In an era of high unemployment and limited opportunity, more Americans are taking matters into their own hands and going to work for themselves out of their homes.
Normally small businesses have led the way during economic recoveries, but this time around they’re not creating many jobs. Instead much of the growth we are now seeing is in “lone eagle” businesses, to borrow a phrase from Phil Burgess, often operating out of the worker’s residence. This reverses the trend from 1960 to 1980, when there were steady reductions in the number of people who worked at home. Indeed, despite all the talk of increased mass transit usage, the percentage of Americans working at home has grown 1.5 times faster over the past decade; there are now more telecommuters than people who take mass transit to work in 38 out of the 52 U.S. metropolitan areas with more than 1,000,000 residents.
One clear driver of this trend is technology, particularly the growing ubiquity of high-speed Internet. A consultant in New York can now serve customers in Fargo, and vice versa, greatly expanding the range of places where people can live. This is particularly true for aging boomers, as well as younger workers having problems finding a full-time job in this tough economy.
Not surprisingly, of America’s 52 largest metro areas, the ones with the highest proportions of home-based workers are generally those with high-tech, information-based economies. Tops is San Diego, a major center for digital and biomedical businesses, where 6.6% of workers are based at home.
The next five metro areas, which have home worker concentrations ranging from 6.1% to 6.4%, all boast a high number of STEM workers and tech firms: Austin, Portland, Denver, Raleigh and San Francisco-Oakland. They all also have another thing in common: They tend to be popular destinations for millennials, who seem far more comfortable with unconventional work arrangements than older generations.
High real estate costs may be accelerating the trend in San Francisco, San Diego and Portland — if office space isn’t affordable, why not stay at home? All are also plagued by traffic congestion, most notably the Bay Area, which has among the longest commute times in the country. Rather than drive down snarled freeways, or take slow mass transit, individuals may do better working from home and heading into the traffic maelstrom only when absolutely necessary.
College Towns, Suburbs And Exurbs
Many metro areas, of course, are huge, and have many different kinds of geographies. But when we looked at the percentage of home-based workers in all municipalities with populations above 25,000, two types dominated the top of the table: college towns and tech-oriented exurbs. Boulder, Colo., for example, has the third highest proportion of people who work at home, at 11.6%, almost three times the national average. Other college towns with large proportions of telecommuters and one-person businesses include Berkeley, Calf. (tied for fifth, 10.6%), and Columbia, S.C. (12th, 9.9%), home to the University of South Carolina.
But the bulk of our leading work-at-home locales are tech-oriented suburbs or exurbs. These include several communities around the often traffic-clogged greater Atlanta area, including No. 2 John’s Creek (13.1%) and No. 6 Alpharetta (10.6%).
There are even more in the sprawl of Southern California. As many longtime Southland residents can attest, the best workday is one that does not involve either driving or taking transit. The top municipalities on our list in the region tend to be more affluent communities, including two suburbs of our top-ranked metro area, San Diego: Carlsbad (16th, 9.4%) and Encinitas (fourth, 10.7%).
The Codger Economy
Yet it would be a mistake to think cities with large home-based workforces are necessarily youthful ones. Nor are they all in large metropolitan areas. Although still slightly below the average for metropolitan areas, the pace of new telecommuter growth is now much faster outside the major metro areas.
More than 5 million Americans aged 55 or older run their own businesses or are otherwise self-employed, according to the Small Business Administration, and their numbers soared 52% from 2000 to 2007. As research from the Kauffmann Foundation suggests, many of these aging workers are not ready to hang up their workboots.
This entrepreneurial push could correlate with the movement of aging boomers to more rural communities, and sleepier outer suburbs. Contrary to the much-hyped notion of a “back to the city” movement among boomers, Census research suggests that if they move at all, most head further to the periphery. At the top of our list of communities over 25,000 is the coastal North Carolina city of Jacksonville, home to the Marine Corps’ Camp Lejeune and a good number of military retirees. A remarkable 13.8% of the people in this highly affordable, scenic community of 70,000 work out of their homes, roughly three times the national average. The median home price in Jacksonville: $141,000.
Other retirement hot spots with high telecommuter shares include Boca Raton, Fla. (9.8%), Scottsdale, Ariz. (9.8%), and Bend, Ore. (9.0%). These communities tend to attract well-educated boomers, many of whom have kept their business connections and work as consultants. In many cases, telecommuting allows people to continue their careers, but in an atmosphere of comfort, without the burden of commuting and, in many cases, sans the high income taxes of places like California and New York.
