more people are using that bargaining power for more control over their work-life balance.

Whatever the reason, the impact of the increasing work-from-home phenomenon is potentially profound. Outside of Virginia’s major metro areas themselves, the regions that seem particularly effected are the Shenandoah Valley and the Chesapeake Bay.

Nationally, writes Lombard, the number of Americans who primarily work from home rose by 1.6 million between 2015 and 2018. If telecommuters constituted an industry, they would comprise the fastest-growing one in Virginia. The number doubled between 2000 and 2018 and continues with no sign of let-up. As of 2018, about 6%, or nearly a quarter million Virginians, worked at home. (The numbers do not include mobile workers who might work in their cars, in coworking spaces, or coffee shops.)

Certain occupations better lend themselves to distance working than others. According to Bureau of Labor Statistics numbers cited by Lombard, “management and consulting services” has the highest rate of telecommuting — 25%. Computer systems design follows close behind with nearly 20%, then insurance carriers, and accounting/tax prep/bookkeeping.

Working at home is mainly a white-collar phenomenon. Not surprisingly, among Virginia’s metro areas, the rate of telecommuting takes place in metros with the largest percentage of white collar workers: Charlottesville and Northern Virginia. But telecommuting as a percentage of the local workforce is highest in exurban and rural jurisdictions.

Richmond County — 12.81%
Nelson County — 9.28%
Powhatan County — 9.16%
Westmoreland County — 8.71%
Northampton County — 8.67%

You don’t see a high rate of telecommuting in, say, the coalfield counties of Appalachia. There is a strong link between distance working and the availability of amenities — waterfront and sailing on the Northern Neck (Richmond and Westmoreland Counties) and Eastern Shore (Northampton); the Wintergreen resort (Nelson County).

On the East Coast, telecommuters have tended to move to counties along the Blue Ridge and Atlantic that also attract vacationers and retirees, notes Lombard. The Asheville metro in North Carolina’s Blue Ridge,  has the fifth highest share of telecommuters among all U.S. metros.

The rise in telework in Virginia’s rural counties, says Lombard, has brought numerous benefits.

Teleworkers have typically helped diversify rural counties since teleworkers are more likely to work in industries that are underrepresented in rural areas. Teleworkers also on average earn more than most workers who live in rural counties, helping boost their community’s overall income. Though teleworking has accounted for a third of job growth outside Virginia’s three largest metro areas since 2000, its role in rural job creation has gone mostly unnoticed. In Virginia’s non-metro counties, teleworking accounted for nearly 90 percent of job growth during this period.

Let me repeat the last sentence for emphasis: “In Virginia’s non-metro counties, teleworking accounted for nearly 90 percent of job growth during this period.”

The telework trend buttresses the need to invest in rural broadband infrastructure, says Lombard. Just as postwar investment in the Interstate highway system supported the growth of the suburbs and the Sunbelt, investment in broadband and improved transportation will give employees the ability to work remotely and travel to the office when necessary.

“While it would be bold to predict that the internet will have the same impact on where Americans live as the interstate highway system did,” he says, “the demographic impact of the internet will likely grow more visible as the 2020s progress.”

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15 responses to “Booming Telework Spurs Job Growth in Rural Virginia

  1. I’m going to telework Monday and stay away from the crowds on Capitol Hill! I’m told just about everybody in the SunTrust building across Main St. has been told the same thing, with the added incentive that the parking deck will be closed. Yes, employees have figured out that a flexible telework schedule is better than a raise, with all the time and money it saves. But really it is the bosses who are finally getting comfortable that they can 1) reach the employee when needed, 2) including face to face in an internet meeting and 3) monitor the work flow. ‘Tis a revolution.

    • Does labor law pose any obstacles to the expansion of telework? I see so many labor bills in the state legislature I have lost track of them, and maybe they will create traps for unwary employers — and harm workers who want flexible work, the way California’s AB5 is massively backfiring on workers.

      • AB5 is about independent contractors versus employees and the benefits that employees would get compared to the benefits independent contractors would not.

        Which is a big issue with the Gig Economy AND telework.

