The remote-work debate rages on into its third year.
Elon Musk may claim that remote workers are pretending to do their jobs, but residents of New York City and San Francisco can tell you that there’s just no going back to the before-times of the five-day commute.
And bosses—particularly boomers—remain steadfast supporters of returning to the office, despite the fact that just about all employees want to work from home at least some of the time. Slack’s latest Future Forum survey installment showed a clear divide between managers 50 and above, who really don’t like remote work, and younger ones, who are frankly pretty chill about the whole thing.
Fans of Top Gun: Maverick and the Minions can even tell you that Americans are eager to go back to the movies in record-breaking numbers, but they’re just not going back to the office.
As Fortune reported earlier this week, this has even shown up in an odd new form of “digital presenteeism,” with knowledge workers spending over an hour doing menial tasks just to prove to their bosses they’re actually, you know, working.
As it turns out, not only are remote workers adding an extra day of digital busy work to their routines, they’re getting even better results when they do their real jobs, too. The data doesn’t lie. The work-from-home cohort has actually been fueling the country’s economic growth since the pandemic hit.
Here’s a look at the surprising results of productivity from remote and non-remote workers.
First off, the economy is growing, led by a somewhat mysterious surge in productivity during the pandemic. A brief but terrifying pandemic recession became a period of productivity that now shows signs of overheating, as demand outstrips supply so much that inflation is running at a 40-year high.
No less an authority than the National Bureau of Economic Research (NBER), whose work in the 1940s gave rise to the very concept of gross domestic product, is on the case. In a recent paper, it found that the positive pandemic-era productivity growth “can be entirely explained by a surge in the performance of work-from-home service industries.”
Productivity in businesses utilizing “work-from-home services” have grown from 1.1% between 2010 and 2019 to 3.3% since the pandemic began, according to the working paper, titled “A New Interpretation of Productivity Growth Dynamics in the Pre-Pandemic and Pandemic Era U.S. Economy.”
On the other hand, growth in industries such as mining and manufacturing have remained the same. Industries relying on in-person contact—like transportation, dining and hospitality—which the researchers call “contact services” went from growth of 0.6% between 2010 and 2019, to actually shrinking 2.6% since the pandemic hit.
“While output and employment dropped everywhere, they declined at a much faster rate in the sectors where labor productivity and wages are relatively low,” the study’s authors, Robert Gordon and Hassan Sayed, professors at Northwestern and Princeton respectively, wrote.
They pointed to a “relatively large” drop in employment for workers in low-paid industries, like brick-and-mortar retail trade, leisure and food service, and a relative increase in the employment of workers who could continue working, at home, in higher-paid industries like finance and IT.
There was only a 0.2% cumulative productivity growth rate between 2020 and 2022, Gordon and Sayed write. This indicates that industries with low productivity levels—they give accommodation, food service and retail as examples—experienced slower cumulative productivity growth during the pandemic than did the high-productivity industries: finance, insurance, or IT.
Future looks … the same
There’s one problem with the productivity picture when looking ahead as to what comes next. The economy is slowing down—a lot. CEOs and economists are warning about the increasingly looming specter of a recession, with some even forecasting it happening this year.
The NBER researchers nonetheless anticipate a timely rebound. “Since the economy is still evolving, the length of the post-2020 recovery period is currently uncertain, but is clearly much shorter than in 2009-16,” they wrote.
The phenomenon of increased productivity growth in work-from-home services, the researchers conclude, dovetails with the monthly findings of professors Nick Bloom, Jose Barrero and Steven Davis, who lead the WFH Research project.
In one of their 2021 survey installments, 30,000 respondents reported that their WFH productivity averaged 7.1% higher than their expectations. While expectations are ambiguous, Gordon and Sayed wrote, “it seems natural to interpret this as productivity as experienced previously in the office.”
To that point: 48% percent of WFH Research respondents reported being more productive at home than at the office, and 21% reported being 20 or more percent more productive.
Only 14% reported being less productive; all the more reason to stay home for good.
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