> Essentially, Daco adds, productivity has rebounded above its 2017-to-2019 norms, which he believes indicates that it’s “not just a quick bounceback,” but actually stronger than the prior trend—a positive development.
There's the quote that implies that return to office is not the explanation for this productivity rebound. Work from home is still far higher than it was in 2019, and so is productivity. While far from a smoking gun, this is more up to date evidence that execs who threatened to fire people who didn't RTO are as wrong as they seemed. The first executive who recants on their intuition that RTO would bring about an explosion of productivity above WFH will earn my respect.
My position isn't that every job that can be WFH should be, but that every person who wants to be WFH should be able to, and everyone who wants to work in an office should be able to. Even if working in an office is less productive, and costs the company a lot more money, and reduces the pool of talent, some employees still want it. Some executives do too: these people will be happier working together, so they should have that option.
IMO, there needs to be some kind of compensation for folks who have to go into office. Not all jobs can be WFH. At a minimum, if you have to travel in to work, that time should be paid/count towards 40.
EDIT: On average, WFH folks save 5 hours a week by not having commute. That means folks going into a workplace work 5 hours more. That's not even including all of the other perks/flexibility/cost savings WFH provides.
By staying home and giving up my office, I am taking on the cost burden of the work facilities (office space, internet, etc). These were previously paid by the employer and are now paid by me. I should be compensated.
I might save money by not commuting, but that expense has NOT been transferred to my employer -- it's GONE. I saved that money and nobody has to pay for my commute now.
Even if my commute is only 15 minutes, I save probably 10 hours a week working from home because I can toss in the laundry while I work, walk the dog during a non-participatory meeting, load the dishwasher while I wait for a file to copy, etc. The amount of time I free up is absolutely insane. I can actually just be after work rather than doing chores.
They’d need to find a system that doesn’t encourage long commutes. If drive time counts toward the 40, an extreme case may try to live 4 hours from work. Drive in, have lunch, drive home.
People with short commutes would end up picking up the slack for those with long commutes, which could create some tension in the workplace. Why should those who are actually in the office working get compensated at the same rate as someone doing 20% less due to their shorter in-office work day?
I actually failed to understand this argument. Historically no body has a problem with this and it is always considered to be the employee’s responsibility (to commute to work.) Or is this not true?
If we think less about the asymmetry between employers and employees, and think they are 2 parties entering into an agreement, the employee also has to contribute something to their work. They are bringing in their expertise and availability, how that is achieved is a matter of agreement. If the agreement said your availability to be in the office is up to you, then you are free to optimize on your side how to optimally achieve this.
I have seen people choose to live far away in better condition, trading for longer commute time, and vice versa. Why should it not be your responsibility? Ie if employer pay for commute time and possibly cost, then the incentive for me is to live as far away as possible.
I think in general less people going to the office is better for those who have to go to the office as well. Less density of population, less competition for housing, less congestion on roads. The more offices that are in place, the more housing prices go up, the more congestion etc.
Sure, I'll live the farthest from the office in that case!
I mean I would have liked this too but it isn't realistic beyond what some companies have already been doing for years before covid, which is to pay for monthly public transit passes or towards the cost of it.
On the flipside it would mean companies limiting who is allowed to be in an office if that became mandatory. You live more than 15 min from the office? Sorry, WFH for you!
Factory job that absolutely can't be done WFH? You better come live in our communal housing where you have 5 min walk time to work or you are not getting that job!
There’s a different explanation on why WFH has increased productivity: it has expanded the labor pool available to employers beyond the geographic confines of workers within a ~ 1 hour physical commute. That is, employers and employees can more easily find mutually beneficially matches.
I think this is main factor driving increased productivity, not that WFH is inherently more productive.
Well, nobody is really comparing WFH to "in-office", as in employees having a physical office with a door, they're comparing it to open offices which is the worst possible option for software development.
I think that's generally what it means to be in-office at a software company. Having dedicated offices is exceptional, open floor plans are the rule. Note that this article isn't just talking about the software industry, though, so I take your point.
> There's the quote that implies that return to office is not the explanation for this productivity rebound. Work from home is still far higher than it was in 2019, and so is productivity.
...or maybe there's another factor, and this doesn't explain anything at all. Correlation does not imply causality.
We have LLMs now, we didn't have them in 2019, and productivity is up. Ergo, increased productivity must be caused by LLMs. Right?
Many of the recent articles in the media about productivity are inaccurate, there is a big difference between plain English "productivity" and the economic concept of productivity. The quoted productivity #s are aggregates measured by the BLS, the only thing it measures is aggregate US output (~= to real GDP) divided by total US hours worked (# employees * avg hours/employee).