We can expect the wired economy to expand to other smaller communities. Already numerous smaller towns in the Midwest, such as Albert Lea, an hour and a half from Minneapolis, Brainerd, Minn., and Hastings Neb., all have home worker shares well above the national average. Many of the areas with the fastest growth in the number of self-employed people, notes EMSI is in small, somewhat isolated communities.
Many analysts who follow these trends expect stay-at-home workers to become more common in the future. According to research by Kate Lister and Tom Harnish of the Telework Research Network, the typical teleworker is a 49-year-old, college-educated, salaried, non-union employee in a management or professional role, earning $58,000 a year at a company with more than 100 employees.
This suggests that, as more workers enter their 50s, the telework population will expand further. These numbers will continue to be buttressed by both economic and social factors. The shift towards outsourcing by companies seems unlikely to slow in the years ahead, with more work going to subcontractors who can often work at home. At the same time more boomers, particularly those with skills and connections, will continue to move to places that offer more attractive lifestyles — a process that Joel Garreau has labeled “the Santa Fe-ization of the world,” which he links to people with enough money to have choices.
In the future, however, less well-heeled workers can also be expected to increasingly shift to affordable locales that appeal to them. This can be almost anywhere — a beach community, a rural hamlet, an exurb or even a dense urban location, as we can see by the geographic diversity in these rankings. As USC grad student Jeff Khau writes, this should encourage the development of wired coffee shops and casual restaurants in smaller communities and exurbs.
Finally, there are both familial and environmental reasons for this trend to expand. With more two-worker households, it has become more attractive to have at least one person working from home, part-time or full-time. And then there is the environmental desire to reduce carbon admissions. Compared to being forced to live in dense cities, or taking mass transit, the best way by far to reduce energy use – not to mention stress – is to not leave home at all.
Top Places Where Residents Work at Home
No. 1: Jacksonville, NC - 13.8%
No. 2. Johns Creek, GA - 13.1%
No. 3: Boulder, CO - 11.6%
No. 4: Encinitas, CA - 10.7%
No. 5 (tie): Berkeley, CA - 10.6%
No. 5 (tie): Alpharetta, GA -10.6%
No. 5 (tie): Santa Monica, CA -10.6%
No. 8: Frisco, TX - 10.2%
No. 9 (tie): San Clemente, CA - 10.1%
No. 9 (tie): Columbus, GA - 10.1%
No. 11: Bethesda CDP, MD - 10.0%
No. 12: Columbia, SC - 9.9%
No. 13 (tie): Boca Raton, FL - 9.8%
No. 13 (tie): Scottsdale, AZ - 9.8%
No. 15: Newport Beach, CA - 9.5%
| Journey to Work Market Share by Mode (2012 ACS.1 & Year) | ||||||||
| Total | Drive Alone | Car Pool | Transit | Cycle | Walk | Other | @ Home | |
| United States | 100% | 76.3% | 9.7% | 5.0% | 0.6% | 2.8% | 1.2% | 4.4% |
| Outside Major Metropolitan Areas | 100% | 79.9% | 10.2% | 1.2% | 0.6% | 2.8% | 1.2% | 4.1% |
| Major Metropolitan Areas (52) | 100% | 73.5% | 9.3% | 7.9% | 0.7% | 2.8% | 1.2% | 4.6% |
| Atlanta, GA | 100% | 78.0% | 10.5% | 2.9% | 0.1% | 1.4% | 1.1% | 5.9% |
| Austin, TX | 100% | 76.0% | 11.0% | 2.3% | 0.9% | 2.0% | 1.4% | 6.4% |
| Baltimore, MD | 100% | 76.5% | 8.9% | 6.5% | 0.3% | 2.7% | 1.0% | 4.1% |
| Birmingham, AL | 100% | 85.7% | 9.1% | 0.6% | 0.1% | 1.0% | 0.5% | 2.9% |
