COMP NEWS – Work-from-home is here to stay, according to economists who note that return-to-office plans have stayed their execution over the past two years.

The share of workers being called back to the office has flatlined, suggesting the pandemic-era phenomenon of widespread remote work has become a permanent fixture of the U.S. labor market, economists said.

“Return to the office is dead,” Nick Bloom, an economics professor at Stanford University and expert on the work-from-home revolution, wrote this week.

In May 2020 — the early days of the Covid-19 pandemic — 61.5% of paid, full workdays were from home, according to the Survey of Working Arrangements and Attitudes. That share fell by about half through 2022 as companies called employees back to in-person work.

However, the story has changed in 2023.

The share of paid work-from-home days has been “totally flat” this year, hovering around 28%, said Bloom in an interview with CNBC. That’s still four times greater than the 7% pre-pandemic level. The U.S. Census Bureau’s Household Pulse Survey shows a similar trend, he said.

Meanwhile, Kastle data that measures the frequency of employee office swipe-ins shows that office occupancy in the 10 largest U.S. metro areas has flatlined at around 50% in 2023, Bloom said.

“We are three and a half years in, and we’re totally stuck,” Bloom said of remote work. “It would take something as extreme as the pandemic to unstick it.”

Economists theorize that remote work will remain higher than its pre-pandemic levels for the foreseeable future, though some posit that a potential recession could cause access to remote work to slide backward.

While it’s unlikely that the prevalence of remote work will ever decline to its pre-pandemic level, it’s possible that a U.S. recession — and a weaker job market — may cause it to slide a bit, economists said.

“Employers say the biggest benefit of remote work is retention,” Pollak said. In a labor market with more slack, “retention gets much easier.”

However, since work-from-home arrangements also save companies money, it’s likely a severe recession would be necessary to see a meaningful decline, Bloom said.

Long-term trends suggest the share of employees who work from home is only likely to grow from here, possibly starting in 2025, Bloom said.

For example, improving technology will make remote work easier to facilitate, Bloom said. Younger firms and CEOs also tend to be more enthusiastic about hybrid work arrangements, meaning they’ll get more popular over time as existing business heads retire, he added.

To read more about work-from-home data, click here.

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