Unsurprisingly, the pandemic pushed remote work to the forefront of employment. Before September 2020, only 16% of people had the luxury of working from home. By September, 72% of people went remote, with 34% expecting to remain remote permanently.
Most of us can agree that working from home frees up a lot of time from commuting or waiting between work tasks and correspondence. In addition to a better work-life balance, this style of work also puts more money in the pockets of workers and less in those of big cities.
Remote Work Can Save You $12,000 Per Year
FlexJobs recently broke down the costs the average remote worker saves annually in commuting, clothing, and eating out. The total came to about $12,000 per person or $6,000 per hybrid worker.
We’ve taken the information from FlexJobs, adjusted it for 2023 prices, and accounted for a couple of other factors to break down how much you can truly save.
The most apparent and celebrated benefit of working from home is eliminating the average 239 hours of commute time Americans experience annually. As per Bankrate, the average cost of the U.S. commute is $8,466 annually as of 2022. Add in escalating costs of new cars, fluctuating gas prices, and the additional 32+ hours we lose to traffic during the year, and this number could climb even higher.
As remote work became more possible than ever, workers began a great migration from large, densely populated areas to suburbs, small communities, and low-cost living options. Locations like New York, Chicago, and San Francisco saw the largest exodus as people opted for places like Texas, Georgia, and Florida instead.
If you left behind the $1,934 cost for a 1-bedroom in NYC and instead moved to Katy, TX – one of the most popular inbound destinations during the pandemic – you should have been to find a new one-bedroom for about $1,650. That’s a savings of $284 per month or $3,408 annually.
By eliminating your commuting costs and moving to an area with a lower cost of living, you’re already nearing almost $12,000 in savings annually compared to the in-office worker.
Depending on your in-office job, you may have had to use a set of work clothes that you otherwise would never wear. While work clothes shopping isn’t as expensive as housing or commuting, the average household still spends around $1,434 on apparel and services annually. This includes the clothes, plus keeping them clean, pressed, and ready to wear.
Swap these fancy clothes for comfy home loungewear and you’ve got a lot less worrying, ironing, and spending to do.
Perhaps the sneakiest expenditure for working in offices is food. Tagging along with coworkers who order lunch or heading to the very expensive salad bowl place around the corner could easily add up to hundreds of dollars per month. If you’re suddenly working from home in comfort with a whole fridge full of lunch options, driving to a restaurant nearby is suddenly a much less attractive option.
We’ve added this component to the list because it’s often erroneously overlooked. They say time is money. If nothing else, we can agree that time is your life broken down and measured.
When working in the office, how much time do you dedicate to work outside of the standard 40 hours? Consider the time it takes you to get ready in the morning, the time commuting, and, yes, even the time in those conferences that could have been an email. You dedicate many of these unpaid hours just to show up at your job.
Let’s say you commute an average of 4.35 hours per week, spend half an hour every day getting ready, and waste another hour extra weekly at work staying late or arriving early.
Would you accept the same pay and work an extra 18+ hours monthly? No? Well, those in the office may have accepted these conditions during onboarding without knowing.
Remote Work Costs Big Cities Billions Per Year
While remote work economically benefits employees, its impact on cities and business districts is distinct. Bloomberg News recently analyzed information shared by Stanford to show the negative impact of remote work.
In big cities across the U.S., offices are graveyards on most Mondays and Fridays. In Manhattan specifically, workers are spending at least $12.4 billion less annually due to 30% less time in the office.
Instead of eating out around the office, using public transportation or parking lots, and shopping after work, remote workers are, quite literally, out of office.
What happens when cities make less money from their employees?
As fewer workers come into the office and employment disperses to cheaper, suburban areas, big cities start to collect less income tax. Less income tax means these cities could struggle to find enough value to upkeep things like subway systems and schools.
According to a senior fellow at the Hoover Institution, Steven Davis, a weakening commuting base decreases sales and transit revenue, consequently decreasing the commercial property tax base. After this, those who used to provide goods and services to office laborers receive a lower labor income.
While cities have been and will continue to lose money, many employers are pushing back and attempting to reinstall the rule of working in an office. Such a rule may not be well-received by the workforce, though, as most employees are noticeably happier working from home. Not to mention that office vacancy rates are currently over 15% – the highest in years.
Final Thoughts on Remote Work and Your Wallet
Remote work decreases work-related expenses and saves employees roughly $12,000+ annually. Not only is it beneficial for your pockets, but surveys have shown that remote work also greatly improves both mental health and work-life balance. Lower levels of stress and the ability to participate in healthy habits at home related to diet, exercise, and socializing have made the work-from-home life a coveted one.
Whether or not offices will slowly fade away is hard to tell, but one thing is for sure. Remote work is beneficial in more ways than one, and it’s certainly here to stay.