They thought the work-from-home revolution that took place during the pandemic lockdowns would come to an end when the crisis was over.
They were wrong.
Fully 28% of U.S. workdays are now spent working from home, quadruple the rate before the pandemic, according to a new report, and that figure rises above 40% in metropolitan areas like parts of New York. The study was published by the nonprofit National Bureau of Economic Research.
Just 59% of workers are now going into the office or the workplace five days a week, while most of the rest are going in some of the time, the report says. Three days in the office, with workers going in Tuesdays through Thursdays and working from home on Mondays and Fridays, is emerging as the new normal.
CEOs say they expect the proportion of their staff who work from home will rise, not fall, over the next five years.
The paper, titled “The Evolution of Work From Home,” was written by economists Jose Maria Barrero from the Instituto Tecnologico Autonomo de Mexico, Nicholas Bloom from Stanford University and Steve Davis from 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.
They’re also good news for companies that want to keep wages down, because the shift to remote work makes it easier to hire workers in areas with a lower cost of living and to pay them less.
But the findings are less good for some other groups.
Working from home raises the risks associated with isolation for residents of single-person households, which make up 29% of all U.S. households. Although some of those people are older and already retired, many others are working age.
It is also less good for people who earn less and have smaller homes, with less space for dedicated home offices.
The findings highlight some ongoing economic challenges and are likely raise a host of related fears. Big U.S. cities have seen small businesses close and crime rates rise in their downtown areas since the start of pandemic, as a core of higher-wage office workers stopped coming in five days a week.
Downtowns are no longer the ghost towns they were two or three years ago, but many are still struggling. In cities with 1.5 million or more workers, foot traffic had recovered to only 60% of its prepandemic levels by late last year, recent research has found.
With a depleted office class, cities could potentially face the kind of death spiral seen in the 1960s and ’70s, when crime rates increased. It was not until the late 1990s that they started to recover.
Many economists also fear that the number of empty office buildings will lead to a wave of real-estate bankruptcies — a subject that will be of interest to more than just those buildings’ owners and creditors if it starts to affect the rest of the economy.
Meanwhile, remote work may leave younger workers professionally stranded, without access to the networking, learning and mentoring that previous generations got while working full time in an office alongside older and more experienced colleagues.
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 effects on businesses, the economy or society at large.
Intriguingly, the trend toward remote work is not as great in economically advanced countries in Asia, such as Japan, South Korea and Taiwan. The study authors say this may be because those countries went through less draconian long-term lockdowns than some Western countries.
A 2022 study of car companies’ job postings for engineering positions found that none of Tesla’s
jobs offered a work-from-home option, while 45% of Honda’s
23% of GM’s
and 8% of Ford’s
offered such an option. We will find out in due course which of them got it right.
Now read: UAW strike sets the stage for the 4-day work week — and a win could take it mainstream
And: Retirement plan derailed: Will you be among the 40% forced to stop working earlier than expected?