| Boston, MA-NH | 100% | 68.6% | 7.5% | 12.2% | 1.0% | 5.4% | 1.0% | 4.4% |
| Buffalo, NY | 100% | 82.9% | 7.5% | 3.0% | 0.5% | 2.9% | 0.8% | 2.3% |
| Charlotte, NC-SC | 100% | 78.8% | 10.3% | 2.1% | 0.2% | 1.6% | 1.2% | 5.9% |
| Chicago, IL-IN-WI | 100% | 70.9% | 8.8% | 11.1% | 0.7% | 3.2% | 1.1% | 4.2% |
| Cincinnati, OH-KY-IN | 100% | 83.5% | 8.3% | 1.8% | 0.1% | 2.0% | 0.7% | 3.5% |
| Cleveland, OH | 100% | 82.3% | 7.4% | 3.2% | 0.3% | 2.3% | 0.9% | 3.6% |
| Columbus, OH | 100% | 82.1% | 8.4% | 1.6% | 0.5% | 2.0% | 1.1% | 4.3% |
| Dallas-Fort Worth, TX | 100% | 80.9% | 10.2% | 1.5% | 0.2% | 1.2% | 1.5% | 4.6% |
| Denver, CO | 100% | 75.6% | 9.1% | 4.4% | 1.1% | 2.4% | 1.1% | 6.3% |
| Detroit, MI | 100% | 83.7% | 8.9% | 1.6% | 0.3% | 1.3% | 0.8% | 3.4% |
| Grand Rapids, MI | 100% | 82.7% | 9.2% | 1.2% | 0.5% | 1.8% | 0.6% | 4.0% |
| Hartford, CT | 100% | 81.4% | 7.6% | 3.4% | 0.2% | 2.7% | 0.9% | 3.7% |
| Houston, TX | 100% | 79.6% | 11.1% | 2.6% | 0.3% | 1.4% | 1.5% | 3.5% |
| Indianapolis. IN | 100% | 82.6% | 9.4% | 1.2% | 0.3% | 1.6% | 0.9% | 4.0% |
| Jacksonville, FL | 100% | 80.7% | 9.9% | 1.3% | 0.7% | 1.3% | 1.3% | 4.7% |
| Kansas City, MO-KS | 100% | 83.2% | 8.9% | 1.1% | 0.2% | 1.3% | 1.1% | 4.2% |
| Las Vegas, NV | 100% | 78.5% | 10.7% | 3.8% | 0.3% | 2.0% | 1.6% | 2.9% |
| Los Angeles, CA | 100% | 74.1% | 10.1% | 6.0% | 0.9% | 2.6% | 1.2% | 5.1% |
| Louisville, KY-IN | 100% | 82.9% | 9.3% | 1.8% | 0.2% | 1.8% | 0.8% | 3.2% |
| Memphis, TN-MS-AR | 100% | 83.0% | 10.5% | 1.2% | 0.1% | 1.2% | 0.9% | 3.0% |
| Miami, FL | 100% | 77.6% | 9.5% | 4.2% | 0.6% | 1.8% | 1.3% | 5.0% |
| Milwaukee,WI | 100% | 80.2% | 8.6% | 3.7% | 0.6% | 2.9% | 0.7% | 3.2% |
| Minneapolis-St. Paul, MN-WI | 100% | 78.2% | 8.6% | 4.3% | 1.0% | 2.2% | 0.7% | 5.0% |
| Nashville, TN | 100% | 82.4% | 9.6% | 1.1% | 0.1% | 1.2% | 1.0% | 4.7% |
| New Orleans. LA | 100% | 79.2% | 10.4% | 2.7% | 1.0% | 2.5% | 1.6% | 2.6% |
| New York, NY-NJ-PA | 100% | 49.8% | 6.7% | 31.0% | 0.6% | 6.1% | 1.6% | 4.1% |
| Oklahoma City, OK | 100% | 82.9% | 10.2% | 0.4% | 0.3% | 1.7% | 1.2% | 3.3% |
| Orlando, FL | 100% | 80.8% | 9.2% | 2.0% | 0.6% | 1.2% | 1.7% | 4.6% |
| Philadelphia, PA-NJ-DE-MD | 100% | 73.3% | 7.9% | 9.4% | 0.7% | 3.8% | 0.7% | 4.2% |
| Phoenix, AZ | 100% | 77.3% | 11.0% | 2.1% | 0.8% | 1.4% | 1.8% | 5.6% |
| Pittsburgh, PA | 100% | 77.3% | 9.0% | 5.5% | 0.3% | 3.4% | 0.9% | 3.6% |
| Portland, OR-WA | 100% | 70.8% | 9.7% | 6.0% | 2.3% | 3.8% | 1.0% | 6.4% |
| Providence, RI-MA | 100% | 80.4% | 8.8% | 2.9% | 0.3% | 3.2% | 1.1% | 3.2% |
| Raleigh, NC | 100% | 80.3% | 9.8% | 1.0% | 0.4% | 1.1% | 1.2% | 6.2% |
| Richmond, VA | 100% | 81.5% | 9.3% | 1.6% | 0.5% | 1.5% | 0.9% | 4.7% |
| Riverside-San Bernardino, CA | 100% | 77.7% | 13.4% | 1.5% | 0.4% | 1.6% | 1.0% | 4.4% |
| Rochester, NY | 100% | 82.4% | 7.9% | 1.9% | 0.3% | 3.6% | 0.7% | 3.2% |
| Sacramento, CA | 100% | 75.5% | 11.2% | 2.3% | 1.9% | 2.2% | 0.9% | 6.0% |
| Salt Lake City, UT | 100% | 75.0% | 12.1% | 3.9% | 0.9% | 2.0% | 1.3% | 4.7% |
| San Antonio, TX | 100% | 79.7% | 11.1% | 2.3% | 0.1% | 1.7% | 1.0% | 4.1% |
| San Diego, CA | 100% | 76.2% | 9.9% | 2.8% | 0.7% | 2.7% | 1.2% | 6.6% |
| San Francisco-Oakland, CA | 100% | 60.4% | 10.1% | 15.6% | 1.8% | 4.3% | 1.6% | 6.1% |
| San Jose, CA | 100% | 76.5% | 10.6% | 3.4% | 1.9% | 1.6% | 1.4% | 4.6% |
| Seattle, WA | 100% | 69.6% | 10.5% | 8.5% | 1.2% | 3.6% | 1.1% | 5.5% |
| St. Louis,, MO-IL | 100% | 82.4% | 8.1% | 2.3% | 0.3% | 1.7% | 0.9% | 4.2% |
