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Is remote work here to stay?

Sabri Ben-Achour, Chris Farrell, and Erika Soderstrom Feb 13, 2023
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Marketplace's Chris Farrell discusses the future of work and who stands to benefit the most from it. Ilona Titova via Getty Images

Is remote work here to stay?

Sabri Ben-Achour, Chris Farrell, and Erika Soderstrom Feb 13, 2023
Heard on:
Marketplace's Chris Farrell discusses the future of work and who stands to benefit the most from it. Ilona Titova via Getty Images
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Work from home was one of the biggest labor market experiments in decades. Driven by the pandemic, the key question is – will the work from home option stick even as the worst of the pandemic is, hopefully, behind us?

Recent experience and research suggests the benefits of remote work are compelling enough that there’s no going back, says Marketplace’s senior economics contributor, Chris Farrell.

“Here’s the thing, remote work is here to stay because it pays,” explained Farrell in an interview with Marketplace’s Sabri Ben-Achour.

The following is an edited transcript of their conversation.

Sabri Ben-Achour: So let’s start with what we’ve seen from companies recently. There’s been a wave of recent announcements, mainly from bigger companies, mandating that workers have to come back to the office, which has been happening all year long. But how pervasive has that been? And how’s that working out?

Chris Farrell: It’s been very pervasive. It’s not working out that well. I mean, it’s come back to work but: Disney’s management, four days a week, Apple’s management, three days a week. Now, these managements are not saying you must come in five days a week. Managements have largely accepted hybrid work. And in practice, you know, the reality is, workers often ignore this, “Let’s return to the good old days,” mandate.

Ben-Achour: You know, one reason given for why that works, why employees have held their ground on work from home is because companies are desperate for workers and labor market’s really tight. If, and obviously this is a big if, but if we get another recession and the labor market sinks, is power going to shift back to the companies? And are we going all have to trot back into the office more?

Farrell: Here’s the thing, remote work is here to stay because it pays. I mean, this is the key takeaway from a recent study by a team of economists and the scholars in “Time Savings When Working from Home,” it draws on data from 27 countries, and they find average daily time savings from not commuting to work is 72 minutes. There’s a range there from 55 minutes in the U.S. to 100 minutes in Japan. And the scholars estimate work from home will save about one hour per week, per worker, after the pandemic ends.

Who reaps the benefits?

Ben-Achour: Yeah, I mean, employees obviously get flexibility. But I mean, what do employers really get out of being more relaxed about remote work?

Farrell: Cost savings, it’s a big thing. You know, remote workers might be willing to work for lower pay, reflecting the value that’s put on to the benefit. Economists have documented that look, remote workers are productive workers, so employers should relax. And remote work should help management retain employees, which is a really valuable cost savings in a tight labor market. So that said, you know, this option to work from home one to three days a week, it’s really popular with all employees, but the main beneficiaries in this post pandemic economy are going to be the better educated and better paid workers.

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