Study Reveals Winners and Losers of Israel's Work-from-home Revolution

Workers living in the periphery or with lower incomes have fewer opportunities, face more obstacles

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Work from home in 2020.
Work from home in 2020.Credit: BERNADETT SZABO / Reuters

The surge in the numbers of people working from home created by the coronavirus had raised hopes that it would enable people to begin enjoying a more balanced lifestyle. Managers reported that their employees were more productive and companies began to realize the huge costs they could cut by reducing office space.

But it has quickly emerged that there is a downside, too: Workers at the lower end of the labor market don’t have jobs where remote work is an option. When lockdowns and other measures prevent them from getting to work, it spells lower pay and maybe even the permanent loss of their job. The crisis has made the job market even more unequal than it was before.

There’s been a big jump in remote work: In July, even after the most onerous of the lockdown measures had been lifted, 43% of Israelis reported they were working from home, according to a study conducted by Daphna Aviram-Nitzan, director of the Center for Governance and the Economy at the Israel Democracy Institute, and researcher Rachel Zaken. Before the pandemic, only 9% worked full or part-time from home.

Even after the pandemic is over, the work-at-home option looks like it is here to stay, as are its socioeconomic implications, because it is so popular. Fully 49% of those surveyed in the study who said that they were ready to work at home at least one day a week when things return to normal expressed a willingness to take a pay cut and give up other benefits for the privilege.

But the researchers found that remote work wasn’t the same all over Israel. People who live in the Negev and Galilee peripheries, where jobs are more scarce and pay is lower, were less likely to have been working from home during the crisis than those in greater Tel Aviv. Only 38% of residents of areas outside the greater Tel Aviv area were able to work from home, compared with 50% of greater Tel Aviv residents.

Broken down by income groups, only 30% of those with monthly household incomes of 10,000 shekels (about $2,900), an amount less than the average wage nationwide, were working from home, compared with 59% earning 15,000 to 25,000. Aviram-Nitzan and Zaken found that the higher a household’s income the more likely its breadwinners had the option of remote work – that is, until you reach the very top of the income ladder. Only 47% of households with income over 25,000 shekels were working from home.

Israeli Arabs had a lower rate of remote work (30%) than Jews (46%), which was mainly due to the very low percentage of Israeli Arab men working at home (18%). In general, there was no difference between the percentage of men and women working at home (42%), according to the study.

The inequality phenomenon is not limited to Israel. The International Monetary Fund warned in a July report that close to 100 million workers in 35 developed economies may face layoffs because they can’t work from home, equal to about 15% of the workforce on average.

The ability to work from home is correlated with per capita gross domestic product. In rich countries such as Singapore and Norway, it’s much easier than poorer ones like Turkey and Mexico. Israel scores well on remote-work capabilities – only Finland, Singapore, Sweden and Norway rank higher in the IMF survey. Britain trails Israel slightly.

In Israel, the reason for the geographical gap, said Aviram-Nitzan, is that workers in the periphery are more likely to have jobs that require them to be physically present (38%) at the workplace than those in greater Tel Aviv (25%). “If you’re a factory worker, the transition to remote work isn’t relevant to you,” she said.

In greater Tel Aviv, 28% of residents are employed in high-tech, where the option of working at home is easy. That is seven percentage points higher than the rate in the periphery. For professions like law or accountancy the rate is 34% in greater Tel Aviv compared to 24% in the periphery.

Many hoped that Israelis who live in the periphery would finally be able to seek more lucrative employment because commuting was no longer an obstacle. “The transition to remote work was an opportunity to reduce this relative disadvantage they suffered, but we’re now seeing that they aren’t playing as much a of a part of the work-at-home phenomenon,” said Aviram-Nitzan.

Even periphery residents and low-income earners who do work at home encounter more obstacles than others. For greater Tel Aviv residents working at home, the biggest problem they reported was missing physical and personal contact. But for residents of the periphery and those at the lower end of the income spectrum, the biggest problem was trying to find a quiet place to work at home at all or an available computer because they have to share with other family members.

These figures should signal a red alert concerning equal opportunity for employees working at home, said Aviram-Nitzan, adding that the responsibility for resolving this lack of parity lies with employers and government.

“Anyone who employs people at home needs to ensure that workers have what they need to perform their tasks – but not only that. First and foremost the government has the responsibility, both as a major employer in its own right and as a regulator, to establish the rules of the game for remote work and ensure that the system doesn’t just work for the strongest elements of the labor market,” she said.

Nearly three-quarters of the Israelis surveyed for the study expressed confidence that remote work would provide more and better employment opportunities for marginalized segments of the population, including the handicapped and older workers. But the optimism was much more widespread among those who are already benefitting from it and less so among those who were struggling.

“The survey showed how work from home has not lived up to its potential for weaker elements of the population, which is due to the fact that workers themselves have no faith in its huge potential,” said Aviram-Nitzan. “They want to participate in the phenomenon and benefit from it. The physical conditions that prevent remote work emphasize to weaker workers – those with low incomes and Arab workers – their inability to work at home.”

The survey was taken in two stages – once at the start of the Israeli lockdown in April and a second time in July. It included 757 people, of whom 599 were wage earners and the rest self-employed. It polled 606 Jews and 151 Arabs.

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