        Independent contractors, for instance, typically do not get health insurance nor a pension and they have to pay their own FICA tax – all of it.

        I suppose one could take the view that a law requiring independent contractors be employees unless the business could demonstrate they are not employees but are, in fact, independent contractors COULD be viewed as bad for workers if companies decided the restrictions convinced them to not hire people when they would if they could classify them as independent contractors.

        I’m not convinced that companies would actually do that, myself.

        Companies these days are basically trying to shed full time employees who would get health insurance and pensions – and replace them with part time and independent contractors – to save money – to make their products and services more competitive in price.

        It’s a big deal with the rideshare companies but many other companies are also seeking to be able to classify their employees as independent contractors.

        Fed Ex is currently trying to do that while UPS is unionized.

        It’s basically an attempt to lower wages by lowering benefits.

        The actual wage of many employees is not just their salary but their salary plus their health insurance and pension. And it’s no small thing because now days health insurance can be $12,000 a year and it’s actually almost twice that much in value because the Federal Government essentially subsidizes health insurance by not taxing the money spent on it – not Federal income tax, not FICA and not State tax. That amounts to about a 40% discount for many people.

        So the companies that want to reclassify, shed these costs and the independent contractor has to buy their own insurance. Without ObamaCare, most of them may not even be able to if they are older and/or have health conditions or their family does.

        So some say, California will lose jobs if employers are not allowed to reclassify. Others say , this is a race to the bottom for workers and a way for employers to not pay for health insurance, pensions NOR FICA tax AND the workers cannot unionize.

        Is this good for the country? Is this what we have to do to compete against other countries?

        I don’t think enough people really understand this issue right now but my bet is, if they do, they’re going to side with California.

        They’re going to want to protect workers but in todays environment the reality is that those on the right will oppose what California is doing and those on the left will defend it.

        It’s also a big issue for telework though, no question but suspect,
        again, most are clueless about the pros and cons of it.

  2. Excellent post. I was among the first teleworkers for IBM in 1994. At that time, IBM promoted this practice and saved several hundred million dollars in Real Estate expenses, which was really the driving force for the move, along with the touted “work life balance.” I was in Sales and loved the flexibility.

    Subsequently, with the onset and craze contained in “Design Thinking” (see – https://hbr.org/2015/09/design-thinking-comes-of-age) the trend reversed and many tech companies led the move back to co-locating employees within specific buildings so that they could collaborate and co-design together.

    It would seem this is skills and industry specific (specifically white collar – all you need is an internet connection and a telephone and maybe a printer), but I was fortunate enough to be able to participate in this type of work before the trend reversed itself. So, the lack of bandwidth in rural areas is going to be an impediment for flourishing in this environment.

  3. I agree that tele-work is still evolving and may well be similar to the so-called “dot-com” failure which was more of a speed-bump than the end of the line.

    The faster the internet, the more you can do – the more data you can move and the more you can, for instance, “attend” a meeting with not only your voice but your image…AND the ability from your home to provide and view media materials used in the meeting.

    The more secure the internet, the more sensitive information can be possessed remotely.

    I can cite two instances that I have personal knowledge of.

    A child psychiatrist retired from UVA and to a farm in Nelson County – far up a hollow surrounded by mountains. He decided he would top off his retirement income with a telework job from Kansas – assessing and recommending treatment for kids who needed his expertise. They were willing to pay not only for him but for the cellular connection that he had to use to communicate with them.

    Next, a govt contractor on an important Defense weapon of which he had years of knowledge and expertise but was sick and tired of the daily grunge up I-95. Details for how it needed to work – were worked out, including the security and he now enjoys life in an old mill in rural Virginia.

    Rural medicine is now remote doctors.

    internet-powered education , et al you_tube is now exploding . any child can take any course she wants or needs IF they got a good Internet connection, if not at home – down at a nearby internet-connected Library or Community Center.

    I predict, this is just the beginning… and the field is actually relatively young in it’s evolution and now starting to accelerate.

    I think part of the problem is the stultifying “culture” of “management”. Some bosses and some businesses are incapable of effective management unless they can actually look over your shoulder and not trust that you can and will produce. That’s changing.

