Leading Indicators

Remote Working in Philadelphia

This Leading Indicator looks at how remote work in Philadelphia has changed before and after the COVID-19 pandemic. We use the latest estimates from the U.S. Census Bureau’s 2021 American Community Survey (ACS) to dig deeper into what remote work looks like across different demographic groups and industry sectors in Philadelphia since 2019.

 

What You Need to Know

  • In 2021, remote workers in Philadelphia accounted for 23.8% of the total employed population compared to only 5% in 2019.

  • Among the 20 largest U.S. cities, the average proportion of remote workers jumped from 6.4% in 2019 to 26.2% in 2021.

  • Philadelphia saw a slightly higher increase in female employees shifting to remote work, increasing from 5.3% in 2019 to 24% in 2021, compared to male remote workers whose share increased from 4.2% to 21.1% over the same period. 

  • Higher income workers in Philadelphia saw a much larger jump in shifting to remote work compared to low-wage earners. In 2021, almost 30% of Philadelphia residents earning more than $65,000 shifted to remote work compared to 6% of residents who earned less than $15,000.

  • Office-based occupations, like Management and Sales, experienced a larger shift to remote work in 2021 at 40% and 21% respectively. Blue-collar jobs in the Service, Construction, and Transportation sectors only saw 10% of their total employment shift to remote work.

  • From 2019 to 2021, Philadelphia’s workers of color experienced the lowest shift to remote work, with Black and Hispanic workers seeing a 14.2 and 13.1 percentage point increase, respectively, in their proportion of remote workers. Philadelphia’s Asian workers saw a 16.5 percentage point increase while white workers saw the largest increase at 28.3 percentage points.

 

Change in the Overall Remote Working Population

Figure 1 shows the proportion of remote workers out of the total employed population in 2019 and 2021 for 20 largest cities in the nation. Because of the COVID-19 pandemic, the average proportion of remote workers in the 20 largest U.S. cities increased from 6.4% in 2019 to 26.2% in 2021. Some large cities, like San Jose, Seattle, San Francisco, and Washington D.C. saw a dramatic increase in their remote working population in 2021; the proportion of resident workers shifting to remote work in these cities increased by more than 30%. On the other end of the spectrum, cities with the lowest remote working population in 2019, like Indianapolis, San Antonio, and Houston, experienced a modest increase in remote work by 2021.

 

FIGURE 1 

Source: U.S. Census Bureau’s 2019 and 2021 American Community Survey one-year estimates.

 

Compared to the 20 largest U.S. cities, Philadelphia saw a significant increase in remote work despite having the sixth lowest remote working population in 2019. Just before the pandemic, remote workers accounted for roughly 5% of the total employed population in Philadelphia. By 2021, the proportion of remote workers jumped by 19 percentage points to 23.8%. This means that almost one quarter of total workers in Philadelphia were working remotely in 2021 even after the pandemic’s lockdowns were lifted [1]. This trend also continued despite recent demands from employers for in-person work [2]. Overall of the 20 largest U.S. cities, Philadelphia experienced the eighth highest proportional increase in remote work between 2019 and 2021.

A key takeaway from Figure 1 is that working norms have become more dependent on the economic landscape of cities since the pandemic. In 2019, the proportion of the total employed population working remotely was very similar among all cities in our panel. However, we see a large variation in remote working populations in 2021. This implies a potential shift in the norms of in-person work which used to be more universal but have become more dependent on the economic context of each city [3].

 

Who is Working Remotely in Philadelphia?

Remote work is not evenly experienced across demographic groups or industry sectors in Philadelphia. Figure 2 breaks down remote work proportions across demographic and income groups in Philadelphia in 2019 and 2021. Each figure depicts the proportion of remote workers out of total employed workers within the specific demographic or economic grouping in both 2019 and 2021. As expected, the proportion of remote workers increased across all categories from 2019 to 2021 because of the pandemic, however, the rate of remote work uptake varied across groups.

 

FIGURE 2 

Source: U.S. Census Bureau’s 2019 and 2021 American Community Survey one-year estimates.

 

From 2019 to 2021, remote working increased by more than 16 percentage points among both male and female workers in Philadelphia, with the proportion of female remote workers increasing from 5.3% to 24% and the proportion of male remote workers increasing from 4.2% to 21.1%. Remote working among females remains higher than males for several reasons, including the fact that women are more burdened with the unpaid labor of family and household caregiving, which can be more manageable with remote work [4]. To fulfill these paid and unpaid obligations, working parents and caregivers will often prioritize remote work career opportunities over in-office work [5].

 

Looking at remote work across different income brackets revealed that higher income earners saw a much larger jump in remote working when compared to low-wage earners. For example, 30% of Philadelphia’s total employed residents earning more than $65,000 shifted to remote work in 2021 compared to roughly 5% in 2019. On the other end of the income bracket, Philadelphia workers earning less than $15,000 saw a more modest shift to remote work from roughly 2.5% in 2019 to 6% in 2021. These numbers correspond to the higher degree of in-person work required of many low-wage jobs, especially in the service sector [6], compared to many higher-wage office jobs that have greater flexibility for remote work. Figure 2 provides further evidence of this trend when we break down remote work by occupational and industry categories. Almost 40% of residents working in Management occupations shifted to remote work in 2021 compared to roughly 7% in 2019. Similarly, 21% of Sales and Office workers shifted to remote work in 2021 from 4.5% in 2019. Service, Transportation, and Construction occupations, on the other hand, saw 10% or less of their employees shifting to remote work in 2021.  

