Even in the 1800s, workers were beginning to resent the grind of office life.
“You don’t know how wearisome it is to breathe the air of four pent walls without relief, day after day,” British essayist Charles Lamb wrote in a letter to poet William Wordsworth in 1822, railing against his toil in the East India’s Co’s office in Leadenhall Street, London.
However, for the past 17 months, Lamb’s modern successors have mostly worked from home, liberated from what he termed “official confinement.”
Illustration: Yusha
Today’s white-collar staff are living through a radical transformation of professional life, one economists say is already beginning to jump-start economic productivity and accelerate innovation.
The COVID-19 pandemic has weakened the gravitational pull of city centers, with new forces now reshaping knowledge-based economies. Public transport journeys into cities are down, as are coffee shop sales, while demand for real estate in leafy suburbs is up. People in the US spent more time on leisure and household activities last year, replacing commuter life with real life.
While a more permanent transformation of working life is likely to have painful consequences for many inner-city businesses, economists see a recalibration under way that could revitalize smaller towns and suburbs. New digital tools mean that retail and hospitality — as well as knowledge-intensive industries — are already undergoing far-reaching change.
Working from home about one day a week would boost productivity by 4.8 percent as the post-COVID-19 economy takes shape, said a recent study of more than 30,000 US employees coauthored by Jose Maria Barrero, assistant professor of finance at Instituto Tecnologico Autonomo de Mexico, and others.
Much of that one-off increase is projected to come from reduced commuting time, a factor not usually captured by economists.
The transformation would deliver enduring benefits, said Stephen J. Davis, distinguished service professor of international business and economics at the University of Chicago, who studies the evolving workplace and was one of the authors of the productivity study.
The “positive consequences will be there indefinitely,” Davis said.
US Federal Reserve Chair Jerome Powell on Aug. 17 alluded to a fundamental shift.
“I think we know that we’re not simply going back to the economy we had before the pandemic, but it will take time to see exactly what the changes will be,” he said. “It seems a near-certainty that there will be substantially more remote work going forward. So that’s going to change the nature of work, and the way work gets done.”
The clues were there before COVID-19 struck.
In 2013, a landmark study by Nicholas Bloom, professor of economics at Stanford University, found that working from home boosted productivity by 13 percent.
A University of Oxford research paper in 2019 revealed that happy staff closed more sales.
Countries with stagnant productivity records are likely paying close attention.
In 2019, the UK lagged 15 percent below its precrisis trend for total factor productivity, Bloomberg Economics found. It is a slump without parallel since Charles Lamb’s time, exacerbated by Brexit, an aging population and the pandemic.
European peers have struggled, while the US has found it hard to break away from the pack.
For all the optimism surrounding these tectonic shifts, some economists strike a note of caution.
While recent research from the Federal Reserve Bank of San Francisco acknowledges that sweeping changes to the way people do business could boost efficiency, it warns against reading recent gains in productivity numbers as due to more people working from home, citing data distortions.
Even the Bank of England said that hybrid meetings “may be more challenging.”
A majority of managers worry about the effect of working from home on collaboration, company culture and well-being, said the Organisation for Economic Co-operation and Development (OECD), which also cited employers’ concerns about their diminished ability to observe employees at work.
A study led by Michael Gibbs, clinical professor of economics at the University of Chicago, found workers worked longer hours at home to perform the same task, as focused time was broken up by domestic distractions such as childcare and online meetings.
The report also said that people working from home might exaggerate their productivity in surveys to encourage adoption of the practice.
Former British government adviser Giles Wilkes is more bullish.
“The ability to deliver products in different places, make more efficient uses of property, and so forth, that is productivity driving innovation,” said Wilkes, who recently published a report on the UK’s productivity woes.
“Hybrid working represents a change in the patterns of both demand and supply in a way that moves the economy forward,” he said.
Yuri Suzuki does not miss his twice-daily 70-minute commutes. Suzuki, a partner at international design company Pentagram, used to travel on the “toxic” Central Line, a subway route bisecting London.
“After I came back home, I felt just exhausted — I couldn’t really think or create anything,” Suzuki said on a Zoom call from his home in the seaside town of Margate, England, where he has lived since the pandemic began.
Freed from the grind of travel, Suzuki said he is able to “invest” time in creative thinking long after formal working hours.
That has boosted productivity, with his team taking on double the number of projects than it did before the pandemic. To socialize with his team, Suzuki plans to return to the office about once a week.
At this point, with the Delta variant of SARS-CoV-2 spreading rapidly around the world, many corporate return-to-office plans are being put on hold, but evidence from almost 18 months of the pandemic is helping to inform C-suite decisions.
A glut of companies, new and old, want to marry the benefits of remote work with the efficiency of face-to-face meetings. Alphabet Inc’s Google plans to let employees spend two days “wherever they work best.” Lazard Ltd, a 171-year-old financial advisory firm, is following suit for some staff.