  4. Too many places in virginia have insufficient broadband

  5. Sometimes Jim Bacon astounds. Take this:

    Now Hamilton Lombard, a demographer at the University of Virginia’s Demographics Research Group, has been so BOLD as to suggest the dynamic might be shifting again. New Census Bureau data, he writes in the StatChat blog, suggest that over the past three years “the places Americans chose to live are becoming less connected to where their employer is based.”

    Do you read your own blog, Jim?

    • Hamilton’s work confirms — and fleshes out — some of the rural trends that you and I have been talking about. But I do confess to being surprised by the extent to which telework is making accelerating inroads in rural and small metro jurisdictions. You, in particular, been talking about the coming renaissance of the Shenandoah Valley and Eastern Shore, but you haven’t provided a statistical underpinning for your predictions. Now we have some hard numbers to work with.

      • Jim, what you say has truth.

        But in the world I live in and its people, these “trends” are so deeply ingrained and ubiquitous as to be beyond dispute, much less news. So as to be so “bold” as to substantiate them is akin to the fish that abruptly, at the end of the aquatic creature’s life, discovers water.

        There is another similar story at work here, that of the fantastic code breakers in World War 11, geniuses all, magnificent in their work and value, stuff like America’s victory at Midway, yet their focus on occasion was so narrowly concentrated, they’d miss enemy attacks that would have otherwise come to their attention has they read the morning paper.

        Today’s modern world seems flooded with these limitations on the knowledge and range of the grasp of so called “experts,” particularly those in academia.

      • The one thing, perhaps not well recognized is for the worker – especially younger ones – perhaps with families – Do they want to live
        out in the boodocks without good shopping and other services like good medical or good repair services?

        I know another couple that moved to Mora, NM. Check the map.

        Once a month, they make a food run to Las Vegas, not a horrible distance but still more than an hour round trip.

        He was retired. She taught Medical Coding.. and flew out of Albuquerque, New Mexico.

        THEIR “internet” was that the telephone junction station was one mile away and because it was – they could get DSL.

        More and more, the VALUE of land is tied to it’s proximity to, not only roads, and other infrastructure, but broadband.

        Is it the job of Govt, or more precisely , WHY is it the duty of govt to ensure that rural has broadband?

  6. The Distributed Design Group of Austin is focused on the development of a labor cluster mapping tool with the intent of demonstrating how a secure network of enterprise centers, located strategically across the extended metropolitan area and using the breadth of immersive technologies, will expand access to jobs while specifically reducing congestion at key choke points. The network can be rapidly extended to more rural communities as the network of major employers grows, and each center is designed for the needs of the local community where it is located. Some centers might have distance learning classrooms, remote clinics, and workforce development. Some communities may need daycare and after school programs. Enterprise Centers are the new train station or highway access ramp. The tools to change our built environment are here today, we only need the courage and public will to invest in the necessary R&D in distributed design programs.

    • Now, that is real good news, a potential game changer like the prospect of blueberrys all year round in SW Virginia, and in Shenandoah Valley too. Go rural and small town and small city Virginia, Go!

  7. but you know……………. it takes big bad nasty, wasteful, corrupt government to make this work, right?

  8. You repeated one sentence for emphasis; let me repeat the next: “The telework trend buttresses the need to invest in rural broadband infrastructure.” Yes, yes, yes — especially in those low density, overlooked counties along the Bay that are already experiencing this kind of growth. Take note, Mathews County Broadband Task Force.

  9. When I pay my home internet, cell phone and husband’s aircard bill this month I’ll pay an extra $90 for the 6GB I bought after running out of data in December. I did final grading for the fall semester from home and used up our allotment more than 2 weeks before it was to be renewed. We spent several frustrating weeks dealing with Safe Mode service on these devices – having trouble even reading email. I bought the extra a bit at a time and it never lasted 24 hours. Until service improves, there’s no way for anyone in my area to telework. Rural areas have to have dependable, affordable service or folks will do what I’ll do on tomorrow’s holiday, go to the office to work when I could and would prefer to work from home.

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