 

Across racial and ethnic groups, Philadelphia’s workers of color had the smallest increases in remote work, with Black and Hispanic workers seeing a roughly 13 to 24 percentage point increase in their proportion of remote workers from 2019 to 2021. Asian workers followed with the second highest increase in their proportional shift to remote work from 5% in 2019 to 21.5% in 2021. While Philadelphia’s white workers showed the largest shift to remote work with a 28.3 percentage point increase from 6.4% in 2019 to 34.7% in 2021. This variation in remote work across Philadelphia’s racial and ethnic groups correlates with structural barriers that disproportionately bar workers of color to front-line, lower-wage service sector jobs [6], which allow fewer opportunities for remote working.  

 

As we analyze these remote work trends in Philadelphia, it is important to highlight growing speculation around increased inter-city migration among remote workers. A current hypothesis is that many remote workers saw an opportunity to maximize their pay by moving to cities with lower costs-of-living but retaining their former jobs in higher-cost cities. This means that the Great Resignation, or the recent wave of voluntary resignations among employees seeking more flexible working conditions and higher pay, also prompted a reshuffling of workers to lower cost-of-living locations [7]. Since living costs have been historically lower in Philadelphia when compared to many other large U.S. cities [8], it is possible that at least some share of Philadelphia’s remote working population in Figure 1 are residing in the city but working for non-city-based or city-adjacent companies. While it is difficult to track the exact locations of residents’ employment, we did look at recent migration patterns (see Figure 3) for Philadelphia since 2006 and saw a slight uptick in recent migrations from outside the Commonwealth of Pennsylvania. Figure 3 shows residents who moved to Philadelphia from a different county, state, and abroad between 2006 and 2021. The average annual growth rate of out-of-state residents coming to Philadelphia remained at 3.4% between 2006 and 2019. However, this number has increased to 12.9% since 2019. This means that the rate of migration for out-of-state residents to Philadelphia has increased by 3.8 times over the last two years. This uptick in out-of-state migration amidst the pandemic might support the overarching hypothesis that Philadelphia’s lower cost-of-living attracted many remote workers from other parts of the county – although it is not conclusive. As more data becomes available, we will look more closely at this trend.

 

FIGURE 3 

Source: U.S. Census Bureau’s 2006 through 2021 American Community Survey one-year estimates. Note: The figure does not include 2020 one-year ACS estimates as they were not released by the U.S. Census Bureau.

 

Takeaway

Philadelphia saw a major shift to remote work between 2019 and 2021 across different demographic and economic sectors. Industries that could most readily integrate remote work into their daily operations saw the greatest increase during the pandemic. These trends point to a continued demand for flexible working environments among Philadelphia residents in the future, particularly higher-income and white-collar workers, especially given that levels of remote work before the pandemic were similarly low across all these categories. The large variation in remote work populations seen across sectors and occupations points to a potential readiness among Philadelphia residents to adopt more hybrid and remote working policies if their jobs provide them with such agency, especially since there is growing evidence that flexibility has become a top factor for individuals looking for new employment opportunities [9].

 

 Works Cited

[1] R. T. McCarthy Laura McCrystal, Robert Moran and Erin, “Philadelphia announces lifting of COVID-19 restrictions,” https://www.inquirer.com. https://www.inquirer.com/health/coronavirus/live/covid-coronavirus-phil… (accessed Oct. 04, 2022).

 

[2] C. W. Munk, “What to consider before quitting a job mandating return to office,” CNBC. https://www.cnbc.com/2022/09/06/dont-want-to-return-to-office-what-to-c… (accessed Oct. 04, 2022).

 

[3] “Is remote work effective: We finally have the data | McKinsey.” https://www.mckinsey.com/industries/real-estate/our-insights/americans-… (accessed Oct. 04, 2022).

 

[4] “Women Are Facing Greater Interruption Challenges with Remote Work Than Their Male Colleagues,” UConn Today, Dec. 13, 2021. https://today.uconn.edu/2021/12/women-are-facing-greater-interruption-c… (accessed Oct. 04, 2022).

 

[5] “Working parents crave flexibility and they’re quitting their jobs to get it, finds study,” Moneycontrol. https://www.moneycontrol.com/news/trends/working-parents-crave-flexibil… (accessed Oct. 04, 2022).

 

[6] “Building a Post-Pandemic Economy That Supports All Workers, Remote or Not.” https://www.ncsl.org/research/labor-and-employment/building-a-post-pand… (accessed Oct. 04, 2022).

 

[7] L. Ioannou, “Vast migration of over 14 million Americans coming due to rise in remote work, study shows,” CNBC. https://www.cnbc.com/2020/10/28/vast-migration-of-over-14-million-ameri… (accessed Oct. 04, 2022).

 

[8] “The Cost of Living in Philadelphia: More Affordable Than Most Big Cities,” Houwzer. https://houwzer.com/blog/the-cost-of-living-in-philadelphia-more-afford… (accessed Oct. 04, 2022).

 

[9] “Three types of modern flexibility today’s workers demand | McKinsey & Company.” https://www.mckinsey.com/capabilities/people-and-organizational-perform… (accessed Oct. 05, 2022).