A study projects employees will remain working remotely 20 percent of workdays, up 15 percent pre-pandemic, impacting Democrat-controlled cities.
According to National Bureau of Economic Research (NBER), “20 percent of full workdays will be supplied from home after the pandemic ends, compared with just 5 percent before.”
The study found five reasons for the shift to working from home (WFH):
- Better-than-expected WFH experiences;
- New investments in physical and human capital that enable WFH;
- Greatly diminished stigma associated with WFH;
- Lingering concerns about crowds; and
- Contagion risks, and a pandemic-driven surge in technological innovations that support WFH.
The study also projected three consequences of the new working arrangements:
- First, employees will enjoy large benefits from greater remote work, especially those with higher earnings;
- Second, the shift to WFH will directly reduce spending in major city centers by at least 5-10 percent relative to the pre-pandemic situation; and
- Third, our data on employer plans and the relative productivity of WFH imply a 5 percent productivity boost in the post-pandemic economy due to re-optimized working arrangements.
The occurring shift away from major city centers is well substantiated.
“Dense core counties of major U.S. metro areas saw a net decrease in flow into the city, while other suburbs and some smaller cities saw net gains,” Bloomberg explains. “In other words, people moved outward. Outward to the suburbs of their own core metro area, but also farther out, to satellite cities or even other major urban centers that might still give people proximity to their region.”
“There’s nothing really tethering us to San Jose or the Bay Area, plus it’s just so expensive that there’s no real feasible way for us to have a lifestyle and survive,” Sarah Goodman told Bloomberg.
A policy economist at the Federal Reserve Bank of Cleveland Stephan D. Whitaker believes the migration away from big cities only applies to New York City and San Francisco.
“The phrase or the concept of urban exodus, that really only applies to New York and San Francisco,” he said.
The Washington Times articulates the issue another way:
Most important among these is the newfound ability of many companies and their employees to work pretty much wherever. The coronavirus, and the government’s disastrous response to it, has provided a beta test of working from home. For most employees, the lack of commute means more time, which is the most prized commodity of all. For companies, they now know that they can shift the burden of real estate and other office costs to their workers.
In a generation obsessed with safety, the lawlessness that has followed the protests — and the seeming indifference to the destruction of property on the part of the local political elites, will lead some to conclude that cities are less safe than they originally thought. Seattle’s experiencing a secessionist movement and San Francisco’s alerting its residents not to bother the police with actual disputes only serve to highlight the centrifugal vibe of the last month or so.
Most of these cities have been Democratic strongholds for a generation or more. When democracy devolves to one-party rule, when the ballot box fails to provide remedies, people will vote with their feet.
NBER surveyed over 30,000 Americans using multiple waves for their investigation.