When work from home won’t work

Is work from home (WFH) yet another gap widener in society during and in the aftermath of the COVID-19 pandemic crisis?

A new study in the growing economic literature on WFH suggests so. This is because the occupations that lend themselves to WFH, hence less affected by the lockdowns imposed in most pandemic-hit countries, are not the occupations of the more disadvantaged groups in society.

That is, white-collar jobs are more likely to persist under WFH arrangements, but blue-collar or menial jobs—jobs held mostly by the poorer segments of society—cannot.

With 7.25 million Filipino workers rendered jobless as of April and unemployment hitting close to one in every five workers (17.7 percent), the already dire employment situation could take a long while to return to what we’ve been accustomed to. And the less workers are able to continue their jobs working from home, the more difficult it would be for them to restore normalcy in their lives.

Mariya Brussevich, Era Dabla-Norris, and Salma Khalid studied the labor markets in 35 countries hit by the pandemic and observed that, overall, those who work in food and accommodation and in wholesale and retail trade are the hardest hit for having the least “teleworkable” jobs at all. They also found that younger workers and those without university education are less likely to work remotely. Women in particular are more vulnerable, because they are disproportionately concentrated in the hardest-hit sectors like food service and accommodation. They also dominate jobs in child care and domestic work, jobs that have also been disrupted by the pandemic (unless done as live-in workers).

Employees and part-time workers in small- and medium-sized firms have also been the most hard hit. For obvious reasons, part-time workers are often first to be released when conditions turn bad, and the last to be hired when conditions improve. But the other reason these workers have been more vulnerable is that their employers have also been hard hit by the lockdowns. It is thus disheartening to hear the Philippine government admit that its budgetary resources will be unable to meet the needs of the bulk of enterprises in the country that are micro, small, and medium enterprises.

The authors established from their cross-country study that workers at the bottom of the earnings distribution are least able to work remotely. Compounding this effect, they found that workers from the lowest income groups are already concentrated disproportionately in the hardest-hit sectors like food and accommodation services. These are among those industries where teleworking is least suitable. In short, it’s already a foregone conclusion that the COVID-19 crisis will not only lead to the resurgence of poverty, but will also worsen income inequality.

But even the same occupations could have significant differences across countries. For example, WFH is generally much easier in Norway and Singapore than in Turkey, Chile, Mexico, or the Philippines, simply because more than half the households in most emerging and developing countries don’t even have a computer at home. On top of that, the feasibility of WFH is determined by ease of access to and quality of internet connection, something that is clearly wanting in the Philippines.

The pandemic is already changing business models and the nature of work in many sectors. The winners to emerge from the pandemic crisis will prominently include those in e-commerce (with corresponding losers in traditional retail establishments), online entertainment media (with corresponding losers in public entertainment establishments like cinemas and theaters), and various other services that may be delivered online.

The digital divide across and within countries is worsening societal divides. Any strategy for achieving a better new normal must thus prominently address the need for wider and better quality digital connectivity for the population. But because WFH is not an option for our poorer workers, we must additionally find ways to help them gear up to find suitable occupations in the increasingly digital economy that the post-COVID era is shaping up to be.

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