During the pandemic, 88% of global organizations have either encouraged or required remote work. Of those businesses, 66% think remote work will remain the norm going forward. This change in the way of doing business is already affecting the lives of workers in ways likely to become more apparent as the trend continues. What do these changes mean for the issue of pay inequity?
One notable development is the ability for workers to relocate away from their company’s office. Many companies are currently located in expensive cities like Washington DC or New York City. They have to offer high salaries to employees so that people can afford to work there. If workers rarely need to visit the office in person, they are free to live in more affordable areas. Anywhere between 14 and 23 million Americans are already considering relocation. As a result of moving to places where living costs are lower, some companies are planning to cut pay. Depending on the pay cut in proportion to decreases in housing costs and commute expenditure, the employee may still come out ahead. Unlike other pay gaps, location-based wage gaps can benefit everyone. Individual workers can save between $ 2.5K and $ 4K a year while US employers as a whole could save $ 30 billion a day.
Unfortunately, remote work has not yet been shown to improve other forms of wage gaps. Women working remotely are still paid less than men who are also doing remote work. Women and racial minorities are also less likely to have the option of remote work, icing them out of the cost-saving benefits to remote work. So while remote workers may benefit from a location-based wage gap, gender and racial wage gaps are still in force for workers across America. See the infographic below for more on how the world is changing:
Infographic Source: TrackTime24