Remote work benefits include reducing wage gap: Upwork report

Remote work has the potential to help reduce the growing wage gap, according to a report, “When Work Goes Remote,” released today by online staffing platform Upwork Inc. (NASDAQ: UPWK). In addition, it could ease some of the housing, traffic and inequality issues that come with market concentration.

“Remote work has the potential to help lean against the wage and opportunity gap that has been steadily growing for decades across the US,” said Upwork Chief Economist Adam Ozimek. “Instead of businesses and professionals concentrating in a handful of cities, remote work can help spread opportunities and increase pay to professionals across the US.”

Key findings from the report include:

• On average, wages in the top 15 most expensive cities for skilled occupations were $40.54 per hour, compared to $28.36 for the average location, a premium of over 40% for the exact same occupation.
• Despite having only 19% of the US population, businesses are highly concentrated in the top 15 most cities. However, with remote work, we see that 49% of business spend is moving from the top 15 most expensive cities to lower-cost locations.
• Upwork project data shows, when independent professionals engage with businesses located in the top 15 most expensive cities, they will make, on average, 18.6% more than average wages in their local market, and 8% to 11% more than the rates Upwork clients in their local labor market pay.
• Despite having a higher pay in the top 15 most expensive cities, the extremely high cost of living means that a high percent of earnings are eroded by housing costs. The price-to-income ratio in those top 15 cities is, on average, double than that in the rest of the country..

Remote work can also benefit businesses by provided greater access to talent, increased productivity and expected savings in wages of at least 4.3% compared to pay in expensive cities.

The original article can be found at: Staffing Industry Analysts