People who work from home earn more than those who commute—here's why
Technology has radically transformed how — and where — Americans work.
Working remotely is more popular than ever before. One Gallup survey found that 43% of Americans work from home occasionally. That's up from 39% of those who did in 2012.
And according to Quartz, U.S. Census data indicates that 5.2% of U.S. workers completely worked at home in 2017 — that's about 8 million people.
There's evidence that even more Americans would work from home if they could.
A recent survey of 2,000 working professionals and 1,000 hiring managers by LinkedIn found that 82% of workers want to work from home at least one day per week, and 57% want to work from home at least three days per week.
While it is not surprising that people are interested in forgoing their commutes and working from the comfort of their couch, data from the U.S. Census Bureau shows that telecommuting can also pay more.
The Census Bureau estimates that in 2018, employees who worked at home out-earned those who walked, drove, carpooled, or took public transportation to get to work.
The median earnings for a person who works from home were $42,442 in 2018, far above the median earnings for all workers which were closer to $38,184.
Last year, median earnings were $21,752 for those who walked to work; $40,184 for those who drove; $30,338 for those who carpooled and $40,519 for those who took public transportation.
A major reason for elevated wages among telecommuters likely has to do with what kinds of jobs can be done remotely.
Blue-collar and low-wage jobs in industries like construction, manufacturing and fast-food often require being physically present at work. However, white-collar high-tech roles are typically more conducive to working from home.
Education level also has a high impact on a worker's likelihood of working from home.
According to the 2019 American Time Use Survey from the Bureau of Labor Statistics, "among workers age 25 and over, those with an advanced degree were more likely to work at home than were persons with lower levels of educational attainment — 42% of those with an advanced degree performed some work at home on days worked, compared with 12% of those with a high school diploma and no college."
The irony is, many employees say they would be willing to earn less for the chance to work from home. A 2017 study by Princeton University economics professor Alexandre Mas and Harvard economics professor Amanda Pallais found job applicants were willing to accept 8% less pay for the option to work from home.
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