I estimate that the loss of their physical presence slashed total daily spending at city center restaurants, bars and shops by more than half. During the pandemic, the overwhelming share of employees who shifted to telecommuting previously worked in offices in cities. Growth of city centers are going to stall. What other impacts should we watch for in this transition to more remote work? They face bleak prospects if their skills and work experience erode during an extended shutdown and beyond. At the same time, those unable to work from home – either because of the nature of their jobs, or because they lack suitable space or internet connections – are being left behind. Our results show that more educated, higher-earning employees are far more likely to work from home – so they are continuing to get paid, develop their skills and advance their careers. Taken together, this is generating a time bomb for inequality. The remaining 35 percent have such poor internet at home – or no internet – that it prevents effective telecommuting. And only 65 percent of Americans reported having fast enough internet capacity to support workable video calls. More than half of those surveyed who are now working from home are doing so either in shared rooms or their bedrooms. Many Americans also lack the facilities or sufficient internet capacity to work effectively from home. They work in retail, healthcare, transport and business services, and need to see customers or work with products or equipment. The remaining (nearly) half cannot work remotely. Only 51 percent of the survey respondents – mostly managers, professionals and financial workers who can carry out their jobs on computers – reported being able to work from home at an efficiency rate of 80 percent or more. Of the dozens of firms I have talked to, the typical plan is that employees will work from home one to three days a week, and come into the office the rest of the time. A recent separate survey of firms from the Survey of Business Uncertainty that I run with the Atlanta Federal Reserve and the University of Chicago indicated that the share of working days spent at home is expected to increase fourfold from pre-COVID levels, from 5 percent to 20 percent. And working remotely is now extremely common, though under very challenging conditions, as I’ve written about earlier.Īnd a number of corporations are developing plans for more work-from-home options beyond the pandemic. The stigma associated with working from home prior to COVID-19 has disappeared. Why do you think working remotely is morphing into a more permanent reality? Working from home is not only economically essential, it is a critical weapon in our fight against COVID-19 – and future pandemics. The economy would have collapsed, forcing us to return to work, reigniting infection rates. Without this historic switch to working from home, the lockdown could never have lasted. How vital was the swift shift to working at home during the COVID crisis? gross domestic product based on their earnings, this enlarged group of work-from-home employees now accounts for more than two-thirds of U.S. More strikingly, if we consider the contribution to U.S. Almost twice as many employees are working from home as at work. And the remaining 26 percent – mostly essential service workers – are working on their business premises. About another 33 percent are not working – a testament to the savage impact of the lockdown recession. labor force now working from home full-time. We see an incredible 42 percent of the U.S. Now you’ve identified a new “working-from-home economy.” Why is that? We live in an information economy and a gig economy. And in a related SIEPR Policy Brief, he expands on his findings and offers policymakers and business leaders suggestions for making remote-work a permanent part of the labor landscape. Here, Bloom discusses the societal impacts of working from home and what his latest research reveals. Since the coronavirus crisis broke out, his 2014 study on working from home and ongoing research with other colleagues on business firms have been in high demand as policymakers and others scramble to better understand the shifting dynamics of the workforce and its economic implications. Eberle Professor of Economics in Stanford’s School of Humanities and Sciences and a senior fellow at the Stanford Institute for Economic Policy Research (SIEPR), focuses on labor economics, management practices and uncertainty. Results from several nationwide surveys Bloom has been conducting during the COVID-related economic shutdown provide a snapshot of the emerging new reality.īloom, who is the William D. Note: Significant changes are calculated at a 90-percent confidence level.Nicholas Bloom. Hide table Employment change by industry with confidence intervals, October 2022, seasonally adjusted, in thousands Industry
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