The last great battle of the COVID-19 pandemic is not about masks or vaccines or big government action. It’s due to remote work. Several major companies, including Apple, JPMorgan Chase and Amazon, recently announced new pushes to “return to office” after previous attempts had failed. Perhaps these attempts will be more successful. But the pandemic has shown that many jobs can be done remotely, while a tight labor market and successful pandemic policies have given employees the confidence to advocate for better working conditions.
Before the COVID-19 pandemic, remote work was rare. According to one estimate, around five percent of the working days in 2018 were entirely in the home office. But only a small minority of workers have ever been able to do their jobs fully remotely, and the privilege of working from home has been mostly concentrated among educated white professionals.
However, as offices across the country closed in March and April 2020, remote work became the standard work experience. About sixty percent of paid days were completely remote as of May 2020. Their work had to be done in person, they went back to work. But since 2021, the proportion has remained remarkably constant at just over 30 percent.
The transition to remote work has been surprisingly easy for most people. Office workers already did most of their work on computers anyway, and laptops made it easier to get that work done anywhere with a wireless signal. The only part that was missing was the way to work together. But over the past twenty years, technology for remote work has advanced, even if most jobs have yet to catch up. The advent of Zoom, Slack, Teams, and the ability to collaborate on documents meant that collaborating no longer required sitting next to someone. Pandemic surveys regularly showed that a large majority of new remote workers had the equipment and space they needed.
Of course, the transition wasn’t always easy for people who didn’t have adequate jobs or childcare. People got creative and set up makeshift offices in the kitchen, kid’s room, and even the guest room. As remote work continued and people learned to use the new tools and bought better desks, noise-cancelling headphones, and better cameras, the experience improved.
Despite dire predictions, remote workers have generally been just as productive. Since some telecommuters no longer had to commute to work, they spent more time at work, including outside of business hours, such as evenings and weekends. For people, the morning commute is the most uncomfortable time of the day — far worse than childcare, housework, shopping, and even working — so it’s perhaps no surprise that people spent their non-commute time doing other things, among other things: another work a little.
Fewer wasted hours commuting opened up other exciting new opportunities. After years of decline, new commercial property registrations surged in 2020 and have remained at high levels. Part of this newfound economic dynamism is due to the flexibility of remote work and the time savings from not having to commute.
And full remote work offers even more enticing opportunities for economic growth. Remote work allows employers to hire the best person for the job, not just the person on site. That means divorcing spouses may no longer be stuck in jobs they hate, and caregivers may no longer have to choose between a job they love and moving to their hometown to care for aging parents . Full remote work even has the potential to change regional disparities — it’s no coincidence that the Bay Area lost population while Boise, Idaho was experiencing a real estate boom.
Efforts to return to office began in earnest in 2021 after vaccines became widespread. But plan after plan to bring the workers back failed. Apple has repeatedly changed its plans for returning to the office amid virus waves and employee revolts. Other large companies faced similar setbacks. And it’s not just the Bay Area that’s had trouble convincing people to come back. With the tight job market making it difficult to hire new employees, New York City Mayor Eric Adams has had to back down his tough stance on remote work.
After nearly two years of productive remote work, many people have been reluctant to return to the office. Remote workers felt they had shown they could be productive, and the executives pushing them back had not made a convincing case as to why they should give up their newfound flexibility. Workers organized petitions. Others ignored mandates. And as the labor market tightened, others switched to more flexible companies. As an article in the Wall Street Journal put it, “Remote work is the new contract bonus.”
As a result, remote work has been broadly stable since 2021, with office occupancy down about half compared to pre-pandemic levels and about 30 percent of workdays being spent entirely remotely, six times the pre-pandemic rate. Not everyone prefers remote work, but a new consensus about hybrid working seems to have emerged in many companies: many employees come to collaborate two to three days a week, while others come infrequently or not at all.
Similar forces have changed for the better the low-wage labor market, where most of the work has to be done in person. Wage increases were greatest for the lowest-paid workers, as people quit for better-paying jobs where they were treated better. Union organizing, while still difficult, has achieved a number of notable successes.
These trends have one thing in common: a tight labor market meant people were confident of finding another job, and effective pandemic policies meant they were financially secure and could afford a spell of unemployment. This confidence gave workers the courage to make better demands of their employers.
This moment may not last. This time, efforts to return to office could be successful, or rising unemployment could weaken workers’ power. However, the fact that workers managed to hold back, at least for a while, shows that a tight labor market and government policies that improve financial health can reshape the economy in surprisingly positive ways.
Scott Fulford is senior economist at the Consumer Financial Protection Bureau. He has a PhD in Economics from Princeton University and taught Economics and International Studies at Boston College before joining the CFPB. His academic and policy research examines the economic issues faced by individuals and households and how they use financial products to address these issues. He lives in Washington, DC with his wife and two young children
Scott Fulford is the author of The Pandemic Paradox: How the COVID Crisis Made Americans Financially Safer. The views expressed here and in the book are his own and do not necessarily represent the views of the Consumer Financial Protection Bureau or the United States.
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