Asset manager State Street Corp plans to close its two Manhattan offices, it said on Aug. 16.
Even banking titans aim to allow some flexibility: Morgan Stanley chief executive officer James Gorman sees office working at “not 100 percent, but not zero percent” of total hours.
“Both workers and managers tend to say that two to three days a week of working from home is ideal,” said Chiara Criscuolo, who researches productivity for the OECD.
Communication and professional relationships can suffer after that, she said.
While hybrid work is taking root among educated, well-paid employees, less than half the workforce has that option, the McKinsey Global Institute said.
In the UK, just 36 percent of people did some work from home last year, even during lockdowns.
Yet as more work happens away from traditional offices, workers are expected to infuse a wider range of communities with their wealth and business knowledge, distributing economic gains more equitably, said Abigail Adams-Prassl, associate professor in economics at the University of Oxford.
That would have some painful consequences.
City center cafes, shops and hairdressers catering to professionals are most exposed, with Bloom, Davis and Barrero calculating that a shift to partial working from home would hit annual spending in major US city centers relative to pre-pandemic levels.
Manhattan alone would see a drop of 13 percent, they said.
Wilkes said that “a lot of people” would be hurt by the process of change.
Nevertheless, he said that “the changes that we’ve been forced into are going to be beneficial on the whole.”
Hybrid working also has the potential to encourage a more diverse range of people into the workforce, Davis said, reducing longstanding productivity issues “by making use of the skills of people who were otherwise not working or not working very much.”
That includes mothers and people living outside major cities.
The US arm of consultancy PricewaterhouseCoopers LLP began ramping up some aspects of hybrid work — including flexibility on where and when to work, and training on remote-work technology — in 2017, PricewaterhouseCoopers chief people officer Michael Fenlon said.
In 2018, the University of Southern California found that teams worked better and retention improved.
The focus has sharpened since COVID-19 hit.
“Pre-pandemic we learned that a culture of trust was essential for well-being and flexibility. Teams that adopted this were reporting stronger relationships, stronger collaboration, better teamwork and stronger relationships with clients,” Fenlon said. “We’ve used the pandemic to become even more intentional and explicit.”
Employers the world over are now grappling with that shift as they try to balance productivity growth with keeping staff creative and happy.
It is a conundrum that comes 199 years too late for Charles Lamb.
“My theory is to enjoy life, but my practice is against it,” he wrote to Wordsworth in 1822, lamenting his years spent in smoke-filled offices.
Lamb’s desk-bound successors — and their managers — are soon to find out whether they can put their own theories into practice.
As Taiwan’s domestic political crisis deepens, the opposition Chinese Nationalist Party (KMT) and Taiwan People’s Party (TPP) have proposed gutting the country’s national spending, with steep cuts to the critical foreign and defense ministries. While the blue-white coalition alleges that it is merely responding to voters’ concerns about corruption and mismanagement, of which there certainly has been plenty under Democratic Progressive Party (DPP) and KMT-led governments, the rationales for their proposed spending cuts lay bare the incoherent foreign policy of the KMT-led coalition. Introduced on the eve of US President Donald Trump’s inauguration, the KMT’s proposed budget is a terrible opening
The Chinese Nationalist Party (KMT) caucus in the Legislative Yuan has made an internal decision to freeze NT$1.8 billion (US$54.7 million) of the indigenous submarine project’s NT$2 billion budget. This means that up to 90 percent of the budget cannot be utilized. It would only be accessible if the legislature agrees to lift the freeze sometime in the future. However, for Taiwan to construct its own submarines, it must rely on foreign support for several key pieces of equipment and technology. These foreign supporters would also be forced to endure significant pressure, infiltration and influence from Beijing. In other words,
“I compare the Communist Party to my mother,” sings a student at a boarding school in a Tibetan region of China’s Qinghai province. “If faith has a color,” others at a different school sing, “it would surely be Chinese red.” In a major story for the New York Times this month, Chris Buckley wrote about the forced placement of hundreds of thousands of Tibetan children in boarding schools, where many suffer physical and psychological abuse. Separating these children from their families, the Chinese Communist Party (CCP) aims to substitute itself for their parents and for their religion. Buckley’s reporting is
Last week, the Chinese Nationalist Party (KMT) and the Taiwan People’s Party (TPP), together holding more than half of the legislative seats, cut about NT$94 billion (US$2.85 billion) from the yearly budget. The cuts include 60 percent of the government’s advertising budget, 10 percent of administrative expenses, 3 percent of the military budget, and 60 percent of the international travel, overseas education and training allowances. In addition, the two parties have proposed freezing the budgets of many ministries and departments, including NT$1.8 billion from the Ministry of National Defense’s Indigenous Defense Submarine program — 90 percent of the program’s proposed
RSS