There is an underlying attitude on work from home that I've noticed seems to dominate peoples opinions on it.
1) Work is for work and the goal of work is to earn money to have more time at home.
2) Work is an integral part of my human person.
Either because of how I was raised or temperament I'm in the #1 bucket. I enjoy being good at my job and think about it and occasionally talk about it with my wife, but at the end of the day its just some stuff I do for money to spend time with my family.
By contrast a lot of other people talk about their "work family" and "bring their whole self to work".
This extends to many spheres. I don't think romantic relationships should be allowed at work at all (not consensual ones, not any ones, its work!). I see no conflict with "don't say gay" bills because I don't think teachers should be talking about their personal lives at work (gay or straight). But I've seen other people have a vehement position in the other direction, and I think a lot of it has to do with peoples opinions of what the relation between work and personal life should be.
In general WFH benefits those with rich family lives the most. Work in the office benefits those that either don't have a family life (young singles) or have prize positions at work they find enjoyable (executives).
I'm a huge booster of WFH as well. I don't buy the productivity decrease from it, but even if true I think the well being increase is vast. It's also one of the few "eugenic" experiments we've seen (professionals have more kids when they can work from home).
I also think the fact that WFH was imposed rather then planned is part of why some people dislike it (and obviously they must be right in some contexts).
What I have noticed is that high paying jobs are getting laid off while low paying jobs are in high demand. This is probably easy to brush off if you think of it as "Facebook", but my best friend is also a robotic engineer and his entire sector is in decline (he got laid off by amazon). If my friend reaches the point where he's hawking Rita's then something is definitely happening in the economy.
Maybe there is something else going on. People had a lot of paper wealth. They felt they could use that paper wealth to buy goods and services way into the future (I'm especially thinking of retiring baby boomers). However, now we are finding out that those goods and services are going to be a lot more expensive then we thought (inflation) and the paper wealth isn't worth what we thought. So it turns out "assets" are worth less relative to "hard labor". And in many cases the worth ratio of "high end labor" vs "concrete labor" isn't as favorable for high end labor (a lot of high end labor is tied up in the value of assets).
This would tell a story of how the Fed and government created a lot of money during the pandemic, made everyone feel richer, and then when the lockdown ended it turned out that the money couldn't actually buy the goods and services we wanted which all got bid up. It would also indicate that a lot of the jobs created during the pandemic, just like other assets, weren't worth as much as people thought at first.
Despite some high profile silicon valley layoffs, I'm skeptical demand for tech workers or high wage workers is down, especially the high paying ones. That said, I wouldn't be at all surprised if job growth on the low wage end is way higher.
I don't know why you think paper wealth is down. SP500 is down less than 10% from peak but higher than anytime more than 2 years ago. If discounted for inflation, higher than anytime more than 3 years ago.
Maybe people have less stimulus money in their pockets but federal spending still seems massively expansionary to me. Anecdotally, the Fed lab I worked for is flooded with money.
Long live WFH! What's missing from the productivity discussion is that remote employees will accept lower wages, and may stay longer (less turnover). In other words WFH is an in-kind benefit.
My company has been WFH for more than 10 years. Hugely reduced overhead/office footprint, we get paid 30% below market rate to do the same work. Sorts for people who have kids or want to live outside major cities (cheaper housing). It also cut down on pointless meetings, since calls tend to be shorter. I can't speak to measured productivity, but employee tenure is extremely long. Mitigate the downside of lack of interpersonal and team spirit with 1-2 team on-sites per year. Caveat, we don't do much creative work (it's tech operations).
Huh. That's the first I've heard that. My anecdotal info might be misleading but maybe you should check the job market. My kids both went remote with the pandemic. They later changed jobs and got big pay raises. A mostly remote spouse got a promotion and a big pay raise. Other spouse works on site (asst prof). I know others working remote for what doesn't seem at lower rates.
"In one survey, 77 percent of workers said that they were more productive out of the office. Early research in 2020 indicates that working at home resulted in productivity gains of about 13 percent."
This is the exact same thing that most of our employees said in early 2020 (context: 25 people company, engineering and IT). In fact some of them were pretty open about making an effort to work better/more than before in order to "prove" that WFH works.