| Tampa-St. Petersburg, FL | 100% | 80.0% | 9.6% | 1.2% | 0.8% | 1.7% | 1.3% | 5.4% |
| Virginia Beach-Norfolk, VA-NC | 100% | 80.9% | 8.9% | 1.9% | 0.4% | 2.7% | 0.9% | 4.3% |
| Washington, DC-VA-MD-WV | 100% | 65.8% | 10.2% | 14.1% | 0.8% | 3.2% | 0.9% | 5.0% |
This story originally appeared at Forbes.com.
Joel Kotkin is executive editor of NewGeography.com and Distinguished Presidential Fellow in Urban Futures at Chapman University, and a member of the editorial board of the Orange County Register. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.
Wendell Cox is a Visiting Professor, Conservatoire National des Arts et Metiers, Paris and the author of “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life.
Photo by By Rae Allen, "My portable home office on the back deck"
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telecommuting vs work at home
This very interesting report conflates "telecommuting" with home-based employment. Reading the question asked by the American Community Survey is important for understanding some nuances in what's being measured: https://www.census.gov/acs/www/Downloads/QbyQfact/PJ_work.pdf
The Federal government survey question that is at the heart of the essay above collects the location where the respondent mostly worked in the last week and how the respondent mostly traveled to work last week.
Last time I looked, telecommuting in USA by employees of companies with office facilities is mostly a part-time practice -- one or two days per week at most, on average. So the Census is missing the many routine telecommuters who may be staying home, for example, 20 percent of their work days.
And of course there are many home-based business workers who head out into traffic most days -- contract bookkeepers, for example, who may work for multiple clients in different locations around town. If asked by Census, these folks probably report themselves as commuters.
Flexible location policy from employers that lets their workers stay home or come in later to work when the road network goes toes up because of snow or a big truck crash is good for economic functioning, so telework even when not used every day is a very important phenomenon.
At the same time, there is ongoing evidence and experience that face-to-face work locations remain an important part of making America work well.
These are nuances that are averaged out in the big picture of transit use versus staying home that the essay above gets at.
A key public policy point made in the numbers is that on-demand urban mobility to facilitate face-to-face proximity remains very important for all manner of commercial and social interactions, and that public transit simply cannot and thus does not serve the vast bulk of trips in most USA locations most of the time.
More transit is not the answer to urban mobility deficiencies, and more working at home is not the answer. The large fleet of private helicopters in Sao Paulo Brazil going between roof tops is not a very good answer either.
I'm lately thinking affordable, private vehicle automation has great possibilities. Hype is soaring. "Driving is the distraction." I'm posting what I see that is new and not hype at http://www.scoop.it/t/driverless-cars-by-john-niles .
MUST READ: Alain Bertaud: “Cities as Labour Markets”
Alain Bertaud’s hot-off-the-press “Cities as Labour Markets” paper, is probably as enlightening as anything anyone has written on the subject so far.
http://marroninstitute.nyu.edu/sites/default/files/%20Cities%20As%20Labo...