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Economist: Americans save big not commuting to work, savings put to good use

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Economist: Americans save big not commuting to work, savings put to good use
Posted at 3:19 PM, Sep 04, 2020
and last updated 2020-09-06 22:50:02-04

Some workers have saved a ton of money during the pandemic thanks to many not having to commute. In fact, it’s reported that the total savings by Americans not having to commute is upwards of $90 billion.

On average, workers across the country usually have a work commute of about 50 minutes.

“I don’t miss the commute at all,” said Raymond Kelly, who is now working from home. "It was a little drive on both sides and a boat in the middle.”

Kelly is an engineer in Washington state, and for eight years, his commute was far longer than the average workers’.

Every day, he commuted from Poulsbo, Washington to Muckilteo. First, he drove 30 minutes to park and catch a ferry in Kingston, Washington. After the 30 minutes ferry ride, he got into his second car parked on that side of the Puget Sound and then drove another 30 minutes to finally get to his job. In total, his commute was about three to four hours a day. However, since his company began allowing people to work from home in March, his commute is now just two or three minutes. It’s the walk from his bed to a small office he created in his home.

“I think it has been huge. It is almost like getting a piece of life back,” said Kelly.

Kelly is saving at least $500 a month not commuting to work, and most Americans are seeing a similar savings. A survey done by a company called Upwork shows the average American has saved about $2,000 since March by also not commuting to work.

“The total savings since March comes out to $90 billion,” said Adam Ozimek, the chief economist at Upwork.

“In the long run, the money you save on this is the money you spend elsewhere,” added Ozimek. "What we know from the survey is it consumers are generally spending more online. They are spending more at grocery stores. They are spending more those way and also are saving more."

A new poll by the National Opinion Research Center shows 45 percent of Americans are putting the money saved on commuting into their personal savings, while 26 percent are paying down debt at a faster rate than Americans did pre-pandemic.

Long term, as more employers signal remote work as a more permanent way to work, economists believe the money saved commuting will be put towards things like people eating out more and traveling. Both would help struggling sectors of the economy and industries struggling the most right now.

As for Kelly, he’s been spending his commute savings on home-improvement projects.