Pitfalls of a Remote Future

As coronavirus has run rampant through our society, a consensus has emerged that many companies will never return to their offices. Having discovered that their businesses can operate effectively and efficiently a remote setting, they will decide to forego the substantial costs of office space once the pandemic has subsided. What this might mean for the workers at such firms is far from clear. At best they will be freed from the constraints of geography and local labor markets, able to work in the settings most convenient for them. At worst they will be forced to bear the costs of office space themselves, reinforcing social divisions.

The economic calculus is straightforward: firms will convert large offices rented at commercial rates in central business districts into a far-flung set of individual workspaces, most often in their employees’ homes. In so doing, firms transfer rent costs to their employees. In the context of our current crisis this occurs silently. Very few of us are undertaking significant remodels or renting larger apartments in order to accommodate their home offices at the moment. But this may change after the current crisis. In a post-COVID world will employers remain so tolerant of the disruptions that befall those not fortunate enough to have a dedicated home office? It seems highly likely that home offices will become a desirable and visible part of our professional lives.

All of this can occur at a net economic savings. In many cases the delta between residential and commercial rents will be large enough that a firm can occupy more total square footage at a lower total cost. How this savings will be distributed remains to be seen. Firms will likely argue, with some justification, that the benefits to employees—increased convenience and the elimination of commutes—are sufficient compensation for commandeering a fraction of our homes for 40+ hours per week. Whether any of the savings is passed on via higher wages will be worked out by labor economics.

Of greater concern are the ways in which this transition may perpetuate inequality. As our living situations become both visible and relevant to our professional lives, the more fortunate among us will inherently gain advantage over those living in more challenging circumstances. Technology can mitigate this effect: zoom backgrounds and high-quality directional microphones can mask our environments quite well. But they cannot easily prevent the distractions of daily life from encroaching on us. Excitable pets, curious children, and other distracting cohabitants will remain a fact of life for most of us.

Let me be clear: I am an enthusiastic proponent of remote work. I believe it to be a vital piece of our economic future over the coming decades, with the potential to level the playing field for historically disadvantaged groups. It may well be the case that my concerns are overblown, and that the positives of remote work far outweigh the downsides. But it is important to acknowledge that this change is not without pitfalls, and we would be wise to look before we leap.

Written on April 13, 2020