The problem with making that special effort is that it's not sustainable in the long run. By the end of 2020 we could measure the fall in productivity compared to 2019, and that became our new productivity level until today.
I'd argue even the new method overstates inflation because it doesn't fully account for the gain from new products. I've seen surveys where a majority of economists agree, whatever that's worth. I wonder if Kling agrees with Russ Roberts on this.
With respect the first link is written by someone I do not trust after reading "Barclay Palmer held senior editorial roles with leading global news and media outlets, including CBS, CNN, Thomson Reuters, Bloomberg, PBS, and Newsweek."
Bill Bonner once said people always think what they are paid to think.
There is not enough information with link 2 for me to have any opinion on the contents.
Link 3 is from a low quality textbook and mainstream economics is generally a load of bullshit, guesses on top of a big pile of assumptions and guesswork.
Link 4 does not provide enough information on the authors or funding sources so again I cannot make any conclusions from this.
I know that everytime I go shopping in the UK everything is flying up, 20% to 40% is probably closer than the government issued number.
I'm listening to Tim Urban's new book. It's a hoot. I learned a bit about Republicans, especially Goldwater, but I just listened to the chapter where he shreds who he calls "social justice fundamentalists." Anyway, the part that seems relevant here is that the power of dogma is it can't be proven wrong.
Maybe you used the wrong word, IDK. I'd think working from home would be terrible for an introvert. An introvert who generally likes people might have a hard time maintaining any interaction. The office makes it easier to be social. It could be great for someone who doesn't like people though.
Interesting. Your grasp of introversion is better than mine, or at least mine of 3 years ago.
When I was a kid, "introverted" was an epithet, basically used as a synonym for "antisocial." "Introvert who generally likes people" would have been scorned as an oxymoron. But it's actually a pretty good description of me.
I'm not at all certain what I said is correct. If it is correct I'm not sure introversion is the right word for it. But the opposite seems true. Extroverted people seem to be able to make friends more easily.
When everyone worked at home all the time, productivity was up. I basically people just sort of worked all the time - there was no distinction between home and office. All times were work times.
Then everyone switched to hybrid - I'm 3 days/week in the office and 2 days/week at home. In this sort of schedule it's hard not to slide into thinking of home days as non-work days, reducing productivity.
It seems to me very plausible that fully-remote work would increase productivity but this hybrid stuff would decrease it.
People like work from home. People know the best way to continue to WFH is to convince employers they are more productive. The best way to do that is to say they are more productive on surveys. I look at twitter and facebook and think they probably evaluated “lines of code” and determined programmers were lying about productivity.
I don’t know if your explanation of productivity is right, but I liked it and would like to believe it is true. It reminded me of Frederic Bastiat. Your post is a good reminder that just because we can measure something, it does not mean it’s important.
I think it's a very fulfilling experience of the social connections made while at work, not at home, at work. And I have a beef with your assisment that employers don't enjoy the commute to job site and also don't enjoy rubbing elbows with the employees. What! Is this a social status thing you are referring to. Some cast society thing! To me the employees make the company a success. It's a team effort. If the boss is uncomfortable being on site with the team than I don't want to be on his team.
I have no evidence for this, but anecdotally it feels like we are shifting our consumption patterns to focus more on low productivity goods. Young people want bespoke items and “experiences”. Instead of owning a car, they take Uber and have doordash deliver food. Old people need health care, and also seem to be spending retirement money on experiences. And as the upper middle class expands among families, even they can afford more luxury goods, like produce grown on a small farm down the road. I hear even travel agents are making a comeback. These are things where labor is a much higher fraction of the cost. Measured GDP can be a lot higher with lot lower employment when everything you buy is cheap and mass-produced.
Perhaps my anecdotes don’t add up to much, but I think the phenomenon is real.
WFH is often a selfish attitude. Preferred days are Friday and Monday, employees don’t consider how inefficient is the communication and how career developments are impaired. We also have a synthetic WFH, I.e. people participating to meetings via Team despite being in the office! I am not advocating for 100% in the office but same goes for 100% WFH. And Mr Kling, if we don’t have to doubt employment figures then we are left with a simple division that leads to lower productivity (and if the current divergence between GDP and GDI will resolve towards a lower GDP then the productivity drop will be even worse). If WFH was such a panacea companies would have adopted that practice way earlier. Add the texting on mobiles, a look at socials and people work way less then they should or are paid for.
