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Wednesday, January 12, 2021
Working from home has drawbacks — for the working class
Last week, Eric Adams, New York City’s newly-inaugurated mayor, ignited a social media firestorm when he pointed out the obvious: big companies are hurting retail, eateries and small businesses by prolonging return-to-office plans.
Office workers “are part of the ecosystem of this city,” Adams said in a soundbite that quickly went viral on Twitter. "My low-skill workers, my cooks, my dishwashers, my messengers, my shoe-shine people, those that work in Dunkin' Donuts, they don't have the academic skills to sit in the corner office," he added. "They need this."
Adams somewhat garbled his thoughts, but much like MSNBC anchor Stephanie Ruhle — who also stepped into the middle of a Twitter firing squad last year when she correctly pointed to higher pay as inflationary — hizzoner is fundamentally right.
And the reason why has a lot to do with the boom in COVID-19 era remote working that’s forcing more companies to encourage their employees to stay away from the office.
Complicating matters is the less fatal but highly transmissible Omicron variant, which has upended plans for big companies to set firm return-to-office plans. The status quo has “unnerved office landlords and small businesses that are being stretched thin by a dearth of demand in office districts,” The Wall Street Journal reported on Tuesday.
Adams “highlights a key urban issue when he urges big banks and other employers to bring their employees back to work,” Stephen Goldsmith, an author and professor at Harvard’s Kennedy School of Government, told the Morning Brief in an email.
“Anyone working in a city’s downtown can attest that on the rare days they actually venture to the office the number of closed retailers they see and the absence of the previously familiar restaurant worker who provided them morning coffee or noon lunch service,” said Goldsmith, a former mayor of Indianapolis and Deputy Mayor of New York City.
“When these office workers stay home in large numbers their previous discretionary spending on food, dry cleaning, supplies, and the like disappears from the urban core as do the jobs of many,” he added — which has grave implications for hospitality, tourism and the vitality of a city known for its restless energy.
Two full years into the pandemic, legions of office workers are still camped out in makeshift home offices, which is forcing employers to completely rethink the nature of the workplace, and how to attract and retain talent.
And the WFH revolution is unlikely to abate anytime soon. According to alternative data platform Thinknum, job listings for remote work plateaued in the middle of last year before surging again at the end of 2021, coinciding with the Omicron surge. Meanwhile, monthly remote job listings have skyrocketed by nearly 55% in just 4 months, Thinknum found.
“Of course, working in person presents risks, but Mayor Adams correctly elevates the tradeoffs involved and the faces of those who lose,” according to Goldsmith. “There will inevitably be more long-term hybrid working, but such a shift should also include an understanding of the human and financial costs.”
To be certain, there are a host of advantages to working remotely, as Yahoo Finance contributor Laura Vogel broke down on Monday. It made us knowledge workers very comfortable working from... well, wherever.
The work-from-home explosion has helped popularize the term “digital nomads,” but it’s also put a spotlight on an effect the Morning Brief recently noted has become a force multiplier behind surging rent prices in major cities and key suburbs.
Moreover, it illustrates the interconnected nature of economies — and certain jobs, like Adams spelled out — that are dependent on in-person activity and spontaneous interaction. The flat out truth is that working from home is a luxury available only to a small percentage of the (high-earning) workforce.
The rest – like the cooks, messengers and cashiers Mayor Adams referenced, only get paid when they show up in person. The practical import has dire implications for:
The coffee shop where you used to pick up a cup of joe on the way into the office;
The salad/sandwich spot you stopped by on your lunch break;
The boutique you used to visit on your way back home from the office.
All of the above are mostly reliant on foot traffic, and it’s the kind that’s not entirely supplanted by ordering on a smartphone, which is what NYC’s mayor was trying to say.
“While Adams' statement isn't wrong, it's the words that were chosen which makes it a difficult situation,” noted Corey Ashton Walters, CEO of Here, an online marketplace that enables people to invest in vacation rentals online.
“Instead of describing workers as "low-skilled," a better phrase would have been that foot traffic is needed so low-waged workers can survive,” Walters told the Morning Brief.
“These roles are extremely labor intensive and not easy to do. It requires long hours of standing, the ability to work quickly, and a friendly demeanor at all times,” Walters said, but added that “while remote work means less traffic, the safety of workers needs to be prioritized until the pandemic is in better control.”
The irony is that hourly workers are doing better financially than they have in years, helped in large part by an exceptionally tight pandemic-era labor market. A report from Yahoo Finance’s Adriana Belmonte shows how the new year has ushered in a slew of minimum wage increases across dozens of states and cities, even as the federal government dithers on hiking its pay rate.
However, one thing is certain. The longer people stay working from home, the more lower-income wage earners will pay the price.