Work from home The Great Resignation.
Whatever you call it, Americans' attitude to work seems to have changed over the course of the long pandemic. And, generally speaking, this is not for the worse. This new approach could cause long-lasting harm to economic growth, and even threaten prosperity.
Before Covid, the majority of Americans worked according to a decades-old routine: Get up, get dressed, have breakfast, commute, and then spend eight hours at work or in a factory. Then, you can go home for a glass of wine, or beer. Repeat this process every Monday through Friday.
It's a fact of daily life. Dread for many, enjoyment for some, but most importantly for those who are closer to the pinnacle in responsibility and compensation.
The height of Covid was a time when days were different, especially for office workers. There was no need to worry about your wardrobe. For some, a more manageable schedule of meetings.
Many Americans started to reconsider their relationship with work as lockdowns began to ease. A Gallup poll found that Americans are less engaged at work than they were in 2020.
The Great Resignation was a phenomenon in which older workers decided to leave their jobs. If the participation rates were to remain constant, approximately 2.1 million Americans would still be working today. The number of Americans who work part-time, i.e. not because of a shortage of work, has increased to the peak of January 2020.
All this despite the fact that there are nearly two full-time jobs available for every American who is unemployed.
Many people have asked me the same question as I: Has America become soft?
Recent Wall Street Journal reports that 38% of Qualtrics workers and managers surveyed felt that their importance had decreased during Covid, while 25% said it had increased. The rest stated that it had not changed.
These trends were encouraged by stimulus checks and lower-than-normal spending during worst pandemics. Americans had $2.1 trillion more than usual in their bank accounts at peak; they have approximately $900 billion today of 'excess savings'
Many people have refused to return to work, causing a conflict with their bosses. Why is it that companies are so determined to return to work? All of the senior executives I spoke with believe that working from home is less productive than working in an office.
Mentorship and collaboration are both harder. It can be difficult to walk to your colleague's desk and ask a question or request a favor. Jamie Dimon, chairman and chief executive at JPMorgan, stated that remote work 'doesn’t work for young children or spontaneity, or management' during January's World Economic Forum annual meeting in Davos.
He also stated that it doesn't work for people who are motivated to hustle two years ago. Many employers don't believe their employees work as hard at home because of the distractions and more difficult supervision.
Even Silicon Valley companies who were among the first to embrace remote work are now changing their minds. Marc Benioff (chief executive at Salesforce) noted that employees hired during the pandemic were less productive that long-term employees. He speculated that a lack of an office culture could be the reason. Last week, Mark Zuckerberg, chief executive of Meta, made the same observation. "In-person time helps to build relationships and get more done," was the headline of one section of a long memo he sent to his staff.
Silicon Valley Bank was the next. Although Covid ceased to exist, many of the bank's top leaders remained scattered across the country. This made it difficult for collaboration and communication. In its last month's annual report, the bank warned that prolonged work-from home arrangements could have negative consequences.
It is difficult to insist on five days back in the office if workers are given the option to take a job with another company that has a more flexible policy. Many companies are reluctant to accept that future work will require three or four days at the office, and not Fridays.
Flexible work is an example of white-collar privilege. Americans who work in factories, restaurants, or stores do not have the option of working at home or the peace and quiet that comes with it.
I'm fine with Americans reducing or eliminating the rat race in their lives. Growing prosperity should encourage more leisure.
The average American full-time worker worked for approximately 2,900 hours per annum (or 56 hours per week) in 1900. Industrialization led to a decline in hours worked, causing John Maynard Keynes, an economist, to predict that a 15-hour workweek would be possible 'a century hence'.
Although it's been nearly a century since the last time Americans worked, they still labored on average for 34.6 hours per week, or roughly 1,800 hours annually.
We could have reduced our work hours and maintained a 1930 standard living standard, but productivity has increased since Keynes's day. We chose to continue working to reap greater material rewards. Real incomes have increased sevenfold since 1900.
Many may make a different decision. It's okay to make a different choice. However, we should not forget that less output -- regardless of whether it's a result of fewer hours or lower efficiency -- ultimately means a lower standard and/or faster rising one.
I will admit that, aside from the shrinking labor force, the hard data on the effect of new work arrangements are at best inconclusive. Statistics remain distorted due to Covid effects. Technology, especially video conferencing, makes remote work possible, particularly when it is structured in a way that allows for remote work to be done on specific days. Last but not least, I will admit that some time spent on commute (and possibly personal grooming) may be wasted.
We should also be aware of the different options being made by other countries, especially China, which is our largest strategic enemy. "996" is a Chinese term that means to work 9 a.m.-9 p.m. six days per week. Although the Chinese government has attempted to curtail this practice through a series labor market reforms I have found that the prevalent work ethic is still extraordinary.
According to JLL, a property manager in Asia, office occupancy ranges between 80 percent and 110 percent. This means that there are more people in offices in certain cities than before the pandemic. The U.S. office occupancy is 40 percent to 60% of pre-Covid levels. This is lower than Europe which is between 70 and 90 percent. Experts believe the European figures are higher because of smaller houses and apartments in Europe. This makes working from home more difficult.
A push has been made to codify what may be already a reality, a four-day workweek. California, Maryland, and other states have passed legislation to this effect. I'm skeptical.