As far as the boss is concerned, WFH being good or bad can be viewed through the same metrics that the boss used to evaluate workers when they were all in the office: is work getting done on time; goals being met; and customer satisfaction no less than it had been before Covid/WFH? Is yes to all the foregoing, the issue is more about the boss feeling in control.
The quotes from the Alison Schrager article don't really support the point being made. The evidence presented is very weak and the 13% figure is linked to an article where the author is specifically saying they are very worried about productivity during the pandemic because working at home with kids and other family there is very different to the conditions of their experiments.
That said I agree with Arnold that the technology that allows working from home is a net boon. Anything that gives more options and freedom will do this almost by definition. Though many office workers seem to now regard it as a right where more realistically it right in some circumstances and not others.
If everyone is returning to the office, as the tech people to whom you obliquely refer claim, why are default rates for CMBS rising? Market signals mean something. Anecdotes, not so much. I'd ask the same question of Allison Schrager, to whose piece you link. Economists and tech pundits seem not to understand financial markets very well.
There is an underlying attitude on work from home that I've noticed seems to dominate peoples opinions on it.
1) Work is for work and the goal of work is to earn money to have more time at home.
2) Work is an integral part of my human person.
Either because of how I was raised or temperament I'm in the #1 bucket. I enjoy being good at my job and think about it and occasionally talk about it with my wife, but at the end of the day its just some stuff I do for money to spend time with my family.
By contrast a lot of other people talk about their "work family" and "bring their whole self to work".
This extends to many spheres. I don't think romantic relationships should be allowed at work at all (not consensual ones, not any ones, its work!). I see no conflict with "don't say gay" bills because I don't think teachers should be talking about their personal lives at work (gay or straight). But I've seen other people have a vehement position in the other direction, and I think a lot of it has to do with peoples opinions of what the relation between work and personal life should be.
In general WFH benefits those with rich family lives the most. Work in the office benefits those that either don't have a family life (young singles) or have prize positions at work they find enjoyable (executives).
I'm a huge booster of WFH as well. I don't buy the productivity decrease from it, but even if true I think the well being increase is vast. It's also one of the few "eugenic" experiments we've seen (professionals have more kids when they can work from home).
I also think the fact that WFH was imposed rather then planned is part of why some people dislike it (and obviously they must be right in some contexts).
What I have noticed is that high paying jobs are getting laid off while low paying jobs are in high demand. This is probably easy to brush off if you think of it as "Facebook", but my best friend is also a robotic engineer and his entire sector is in decline (he got laid off by amazon). If my friend reaches the point where he's hawking Rita's then something is definitely happening in the economy.
Maybe there is something else going on. People had a lot of paper wealth. They felt they could use that paper wealth to buy goods and services way into the future (I'm especially thinking of retiring baby boomers). However, now we are finding out that those goods and services are going to be a lot more expensive then we thought (inflation) and the paper wealth isn't worth what we thought. So it turns out "assets" are worth less relative to "hard labor". And in many cases the worth ratio of "high end labor" vs "concrete labor" isn't as favorable for high end labor (a lot of high end labor is tied up in the value of assets).
This would tell a story of how the Fed and government created a lot of money during the pandemic, made everyone feel richer, and then when the lockdown ended it turned out that the money couldn't actually buy the goods and services we wanted which all got bid up. It would also indicate that a lot of the jobs created during the pandemic, just like other assets, weren't worth as much as people thought at first.
Despite some high profile silicon valley layoffs, I'm skeptical demand for tech workers or high wage workers is down, especially the high paying ones. That said, I wouldn't be at all surprised if job growth on the low wage end is way higher.
I don't know why you think paper wealth is down. SP500 is down less than 10% from peak but higher than anytime more than 2 years ago. If discounted for inflation, higher than anytime more than 3 years ago.
Maybe people have less stimulus money in their pockets but federal spending still seems massively expansionary to me. Anecdotally, the Fed lab I worked for is flooded with money.
