Hacking Remote Work for Pay Equity

For  numerous companies, remote work is here to stay. Of the 88% of companies who required or encouraged working from home during the pandemic, 66% expect the change to be permanent. After a year dominated by needing to make it through the day, it can feel strange to consider long term futures. What does permanent telework mean for workers? What impact will remote work have on persistent pay inequities? Right now, the prediction is one of mixed blessings.

A benefit of working from home is cost savings for employees. Commuting is not only time consuming, but it requires regular expenditure on fuel, car maintenance, and, for some, toll fees. By working from home, workers forego those costs entirely. Down the line, working from home can lead one to question why they need to live so close to their employer’s office, which is typically located in an expensive city like San Francisco or New York City. Already, tens of millions of Americans are considering relocation to a more affordable area. City dwellers are twice as likely to desire relocation.

There do exist companies that will cut pay for workers living in more affordable locations. This is because a part of the paycheck was an incentive to live near the company’s office in the first place.

Even with a decrease in earnings, the drop in housing, living, and transportation expenses can still mean workers increase their living standard. An individual American worker has the potential to save up to $4000 annually by working from home. The location-based wage gap is a form of pay inequity, but it’s one that benefits everyone.

Contrast that with the more well known forms of wage gap: those arising from differences in race and gender. Some predictions say telework can decrease hiring and management biases, but women in remote positions still earn less than male peers also working from home.

Worse, women and racial minorities are less likely to have the option of working from home, meaning they can’t take advantage of relocation benefits. As with any system, the shift to permanent telework creates winners and losers.