Covid fallout: Americans are done with working full-time from the office 

Companies increasingly adopting 'hybrid' model allowing staff to have the best of both worlds

US workers are demanding more family time.

Americans are shedding their masks, buying concert tickets and booking vacations like it’s 2019. But there’s one thing that doesn’t appear to be going anywhere as the pandemic fades: Remote working.

Companies from Vanguard to Ford are permanently adopting “hybrid” work schedules where employees spend some of the week at home and the rest at an office. 

Forecasting the implications of these long-term work shifts on the US economy is no small task.

Enter Nicholas Bloom, a Stanford University economist who started researching the economic impact of remote work years ago and has become a de-facto "working-from-home" expert during the pandemic, with his findings featured in dozens of publications. 

Bloom, who is also co-director of the Productivity, Innovation and Entrepreneurship programme at the National Bureau of Economic Research, has spent the last year surveying tens of thousands of US firms and employees about their post-pandemic work arrangements.

In a conversation ahead of the release of his latest working paper, The Donut Effect of Covid-19 on Cities, published with Stanford colleague Arjun Ramani, Mr Bloom spoke about remote work’s impact on migration, real estate, diversity and productivity. 

His research shows that Americans are congregating in the suburbs and, arguably, apartments in urban, more dense areas are being vacated at a faster pace.

The places losing the most people are centres of big cities and downtowns are doing very badly, having  lost roughly 15% of people and businesses, and the suburbs of the same large cities are doing really well. 

In fact, it looks like the suburbs of large cities are the hottest property markets. 

Suburbia

Mr Bloom thinks that this is all due to the move to hybrid working. If you can work from home two days a week, it makes it more appealing to live in the suburbs because you have to commute less.

The centre of American cities have had a 40-year boom. Young people have wanted to move into city centres, they haven’t rushed out to suburbs as rapidly as they got older, and empty nesters have wanted to move back. Covid has probably unwound 10 to 20 years of that.

Some people will pay the same rent and get bigger apartments, other people will pay lower rents for the same apartment and you’ll find they have a bit more spending power, and other adjustments will be that more artists will come back to the city centres — folks that were driven out. 

Who would choose to work from home more days post-pandemic is not random. 

Family-friendly

For people with children under the age of 12, you find almost 50% more women than men choose to work from home five days a week. Already, among graduates with young kids there’s a big gender divide among who would choose to work from home five days a week. 

You hear it for people with disabilities, people who live far away. Working from home in a team where there are other people coming into the office is extremely costly in promotion.

Bloom said that if you let people choose how often they work from home, he fears the biggest cost in the long run is all the single young men come in five days a week, and college-educated women with a six-year-old and an eight-year-old come in two days a week, and six to seven years down the road there’s a huge difference in promotion rates.

You then have a diversity crisis and for companies you have a legal minefield of quite justifiable lawsuits, he said. 

Bloomberg