Long live WFH! What's missing from the productivity discussion is that remote employees will accept lower wages, and may stay longer (less turnover). In other words WFH is an in-kind benefit.
My company has been WFH for more than 10 years. Hugely reduced overhead/office footprint, we get paid 30% below market rate to do the same work. Sorts for people who have kids or want to live outside major cities (cheaper housing). It also cut down on pointless meetings, since calls tend to be shorter. I can't speak to measured productivity, but employee tenure is extremely long. Mitigate the downside of lack of interpersonal and team spirit with 1-2 team on-sites per year. Caveat, we don't do much creative work (it's tech operations).
Huh. That's the first I've heard that. My anecdotal info might be misleading but maybe you should check the job market. My kids both went remote with the pandemic. They later changed jobs and got big pay raises. A mostly remote spouse got a promotion and a big pay raise. Other spouse works on site (asst prof). I know others working remote for what doesn't seem at lower rates.
"In one survey, 77 percent of workers said that they were more productive out of the office. Early research in 2020 indicates that working at home resulted in productivity gains of about 13 percent."
This is the exact same thing that most of our employees said in early 2020 (context: 25 people company, engineering and IT). In fact some of them were pretty open about making an effort to work better/more than before in order to "prove" that WFH works.
The problem with making that special effort is that it's not sustainable in the long run. By the end of 2020 we could measure the fall in productivity compared to 2019, and that became our new productivity level until today.
Mainstream economics is absolute bullshit. For starters the inflation rate we are told is around 1/2 of the actual real number.
For the truth http://www.shadowstats.com/alternate_data/inflation-charts
As GDP is adjusted for inflation that number is also bullshit, so when you hear 1% growth in GDP, that actually means around minus 2%.
Despite what we have been told the world has been in the greatest and longest depression ever. Since 2000 there has been no growth whatsoever!
On the other hand...
https://www.investopedia.com/articles/07/consumerpriceindex.asp
I'd argue even the new method overstates inflation because it doesn't fully account for the gain from new products. I've seen surveys where a majority of economists agree, whatever that's worth. I wonder if Kling agrees with Russ Roberts on this.
https://www3.nd.edu/~cwilber/econ504/504book/outln13b.html#:~:text=The%20CPI%20overstates%20increases%20in,in%20response%20to%20price%20changes.
https://www.dummies.com/article/business-careers-money/business/economics/inflation-usually-overestimated-228118/
http://www.quickmba.com/econ/macro/cpi/#:~:text=CPI%20Biases,to%20substitute%20lower%2Dpriced%20alternatives.
With respect the first link is written by someone I do not trust after reading "Barclay Palmer held senior editorial roles with leading global news and media outlets, including CBS, CNN, Thomson Reuters, Bloomberg, PBS, and Newsweek."
Bill Bonner once said people always think what they are paid to think.
There is not enough information with link 2 for me to have any opinion on the contents.
Link 3 is from a low quality textbook and mainstream economics is generally a load of bullshit, guesses on top of a big pile of assumptions and guesswork.
Link 4 does not provide enough information on the authors or funding sources so again I cannot make any conclusions from this.
I know that everytime I go shopping in the UK everything is flying up, 20% to 40% is probably closer than the government issued number.
I have written a longer piece here;
https://wakeuppeople.substack.com/p/mainstream-economics-is-now-100-propaganda
As a grumpy old cynic I never believe a single thing the government says, and so far I have never been proved wrong!
I'm listening to Tim Urban's new book. It's a hoot. I learned a bit about Republicans, especially Goldwater, but I just listened to the chapter where he shreds who he calls "social justice fundamentalists." Anyway, the part that seems relevant here is that the power of dogma is it can't be proven wrong.
People think economics is science but it is a branch of statistics and they can be used to "prove" whatever you set out to "prove" in the first place!
Economics is a "social science", which isn't really science.
99% is banking propoganda!
For me, working from home was a significant _decrease_ in wellbeing. And I am about as strong an introvert as there is.
Maybe you used the wrong word, IDK. I'd think working from home would be terrible for an introvert. An introvert who generally likes people might have a hard time maintaining any interaction. The office makes it easier to be social. It could be great for someone who doesn't like people though.
