Working From Home
src: NBER
One of the more fundamental changes of COVID-19, besides awareness of pandemics and the like, is a shift in the acceptance and future prevalence of WFH (and the consequences of a dramatic shift in people’s work habits).
We have seen a dramatic exodus of people in places like SF and NYC, which, pre-pandemic, was able to form a snowballing network effect, whereby having such a high concentration of talent and activity produced a self-perpetuating reality of ever-increasing rents and a matching demand for such rents. Entire ecosystems survived on catering to the maintenance and functioning of this concentrated enterprise, most of which effectively disappeared overnight.1 A while back there was a HN thread about whether or not the Silicon Valley folks that rely on this undercurrent of service (background) workers should support them during the pandemic. This sort of reminds me of the documentary we just watched, Sherpa, whereby it’s the Sherpas risking their lives, bringing the Westerner’s cargo and equipment to the next camp, that enables so many of them to ascend Mount Everest. Slightly different, since there we’re talking about people risking their lives, but given the almost subsistence-level income of these service workers, perhaps it isn’t too different. The key question is what is the permanent effect of this systemic shock (COVID-19) to such places?
The above paper, through longitudinal surveys, suggests that we’ll probably see more fractional WFH (i.e. generally better flexible working hours). On the other hand, it feels to me that this kind of flexibility is not actually the most efficient (unless you can reasonably predict rates). If everyone works from home, then you effectively do away with the office, perhaps transitioning to some kind of co-working/meeting space. If people are flexible, then your space requirements are at the whims of your employees, and so it becomes an optimization problem, with a penalty for going over-capacity. Obviously, providing the flexibility is a boon for individuals (more choice), but the best kinds of scenarios are win-win for everyone.
Frankly, I’m not qualified to talk much about the dynamics of office life (I doubt my life as an academic provides any insight there), as I have thus far managed to skirt such experiences. My experience with consulting provides personal evidence that, for certain kinds of jobs, with the right kind of people, a permanent WFH arrangement is entirely feasible. Though, again, things might change if everyone else in the team is working in the office. If you’re an employee, you’re definitely more likely to be passed up for promotions and the like.
Meanwhile, many people are dying to be back to the office. We’re lucky in that we have a large contingent at home, which keeps us sane and functioning. However, there’s the confounder of everyone simply being in lockdown – perhaps once everything opens up, people will prefer WFH when they can socialize during the other times.