I’d rather be a tourist in a big city than a permanent resident.
They’re expensive, crowded, have higher crime rates, more pollution, traffic, and typically smell like shit. Sounds enticing.
Today, about half of the world’s population lives in urban areas. There are 400 cities with more than a million people. Roughly 80 percent of Americans live in urban areas, according to the U.S. Census Bureau. What’s strange though, according to Gallup, is Americans don’t want to live in big cities. They want to live in rural areas.
So why do people choose to live in big cities? What is the allure? In the most basic terms: jobs and opportunities. I have a friend who has lived in LA and NYC for the past 10 years in hopes of becoming a famous comedian. They claim the opportunities that are available in these cities give them more exposure. I guess so. But, at what cost? The problem with living in big cities is it’s unsustainable over the long run. Even if you are making big bucks, for most city dwellers it is hard to build savings and many are living paycheck to paycheck to make ends meet.
As we’ve seen from the COVID crisis, there have been massive shifts in our normal day to day lives. The biggest one is arguably the shift to working from home (WFH) full time. For the most part, it appears that people have adapted rather quickly to their new surroundings. If this weren’t the case, I believe there would have been a stronger push by large companies to get back to the office.
Instead, we are seeing quite the opposite. Look at how many companies have said their employees can work from home for the rest of the year or longer.
Some companies, such as Twitter, have even thrown down the gauntlet and said employees could WFH forever—or for as long as Twitter remains a company.
For the digital economy, it makes sense. Reduce overheads and make more bank—assuming your employees are actually working efficiently remotely.
We may be in the infancy stages of the WFH movement as shown in the following information from Global Workplace Analytics.
How many employees work from home?
• 5 million employees (3.6% of the U.S. employee workforce) currently work-at-home half-time or more [Global Workplace Analytics’ analysis of 2018 American Community Service (ACS) data]
• Regular work-at-home has grown 173% since 2005, 11% faster than the rest of the workforce (which grew 15%) and nearly 47x faster than the self-employed population (which grew by 4%) [Global Workplace Analytics’ analysis of 2018 ACS data]
• 43% of employees work remotely with some frequency [Gallup State of the American Workplace 2016]
How many people could work-from-home?
• 56% of employees have a job where at least some of what they do could be done remotely [Global Workplace Analytics]
• 62% of employees say they could work remotely [Citrix 2019 poll]
• Studies repeatedly show desks are vacant 50-60% of the time.
How many people want to work from home?
• 80% of employees want to work from home at least some of the time [State of Remote Work 2019, Owl Labs]
• Only 12% of federal employees say they would not want to work from home at least some of the time [Federal Employee Viewpoint Survey 2018]
• 35% of employees would change jobs for opportunity to work remotely full time (47% of Millennials and 31% of Boomers); 37% would do so to work remotely some of the time (50% of Millennials and 33% of Boomers) [State of the American Workforce, Gallup, 2016]
• Flexibility is one of the highest ranked benefits by Millennials, even higher than student loan or tuition reimbursement. It ranked high for Boomers too although the percentages were 15-20 points lower. [State of the American Workforce, Gallup, 2017]
• More than a third of workers would take a pay cut of up to 5% in exchange for the option to work remotely at least some of the time; a quarter would take a 10% pay cut; 20% would take an even greater cut. [State of Remote Work 2019, Owl Labs]
So to recap, less than 5% currently WFH but 80% want to. The truth is, we can’t all be coders, influencers, and YouTube stars. The world needs ditch diggers, too.
COVID has absolutely brought to light all of the pushes from living in a big city to the pulls of rural America. The longer the pandemic is still considered a threat, the more WFH will be adopted as the standard—while employers and employees begin recognizing the benefits.
Anecdotal evidence here, but, I’ve talked to a few friends during the crisis and asked them if they’ve thought about moving out recently. All of them said they are considering it more seriously than they did before. When asked why, the two most common answers were “it’s impossible to get ahead in the city because of the living costs” and “I need more space”. It’s not hard to argue with that. Paying $3-4k per month on rent to live in a 600 sq ft loft is no way to live. With that monthly payment you could have a 5000 sq ft mansion in the Midwest.
While this new trend sounds great in theory, just yesterday, Facebook said employees who will continue to work from home for an expected five to ten years will receive cuts if they move to less expensive areas. Therein lies the rub. Just as you thought you were going to take advantage of the big tech companies, they tighten the vise and dangle your puppet strings.
You moved to the city to get the opportunity. You got the job. Now the job is saying if you move away from the city that you’re most likely going to take a pay cut. Would you still do it? To me, it’s a no-brainer. Working at any good tech company will still give you a better cost of living if you are located in a rural or small city suburb area—just make sure you have a good internet connection.
If people don’t need to be in the office to work, then major tech companies don’t need to be headquartered in large cities. This won’t kill cities, but it will stunt their growth, and we could see a trend reversal where large companies start moving away from cities and head to the suburbs.
If the companies leave, the people will follow.
This is post #58. You can follow me on Twitter or Instagram or sign up for my free newsletter here. Also please check out my Amazon page for a full reading list.
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