The reason productivity is up so much lately is that for the past two years:
- Employment (https://fred.stlouisfed.org/series/PAYEMS) has been increasing at 1-2% annualized rate (because unemployment rate/labor force participation rate hasn't been changing, so employment growth has come from population growth, which was 1-2% when current 18-30 year-olds were born)
The reality is there is a giant consumption boom the past few years, but minimal increase in employment since we were already at full employment, so by definition there will just be increase in aggregate productivity. It is unrelated to concepts like how hard are people working.
The mistake is the singular belief in productivity.
If you nail that, and the org doesn't want WFH, they'll just move the goalposts to collaboration. Or face time. They're free to retcon a rationale onto their self-justified decision.
I'd assert the mistake is thinking this is about an objective measure of productivity vs more pragmatic commercial real estate investments and in cases of poor leadership/management, needing to have people physically present to provide a sense of control.
Outside of manufacturing widgets/hour, it feels incredibly difficult to even pin down productivity.
Day to day, I bang out some code. Am I doing it better or worse than last week? No idea. WFH, definitely leaves me less drained from commuting, but I cannot point to any hard metrics one way or the other.
Another totally plausible explanation is that CPI massively underreports inflation. Productivity is inflation adjusted. If you have 10% inflation but report it as 5%, then it will appear that you’ve gained 5% productivity when you haven’t.
This story neglects to mention one of the biggest factors likely driving productivity: remote work expands the labor pool available to employers, thus making it easier for employers to find the right match for the job at the right price.
Before the pandemic, employers were mainly limited to employing workers within approximately an hour commute. With this restriction loosened, they can now more easily found workers better suited (i.e more productive) for a role than the previously available local options.
Over time, this will work to increase aggregate wages, as productivity increases are the main driver of wages.
Taken to its logical conclusion, companies offering WFH would then be morally justified in replacing US workers with cheaper third world options. UK salaries in tech for example are about 1/4-1/3 of US levels.
At some point time difference kills any productivity gain. West Coast to West Europe is barely workable even if everyone in the "secondary" zone is self-sufficient.
However, hiring engineers from Latam could indeed be an option to replace US workers if they can't offer an edge. The issue here is the language barrier.
Productivity and the link to wages has diverged lots since the 1970s in the US. In a vacuum it certainly follows that productivity should enable wage growth, this hasn’t played out as much in the real world. Once you factor in inflation, wages have hardly risen in comparison to productivity.
The reality is that the wage level is the intersection what an employee thinks they can get and what the employer thinks they can get away with, and usually the employer has the upper hand.
> Once you factor in inflation, wages have hardly risen in comparison to productivity.
Which stands to reason. We have continually increased overall productivity by adding more workers (notably robots), not by individually becoming more productive. If you double productivity by doubling the workforce, when you divide up the fruits each worker still ends up with the same amount.
We saw wage growth during the transition away from our primarily agrarian economy, but that's because wages were largely not a thing in said agrarian economy. People sold things (crops, livestock, etc.), not their time. As people started to leave the farm to work in the factory, wages, which were previously zero, had nowhere else to go but up.
But now that most everyone sells their time, we've achieve peak wage. As you point out, any apparent wage growth going forward will simply be in alignment with inflation.
> The reality is that the wage level is the intersection what an employee thinks they can get and what the employer thinks they can get away with
While that is definitely true, given enough time and negotiation (of which we have had plenty for most jobs) wages will converge on the productivity the worker is providing. So while you can most definitely cherry-pick individuals who have wages below their productivity and individuals who have wages above their productivity, the overall market ultimately settles where wages and productivity meet.
There is healthy debate about the ‘great uncoupling’ in the US between 1970 and 2010. There is no debate however that historically productivity increases have been a necessary precondition for sustained wage growth.
Moreover, the present discussion is about whether WFH may or may not be affecting productivity, not my tangential side comment about the link between productivity and wages.
Personally I counted over 5 emails I’ve received in the past year at work saying something like “great job staying productive at home- we’re just as (or more) profitable than pre-pandemic!”
And then later in that email having some rhetoric along the lines of “we’ll be working towards a return to office in order to make sure we’re giving it our best.”
It’s either one or the other- don’t doublespeak to me.
Readit News
There's the quote that implies that return to office is not the explanation for this productivity rebound. Work from home is still far higher than it was in 2019, and so is productivity. While far from a smoking gun, this is more up to date evidence that execs who threatened to fire people who didn't RTO are as wrong as they seemed. The first executive who recants on their intuition that RTO would bring about an explosion of productivity above WFH will earn my respect.
My position isn't that every job that can be WFH should be, but that every person who wants to be WFH should be able to, and everyone who wants to work in an office should be able to. Even if working in an office is less productive, and costs the company a lot more money, and reduces the pool of talent, some employees still want it. Some executives do too: these people will be happier working together, so they should have that option.
EDIT: On average, WFH folks save 5 hours a week by not having commute. That means folks going into a workplace work 5 hours more. That's not even including all of the other perks/flexibility/cost savings WFH provides.
