Unemployment rising in remote-friendly occupations
The recent rise in unemployment is steeper in occupations where remote work is more widespread. A continued rise could shift bargaining power towards employers who want workers to return to the office.
Last week Amazon announced that its workers would need to work in person five days a week starting in January. Since tech has been the sector most open to remote work, and Amazon is such a dominant tech company, Amazon’s announcement prompts the question: could remote work, after jumping during the pandemic and holding steadily high since, go into reverse?
Predictions about remote work tend to be grounded in structural arguments about its impact on productivity, flexibility, supervision, mentoring, and organizational culture. But the cyclical ups and downs of the labor market could matter, too. Working remotely is a perk, and workers have more bargaining power over perks (and everything else) when the labor market is tight. One academic study found that remote work was more widespread in states with tighter labor markets. In the emergence from the pandemic in 2022 and 2023, unemployment reached historic lows, giving workers bargaining power to resist calls to return to the office. Times might now be changing.
The Amazon announcement follows a period of rising unemployment, from a very low level of 3.4% in April 2023 to a still-low-by-historical-standards level of 4.2% in August 2024. However, the recent increase in unemployment has been sharper for people in occupations where remote work is more common.
