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The US economy is losing billions as stubborn workers continue to refuse to return to the office, with more than 30 percent of work done remotely last month.
Work-from-home resistance is plaguing major US cities, with New York, Los Angeles and Washington DC losing more than $4,000 per worker each year due to the habit.
When the pandemic hit in May 2020, more than 61 percent of people were working from home, a number that has only halved despite the nation’s attempts to recover.
The work-from-home rate was just 4.7 percent before the pandemic, a stark difference that worries experts about the continued impact on many industries.
The US economy is losing billions each year as work from home continues to affect major US cities.
The data concerned, collected by WFH Researchfound that the post-pandemic level of working from home is still six times higher than before.
And this level rises to almost 50 percent of all employees who insist on working remotely in large urban areas. like New York and Washington DC.
The problem is devastating businesses across the United States, with major cities from Miami to San Francisco taking a significant economic hit as people stay in their homes.
As industries continue to struggle and rampant inflation affects nearly all Americans, the lack of a return to the office worries economists.
“It’s affected so many things,” Nicholas Bloom, an economist at Stanford University and a WFH researcher, told The hill.
It has affected the fabric of the city. It is affecting the days of the week that people play sports: golf, tennis. It is affecting retail.
The researcher stressed that remote work is creating a huge financial hole, as the old hubs of the industry are failing to return to their former glory.
In New York, Bloom said, the city’s coffers “will see about $12 billion less in spending in midtown Manhattan,” the center of the city’s financial sector.
Following the pandemic work-from-home boom that saw most employees forced to avoid the office, the next two years saw a gradual push by companies to bring back-office life.
But apparently many have remained stubborn, and in the first month of 2023, one in three people persistently avoided the office in favor of the comfort of their own home.
The city that leads the way in terms of employees working from home is Washington DC, and WFH Research found that the nation’s capital saw a 37% reduction in face-to-face days in the office.
This was closely followed by Atlanta, Georgia at 34.9 percent, Phoenix, Arizona at 34.1 percent, and Los Angeles at 32.9 percent.
More than 30 percent of workers refuse to return to regular office routines, a dynamic that has economists worried about the impact on the nation’s struggling economy.
A whopping 28.2 percent of people are hybrid workers, meaning they only make it into the office a couple of days a week.
Some people insist that working from home isn’t necessarily a bad thing, arguing that more work can be done without the hassle of commuting.
“There is enough and growing evidence that people work well when they work from home,” said Barbara Larson, executive professor of management at Northeastern University’s D’Amore-McKim School of Business.
‘It’s not like everyone was working hard when they were in the office.’
But while pushing yourself while staying home can be a productive way to work, it’s the American economy that’s paying the price.
With crowds of people avoiding city commutes and the added expense that comes with it, major hubs across the US are losing thousands of dollars per worker.
New York tops the list of places that take a hit from working from home, with more than $4,600 unspent per person, each year.
Just over 4 million people are currently employed in the private sector in New York, according to state labor statistics, which equates to more than $18.7 billion lost each year.
New York is followed by LA with $4,200 lost per worker, Washington DC with $4,051 and Atlanta, Georgia with $3,938.
Remote work “means less consumer spending and less use of public transportation,” Adam Ozimek, chief economist at the Economic Innovation Group, told The Hill.
A large number of employees also find themselves in a ‘hybrid’ work situation, where they come into the office only a few days a week.
Data for January from WFH Research found that a whopping 28.2 percent of people are hybrid workers, a new dynamic that has affected traditional office life as well.
Urban office buildings in the ten largest cities only reached a 50 percent occupancy rate last month, with first-time offices even reaching half, according to castle.
In New York, 48.6 percent of desks in the metro area remain empty, while Chicago has 50.7 percent empty and Houston 61 percent.
So rented office space is devastating business results in major cities, as many are stuck paying for buildings that are barely half full.
“It’s not the end of cities,” Ozimek said. “But if cities aren’t flexible and smart about how their tax policies and tax policies change, you could end up in a bad situation.”