By staying home and giving up my office, I am taking on the cost burden of the work facilities (office space, internet, etc). These were previously paid by the employer and are now paid by me. I should be compensated.
I might save money by not commuting, but that expense has NOT been transferred to my employer -- it's GONE. I saved that money and nobody has to pay for my commute now.
People with short commutes would end up picking up the slack for those with long commutes, which could create some tension in the workplace. Why should those who are actually in the office working get compensated at the same rate as someone doing 20% less due to their shorter in-office work day?
You get what you negotiate, not what you sacrifice. If you feel you should be paid extra for going to the office (I agree), demand so!
If we think less about the asymmetry between employers and employees, and think they are 2 parties entering into an agreement, the employee also has to contribute something to their work. They are bringing in their expertise and availability, how that is achieved is a matter of agreement. If the agreement said your availability to be in the office is up to you, then you are free to optimize on your side how to optimally achieve this.
I have seen people choose to live far away in better condition, trading for longer commute time, and vice versa. Why should it not be your responsibility? Ie if employer pay for commute time and possibly cost, then the incentive for me is to live as far away as possible.
I mean I would have liked this too but it isn't realistic beyond what some companies have already been doing for years before covid, which is to pay for monthly public transit passes or towards the cost of it.
On the flipside it would mean companies limiting who is allowed to be in an office if that became mandatory. You live more than 15 min from the office? Sorry, WFH for you!
Factory job that absolutely can't be done WFH? You better come live in our communal housing where you have 5 min walk time to work or you are not getting that job!
I think this is main factor driving increased productivity, not that WFH is inherently more productive.
Things should normalize as companies optimize their workforces, office leases roll off, and remote/hybrid work becomes standardized.
Dead Comment
...or maybe there's another factor, and this doesn't explain anything at all. Correlation does not imply causality.
We have LLMs now, we didn't have them in 2019, and productivity is up. Ergo, increased productivity must be caused by LLMs. Right?
The reason productivity is up so much lately is that for the past two years:
- Employment (https://fred.stlouisfed.org/series/PAYEMS) has been increasing at 1-2% annualized rate (because unemployment rate/labor force participation rate hasn't been changing, so employment growth has come from population growth, which was 1-2% when current 18-30 year-olds were born)
- Real GDP (https://fred.stlouisfed.org/series/GDPC1) has been increasing at 3-5% annualized rate
The reality is there is a giant consumption boom the past few years, but minimal increase in employment since we were already at full employment, so by definition there will just be increase in aggregate productivity. It is unrelated to concepts like how hard are people working.
Unemployment in the US has been falling for some time (apart from a brief spike in 2020).
https://www.statista.com/statistics/269959/employment-in-the...
You would expect this to have an effect on productivity as low value jobs are the ones most likely to be left unfilled.
If you nail that, and the org doesn't want WFH, they'll just move the goalposts to collaboration. Or face time. They're free to retcon a rationale onto their self-justified decision.
Day to day, I bang out some code. Am I doing it better or worse than last week? No idea. WFH, definitely leaves me less drained from commuting, but I cannot point to any hard metrics one way or the other.
Before the pandemic, employers were mainly limited to employing workers within approximately an hour commute. With this restriction loosened, they can now more easily found workers better suited (i.e more productive) for a role than the previously available local options.
Over time, this will work to increase aggregate wages, as productivity increases are the main driver of wages.
However, hiring engineers from Latam could indeed be an option to replace US workers if they can't offer an edge. The issue here is the language barrier.
The reality is that the wage level is the intersection what an employee thinks they can get and what the employer thinks they can get away with, and usually the employer has the upper hand.
Which stands to reason. We have continually increased overall productivity by adding more workers (notably robots), not by individually becoming more productive. If you double productivity by doubling the workforce, when you divide up the fruits each worker still ends up with the same amount.
We saw wage growth during the transition away from our primarily agrarian economy, but that's because wages were largely not a thing in said agrarian economy. People sold things (crops, livestock, etc.), not their time. As people started to leave the farm to work in the factory, wages, which were previously zero, had nowhere else to go but up.
But now that most everyone sells their time, we've achieve peak wage. As you point out, any apparent wage growth going forward will simply be in alignment with inflation.
> The reality is that the wage level is the intersection what an employee thinks they can get and what the employer thinks they can get away with
While that is definitely true, given enough time and negotiation (of which we have had plenty for most jobs) wages will converge on the productivity the worker is providing. So while you can most definitely cherry-pick individuals who have wages below their productivity and individuals who have wages above their productivity, the overall market ultimately settles where wages and productivity meet.
Moreover, the present discussion is about whether WFH may or may not be affecting productivity, not my tangential side comment about the link between productivity and wages.
It’s either one or the other- don’t doublespeak to me.