The increase of remote work has altered California’s labor landscape, potentially presenting challenges for workers to get certain in-state jobs and, at the same time, adjust to the state’s high cost of living.
That’s according to a report by the nonpartisan Legislative Analyst’s Office released Wednesday examining the impact of remote work on employees and job-seeking Californians.
Around one in eight Californians work mainly from home, according to the report, which is a third higher than in 2019 before the COVID-19 pandemic. Four key sectors have seen the largest rise of remote work: technology, finance and accounting, business and government operations, and sales and marketing.
“We found that, yes, remote work rates have fallen since their pandemic peak,” said Chas Alamo, one of the LAO researchers who authored the report. “But, they really seem to have stabilized in the last couple of years which suggests that the sort of pattern of work for many employers and many workers is here to stay.”
Heavily remote jobs are growing twice as fast outside of California, the report found. More employees in remote jobs have left California than those who moved in, a reversal of a trend from before 2020 when more remote workers were migrating to the state.
The rise of remote work will also have consequences for California’s labor force.
“For many workers who are Californians or long-time Californians, they might now be competing against a national labor market pool of other candidates in other states for a remote position with a California employer,” Alamo said. “That's going to be new competition for many workers.”
Alamo added Californians are having to navigate this altered labor landscape with increased competition while simultaneously having to face the state’s high cost of living.
For this reason, Alamo says California’s changed labor landscape warrants legislative consideration to develop ways to attract and retain workers. Lawmakers could also revise tax policy on remote work to tax employees who work for California-based companies who are located out of state.
