Canada

Canada’s High Income Households Are More Likely To Work From Home

It might seem like everyone is working from home, but the majority of Canadians can’t. Statistics Canada (Stat Can) data on work from home trends was released this morning. The agency broke down the rate of those that could from April 2020 to June 2021. The top 10% of household incomes were more than 9x as likely to work-from-home as the bottom 10% of households. In general, the more a household made, the more likely they could avoid leaving home to make a living. This can have a fairly substantial impact on who lives in cities, and who buys in secondary markets.

More Than Half of High Income Households Could Work From Home

Households with the biggest incomes were more likely to work from home, or at least have the option. The agency found 45% of the top 10% of income distribution worked from home between April 2020 and June 2021. In this demographic, even more (57%) could have worked from home with their type of job. This is in stark contrast to lower income households, where the vast majority has to leave their home.

Canadian Households That Worked From Home By Income

The percent of dual-income households where both spouses worked from home between April 2020 to June 2021, by income decile.

Source: Stat Can; Better Dwelling.

Even going down to the 9th decile of income, those in the top 80% to 90% of incomes, we see a sharp drop. In this demographic, only 34.5% of households had both spouses work from home, a drop of more than 10 points. As you get further down the income chain, fewer and fewer people are able to earn a living at home.  

Only 5.1% of The Lowest Income Workers Could Work From Home

When you get to the bottom decile, aka the lowest 10% of household incomes, only a sliver could work from home. The bottom 10% of households only saw 5.2% of households work from home between April 2020 and June 2021. Only 11% of jobs for this demographic are even possible to do from home. 

The Industry Employed In Plays A Large Role In Income and Work Flexibility

As you might have expected, one of the biggest reasons is the type of jobs each income bracket does. The finance and insurance industry, known for decent pay, saw 7 in 10 people work from home. Cultural industries also saw a large share of work from home (65%), as well as public administration (56%). In contrast, it’s hard to work from home if you work in a restaurant, grocery store, or shipping.

An important takeaway for the real estate crowd is how this can shape cities. Canada’s cities are prohibitively expensive for even fairly high-income households. These households have flexibility and mobility, and the means to move further away. They also tend to perceive long commute times to be more painful, so commuting isn’t likely.  Work from home, and outside of the city, may not be as temporary as many assume. This can be a drag for expensive cities, and a boost to the tertiary markets that surround them.

In contrast, low-income households have to be near the city for work. They can’t just Zoom-it-in, meaning they’re stuck with long commutes or high shelter costs. Expensive cities are now the perfect combination of poorly aligned priorities.

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11 Comments

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  • Frank Daugherty 3 months ago

    TL;DR people that need to be in the city are the ones that can’t afford it.

    The dangerous part is those that have to go to work (shipping, waiters, etc.) need to service these wealthier households. Their location in the city won’t persist. It’s temporary.

    • Trader Jim 3 months ago

      Canada was very unique in the sense its downtown wasn’t a slum, like most major cities in the world. Usually the rich are located further away from the city centre, and wealthy suburbs develop.

      Now we’re finally starting to see that with investors-owned working pods for the middle class, with wealth enclaves with mega mansions like in Woodbridge starting to pop up.

      • D 3 months ago

        Downtown Toronto in the 90’s was a slum. And the Center of London which is its own political entity otherwise known as the city of London is full of the rich and powerful. The suburbs around London are slums.

        • Tdot 3 months ago

          I agree D. I grew up in downtown T.O area and during the 70’s and 80’s it was pretty much a shithole. I used to see bums sleeping on the front steps of a CIBC branch at queen and bathurst, used syringes were seen commonly on sidewalks and parks, dirty used condoms in parks and alleys, empty beer cans everywhere, empty hair spray and aftershave bottles; yes the bums would drink aftershave to get drunk and inhale hair spay to get high!….. Lots of blue tongues those bums had from the aqua velva lol. Downtown T.O has certainly come a long way but damn was it ever a shithole back in the day.

  • Jess 3 months ago

    I don’t know about whether the trend sticks or not, but I know I’m never going back to the office. You don’t realize how much people obsess over housing in Toronto (costs, whether they can afford it, getting renovicted, etc.) until you move away from it.

    Moved last fall, and I can tell you the only time someone here has brought up real estate prices is in the context of, “oh, you’re lucky you got out. Home prices are crazy!”

    • RW 3 months ago

      It’s also often a sign of a bubble. The “HGTV effect” it’s sometimes called. Everyone wants to talk stocks when the market is doing well. Everyone wants to talk real estate when it’s doing well.

    • Ethan Wu 3 months ago

      There’s a reason studies show people with stable housing are more productive. The amount of mental energy spent on housing when you’re young or poor is just a suck on every other thing you could be doing with that time.

  • RW 3 months ago

    how very feudal of Canada.

  • Fazid 3 months ago

    Not to politicize this too much, but this is why it’s so funny to see academic elites suggest everyone stay home at minor spikes during the pandemic, or have a lockdown when there are almost no deaths anymore.

    It’s easy for them to say stay home. They don’t seem to realize who has to bring them their Uber Eats and Instacart orders. Then they don’t get why poor people don’t have the same sense of urgency they do for public health measures.

    • david 3 months ago

      Also the politicians who mandate lockdowns which affect minorities and women the most (services sectors) are the same who talk about shecession and minorities being in even more precarious situation.

  • Jj 2 months ago

    If the High earners move to suburbs or further and still make a bank and own mansions and only regular middle class will stay in cities won’t it make city prices to fall as no one will be buying (can’t afford) at higher price hence less buyers hence price drop ???

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