The American worker is on a productivity tear and it may have more to do with a surge in working from home than the effects of AI, according to a Stanford economist.
For the past five years, the output for non-farm businesses has increased by a sizable 2% per year, The Economist reported citing statistics from the Bureau of Labor Statistics. This is a marked increase from the 1% productivity growth per year that defined most of the 2010s, and a trend that has taken even Federal Reserve Chairman Jerome Powell by surprise.
Yet, while the hype around AI over the past several years makes it a logical candidate for the main driver behind the productivity boom, Nicholas Bloom, a Stanford economics professor who is known for explaining the Great Resignation of the early 2020s, says it’s more likely work-from-home policies since the pandemic are fueling the trend.
Imagine:
- matching employees to jobs they are good at and enjoy, even if not physically nearby (a lot of good people have to take care of family, or have support networks they can’t/shouldn’t leave)
- having a minimum of 30 more minutes a day back because you don’t have to commute
- having a private quiet office to work in. Virtually no offices have private offices anymore.
- having all your accessibility requirements met by default
- being able to have healthier and cheaper lunches because you’ve got your full kitchen
There are things I miss about the office for sure, but I like remote work a lot.
But think about it from the business’s perspective!
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lower rent
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lower utilities
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distributed IT
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all employee work online/archivable by default
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happier/healthier employees
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access to global talent pool
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easier to replace employees with LLMs!
The rabid return to office push is what really convinced me that most businesses are not in the hands of people who are trying to Do their business the best. At minimum it’s extrovert CEOs, and feckless middle managers that didn’t want to adapt
The lower rent point is one of the problems. Many of these businesses own the real estate or lease for many years at a time. If the space is 70% unused, that increases costs and looks bad.
Turning out the lights would help, but how does an unused building increase costs? There is for sure minimum cost to maintain the building for sake or later use, but unless they’re giving remote employees stipends for home office space, it should still cost less than back to work.
The big problem is still managers that want to feel important or intimidate underlings, and the same managers who have no clue how to measure productivity. Code line commit counts being a prime example.
The fact it is unused is the increased cost. If it were fully utilized, it would be a justifiable cost rather than a waste of resources.
Code line counts is so 30the century. Now the best way to measure is the number of AI tokens burned per hour. /s
It’s a finance cost, an accounting cost. When the building is fully occupied they list it as an asset worth 100%, but if it’s 50% occupied they have to mark it down. That affects their credit rating, interest rates on debts, etc. So yes, in reality nothing is worse, the cash flow is better spending less on maintenance, but in the world of finance it causes issues.
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We knew this. Economists were shouting it over and over during COVID, when this productivity boom started as much of the world began working from home.
Microsoft said that people working from home would never work before COVID, and then they saw a massive boost in performance when people did. To the point where they eventually had to openly admit it. Before demanding people return to the offices as soon as they could.
The only people who refuse to listen are C Suite execs, middle managers, and people with a stake in commercial property.
Managers don’t like people working from home because they enjoy lording over their subordinates, which is more difficult when they’re not physically present.
I generally prefer to work in the office as I like my work space and living space to be separate. I also have a short commute (by design) of less than 10 minutes walking.
I imagine moving an existing team from in office to remote would be best case scenario. You get all the existing social relationships and just move them on line.
I’m would be interested to see how those compare to completely remote teams.
completely remote teams.
There were actually a lot of these in startup type companies before covid hit.
The best ones were the ones that treated whatever comm app they used like an open discord channel and not virtualized meetings lol.
The former generates the same social relationships as an office because its your typical meme/gossip/rant/catchup/work talk you would otherwise have with your coworkers.
But if it’s the latter, every interaction is treated like a meeting which very quickly removes that type of communication, which is defnitley unhealthy for both you and the company at large since everyone gets treated as homogenous.
And most of the dipshit CEOs are busy trying to roll out return to office mandates and then are flabbergasted when productivity and worker satisfaction both plummet.
There are some things you need a shared workspace for. Most of what we do in the US, having converted largely to an email-and-spreadsheets-based economy, does not.
My full-flavor, everyday workspace requires a comfortable chair, decent internet, and intermittent access to elecricity. It fits in a backpack. All of my coworkers are similarly equipped. Our 40-person startup has a minuscule office that we couldn’t begin to fit everybody in. We are making lots of money.
Nicolas Cage “you don’t say” meme.
