Workplace Culture

Work-from-home benefits may not outweigh long-term costs

Meghan McCarty Carino Mar 22, 2021
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Harvard business professor Chris Stanton said even a minor increase in working from home after the pandemic could add up to billions of dollars a year for workers. vgajic via Getty Images
Workplace Culture

Work-from-home benefits may not outweigh long-term costs

Meghan McCarty Carino Mar 22, 2021
Heard on:
Harvard business professor Chris Stanton said even a minor increase in working from home after the pandemic could add up to billions of dollars a year for workers. vgajic via Getty Images
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It’s still not clear whether remote work will remain widespread when the worst of the pandemic recedes. Many companies and workers have discovered the benefits of these more flexible work arrangements, but new analysis from the National Bureau of Economic Research shows the costs can add up.

Before the pandemic, Chris Oliver’s three-bedroom house outside Nashville, Tennessee, was already feeling cozy with a 7-year-old, mother-in-law, wife and new baby all under one roof. But when work went remote, things got even more cramped.

“We’re stuck with each other all day long,” Oliver said. “I wake up, I go 3 feet to my desk, which is 3 feet away from my wife’s desk.”

And that’s all in their bedroom. They’ve started looking for a new bigger place.

“We really need to do it,” Oliver said. “We need a room for an office, at least for one of us if not both of us.”

But that kind of space is pricey, and many would-be work-from-home long-termers are discovering the benefits might not outweigh the costs.

Anita White is a lawyer in Fort Lauderdale, Florida, who would like to upgrade from her one-bedroom condo where she now works at her kitchen table.

“I’ve saved money not going into the office,” White said. “I’ve saved gas, I’ve saved parking, I’ve saved on clothes, makeup. But I haven’t saved $200,000.”

That’s how much White said she’d have to spend to get a big enough place in her area.

Chris Stanton, a Harvard business professor, analyzed the costs of remote work before the pandemic.

“Households that had one or more members who were working remotely tended to occupy larger dwellings,” Stanton said. “That probably meant that households were actually spending out of their own pockets for home office space.”

In fact, up to 10% more. Stanton said even a minor increase in working from home after the pandemic could add up to billions of dollars a year for workers.

“You need to line up the potential savings for firms with the additional expense that will be shouldered by households who might need to buy or rent bigger dwellings,” Stanton said.

That burden falls harder on workers who already spend a larger share of their salaries on housing. Patrick Ford wants to upgrade from a studio apartment to a two-bedroom, a move he figures will almost double his housing costs.

“At this point, I’m kind of at my wit’s end of living in a small box, and basically never leaving work,” Ford said.

He works in IT in Boston, where he had sacrificed space to be close to the office and urban amenities. His company is looking at a hybrid model of remote and in-person work for the future, which puts him in a tough position now that his lease is up and he’s looking to move.

“If there was no expectation of ever going into the office again, then, you know, I’d probably be looking at New Hampshire or Maine,” Ford said.

But with so much uncertainty, he’ll probably just be looking for a bigger, more expensive apartment.

COVID-19 Economy FAQs

What do I need to know about tax season this year?

Glad you asked! We have a whole separate FAQ section on that. Some quick hits: The deadline has been extended from April 15 to May 17 for individuals. Also, millions of people received unemployment benefits in 2020 — up to $10,200 of which will now be tax-free for those with an adjusted gross income of less than $150,000. And, for those who filed before the American Rescue Plan passed, simply put, you do not need to file an amended return at the moment. Find answers to the rest of your questions here.

How long will it be until the economy is back to normal?

It feels like things are getting better, more and more people getting vaccinated, more businesses opening, but we’re not entirely out of the woods. To illustrate: two recent pieces of news from the Centers for Disease Control. Item 1: The CDC is extending its tenant eviction moratorium to June 30. Item 2: The cruise industry didn’t get what it wanted — restrictions on sailing from U.S. ports will stay in place until November. Very different issues with different stakes, but both point to the fact that the CDC thinks we still have a ways to go before the pandemic is over, according to Dr. Philip Landrigan, who used to work at the CDC and now teaches at Boston College.

How are those COVID relief payments affecting consumers?

Payments started going out within days of President Joe Biden signing the American Rescue Plan, and that’s been a big shot in the arm for consumers, said John Leer at Morning Consult, which polls Americans every day. “Consumer confidence is really on a tear. They are growing more confident at a faster rate than they have following the prior two stimulus packages.” Leer said this time around the checks are bigger and they’re getting out faster. Now, rising confidence is likely to spark more consumer spending. But Lisa Rowan at Forbes Advisor said it’s not clear how much or how fast.

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