Interesting. Your grasp of introversion is better than mine, or at least mine of 3 years ago.
When I was a kid, "introverted" was an epithet, basically used as a synonym for "antisocial." "Introvert who generally likes people" would have been scorned as an oxymoron. But it's actually a pretty good description of me.
I'm not at all certain what I said is correct. If it is correct I'm not sure introversion is the right word for it. But the opposite seems true. Extroverted people seem to be able to make friends more easily.
I have a bit of a contrarian take on this.
When everyone worked at home all the time, productivity was up. I basically people just sort of worked all the time - there was no distinction between home and office. All times were work times.
Then everyone switched to hybrid - I'm 3 days/week in the office and 2 days/week at home. In this sort of schedule it's hard not to slide into thinking of home days as non-work days, reducing productivity.
It seems to me very plausible that fully-remote work would increase productivity but this hybrid stuff would decrease it.
People like work from home. People know the best way to continue to WFH is to convince employers they are more productive. The best way to do that is to say they are more productive on surveys. I look at twitter and facebook and think they probably evaluated “lines of code” and determined programmers were lying about productivity.
I don’t know if your explanation of productivity is right, but I liked it and would like to believe it is true. It reminded me of Frederic Bastiat. Your post is a good reminder that just because we can measure something, it does not mean it’s important.
I think it's a very fulfilling experience of the social connections made while at work, not at home, at work. And I have a beef with your assisment that employers don't enjoy the commute to job site and also don't enjoy rubbing elbows with the employees. What! Is this a social status thing you are referring to. Some cast society thing! To me the employees make the company a success. It's a team effort. If the boss is uncomfortable being on site with the team than I don't want to be on his team.
Cheers
I have no evidence for this, but anecdotally it feels like we are shifting our consumption patterns to focus more on low productivity goods. Young people want bespoke items and “experiences”. Instead of owning a car, they take Uber and have doordash deliver food. Old people need health care, and also seem to be spending retirement money on experiences. And as the upper middle class expands among families, even they can afford more luxury goods, like produce grown on a small farm down the road. I hear even travel agents are making a comeback. These are things where labor is a much higher fraction of the cost. Measured GDP can be a lot higher with lot lower employment when everything you buy is cheap and mass-produced.
Perhaps my anecdotes don’t add up to much, but I think the phenomenon is real.
That sounds right to me too yet I have doubts I can't explain. Maybe we just need someone to tell a good counter story.
WFH is often a selfish attitude. Preferred days are Friday and Monday, employees don’t consider how inefficient is the communication and how career developments are impaired. We also have a synthetic WFH, I.e. people participating to meetings via Team despite being in the office! I am not advocating for 100% in the office but same goes for 100% WFH. And Mr Kling, if we don’t have to doubt employment figures then we are left with a simple division that leads to lower productivity (and if the current divergence between GDP and GDI will resolve towards a lower GDP then the productivity drop will be even worse). If WFH was such a panacea companies would have adopted that practice way earlier. Add the texting on mobiles, a look at socials and people work way less then they should or are paid for.
As far as the boss is concerned, WFH being good or bad can be viewed through the same metrics that the boss used to evaluate workers when they were all in the office: is work getting done on time; goals being met; and customer satisfaction no less than it had been before Covid/WFH? Is yes to all the foregoing, the issue is more about the boss feeling in control.
As to the sausage factory, could not agree more.
The quotes from the Alison Schrager article don't really support the point being made. The evidence presented is very weak and the 13% figure is linked to an article where the author is specifically saying they are very worried about productivity during the pandemic because working at home with kids and other family there is very different to the conditions of their experiments.
That said I agree with Arnold that the technology that allows working from home is a net boon. Anything that gives more options and freedom will do this almost by definition. Though many office workers seem to now regard it as a right where more realistically it right in some circumstances and not others.
If everyone is returning to the office, as the tech people to whom you obliquely refer claim, why are default rates for CMBS rising? Market signals mean something. Anecdotes, not so much. I'd ask the same question of Allison Schrager, to whose piece you link. Economists and tech pundits seem not to understand financial markets very well.