What Will Your Commute Look Like When the Pandemic is Over?Submitted by Bernhardt Wealth Management on May 4th, 2020
As we mentioned in a previous article, the coronavirus pandemic has ushered in a host of rapid changes in the way Americans think, shop, socialize, travel, and work. Many researchers and social scientists have remarked on the likelihood that, once the pandemic is under control, not all of these behaviors will quickly revert to pre-COVID-19 norms. In fact, society in America and around the world is more likely to adapt to a “new normal.”
One of the most visible signs of this trend can be seen in the massive and almost immediate shift in the workplace toward telecommuting—or “teleworking,” as it is often termed. With widespread stay-at-home orders in force around the country, businesses and nonprofits of all types have been forced to come up with ways to maintain relevance, productivity, and revenue streams without dependence on employees or customers coming to a central location. The restaurant industry quickly shifted to curbside- or takeout-only service; information and media companies ramped up work-at-home capabilities and procedures; even real estate agents adapted by utilizing virtual home tours and no-contact closings. In fact, according to a recent article from the Brookings Institution, half of all American workers are presently using some form of telecommuting—double the percentage from just two years ago.
The article goes on to suggest that this massive shift to telework is a genie not likely to go back in the bottle—at least, all the way. The technology is not new, of course, but adoption in the American workplace has been spotty, most often due to a prevailing office culture that mandates physical presence as evidence of commitment, collegiality, and productivity.
But sudden crises can alter such perceptions and habits of thought, as we saw in the aftermath of the 9/11 attacks in New York City and the ensuing anthrax scare, which instigated a spike of interest in telecommuting. At a subsequent congressional hearing in 2004, participants noted the emerging necessity of teleworking and decentralized operations as a part of continuity planning in the face of future catastrophes. Just as 9/11 changed our expectations around getting through security at the airport, the coronavirus pandemic may permanently alter how we think about “going to work.”
The Brookings article also makes the interesting observation that employees who are able to work from home most productively tend to have higher incomes than those who don’t or can’t. Another article prepared by Brookings staff highlights the fact that those who can do most or all of their work from home tend to be more affluent than those who cannot.
Implications of this shift are somewhat obvious for industries like commercial real estate and high-tech. In the first case, demand may fall as businesses’ preference for office space shifts to reflect fewer people coming to a central location. In the latter case, use of services like Zoom, Slack, Skype, and other teleconferencing and messaging applications will likely drive growth, not to mention heightened demand for basic infrastructure elements such as web hosting, bandwidth, virtual private network capability, cloud computing, and other facets of internet-based commerce.
But there are important considerations for other industries, as well. The petroleum sector is already feeling the shock of evaporating demand as more and more flights are canceled and people stay home most of the time. Airlines may never again see the volume of business travel that was once a staple of their revenue. And paradigm shifts in basic industries such as these tend to ripple through the whole economy, much like what we witnessed in the 1970s and ’80s as the steel and heavy manufacturing industries migrated out of the US, creating what we now often refer to as the “Rust Belt.”
Nothing is as certain as change, and we are now in a season of broad change following a course that is difficult to predict. But whatever happens, we are here to offer sound, research-based counsel for your changing financial needs and goals. If you have questions, let us help you find the answers you need.