They thought the work-from-home revolution that took place during the Covid lockdowns would come to an end when the crisis was over.
They were wrong.
An astonishing 28% of American workdays are now spent working from home, quadruple the rate from before the pandemic, a startling new report reveals. And that figure rises above 40% in the most crowded city areas like parts of New York, adds the study, published by the authoritative National Bureau of Economic Research.
Just 59% of workers are now going into the office or workplace five days a week, while most of the rest only go in part time, the report says. The 3-day week, where workers go in Tuesdays through Thursdays but work Mondays and Fridays at home, is emerging as the new normal.
And CEOs say they expect the amount of their staff who work from home will rise, not fall, over the next five years.
The paper, entitled “The Evolution of Work From Home,” was written by economists Jose Maria Barrero from the Instituto Tecnologico Autonomo de Mexico, Nicholas Bloom of Stanford University, and Steve Davis of Stanford’s Hoover Institution.
The findings are great news for workers who have big houses, live in nice neighborhoods with strong social bonds, and who have, or had, long commutes into their offices.
They are also good news for companies that want to keep down wages, because the shift to remote work makes it easier to shift more jobs to lower-wage workers in lower cost-of-living areas.
But the findings are less good for other groups.
Working from home raises the risks of isolation for residents of single-person households. Those account foe 29% of all U.S. households, and while some of those will be elderly many others will be of working age.
It is also less good for people who earn less and have smaller homes, with less space for generous home offices and possibly less amiable surroundings.
And the findings will raise a host of economic fears and challenges. Big U.S. cities have seen a collapse of small businesses and a sharp rise in crime since the pandemic, as a core of higher-wage office workers stopped coming in.
Big city downtowns are no longer ghost towns, as they were 2 or 3 years ago, but many are still struggling. In cities with 1.5 million or more workers, foot traffic by late last year had recovered to only 60% of its prepandemic levels, recent research has found.
With a depleted office class, cities could potentially face the kind of death spiral seen in the 60s and 70s, when crime rates spiraled. It took until the late 1990s before they started to recover.
Many economists also fear a wave of real estate bankruptcies from newly-deserted office buildings — a subject only of interest to their owners and creditors, unless or until it starts to affect the rest of the economy.
Meanwhile remote work may leave younger workers stranded, without the networking, learning and mentoring that previous generations got from working full time in an office with older and more experienced employees.
Research so far suggests that working from home has been better for productivity, including research and collaboration, than many had feared. But it is far too early to draw any conclusions about the long-term impacts, on businesses, the economy, or society at large,
Intriguingly the trend to remote work has not been matched in the economically advanced countries of Asia, such as Japan, South Korea and Taiwan. The authors argue that this may be because those countries went through less draconian long-term lockdowns in the West.
In a curious datum, a recent (2022) study of car companies’ job postings for engineering positions found that 0% of Tesla’s
TSLA,
jobs offered work from home option while Honda
HMC,
offered 45%. (General Motors was in the middle at 23%, while Ford was 8%). We will find out in due course which one of them got it right.
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