Back To Office Work, With (Or Without) A Covid-19 Vaccine

With the growing pandemic and the United States reporting a 64% increase in new cases over the past two weeks, you might think working at home would be growing.  But the reverse seems to be true—homework is gradually declining and offices are slowly reopening across the country.  So don’t count on staying home and keeping your job—your employer may well have different plans, and other options given continuing high unemployment and a supply of workers.

Winter is coming, and colder weather means more time spent inside, which in turn means more opportunities for the virus to spread.  And experts tell us a widely available vaccine is at best many months away.  But workplace trends aren’t signaling continuing isolation and home working.

Teleworking has declined steadily since this spring.  The Bureau of Labor Statistics (BLS) reported 35% of workers doing some work at home for pay in May, the highest level they’ve recorded.  It has trended steadily downward to 21.2% in October.

But hasn’t the pandemic caused telework to skyrocket?  In April, MIT economists concluded “about half the workforce is now working from home.”  And Nicholas Bloom at Stanford claimed in May that 42% of the entire U.S. labor force was “working from home full time,” accounting for “more than two-thirds of economic activity” for the entire economy, weighted by wages.  

These estimates are higher than a University of Chicago study which concluded that at best 37 percent of jobs in the United States can be performed entirely at home.”  And the Chicago study only estimated possible teleworking, not actual implementation by employers or takeup rates by employees.

Prior to the pandemic, BLS reported that actual takeup rates—that is, jobs where telework was feasible and people actually took the option—were between 22% and 25%.   And BLS’ highest estimate of all workers doing some telework—not necessarily full time— was May’s 35%, which again has been steadily falling in their surveys.

Teleworkers obviously are concentrated in office jobs.  Sectors like construction, agriculture, manufacturing, most health care, and hospitality can’t be done on Zoom.  BLS reports 75.5% of management and professional workers doing some telework in October, versus 2.7% in service jobs.  And 75.1% of workers with a BA degree or higher teleworked, compared to 7.7% of those with only a high school degree.

Gender matters too.  Economist Ernie Tedeschi decomposed the downward trend in telework, finding that “among employed prime-age Americans, parents are more likely to be teleworking than nonparents, and fathers are more likely to telework than mothers.”  In part this reflects the gender composition of the industries and occupations that allow telework, but also men’s greater bargaining power in the labor market.

And these are only data for people who are working.  Economist Valerie Wilson at the Economic Policy Institute (EPI) notes that many more women than men are dropping out of the labor force altogether.  The trend is driven by women’s care work responsibilities, with the lack of school reopening and America’s inadequate child care system making it harder for women to stay in the labor force.  Tedeschi has shown that mothers are leaving the work force at three times the rate of fathers.

But telework isn’t just driven by the needs, hopes, and desires of workers.  Employers and companies allow or forbid telework based on their needs for managing workers, encouraging innovation, discipline and productivity, and controlling the pace and content of work.  Too much commentary on telework seems to suggest it is largely a choice for employees.  And many employers are growing skeptical about too much telework.

The New York Times profiled Jay Foreman, chief executive of the toy company Basic Fun, who is ordering all workers back to the office.  Foreman struggled with requiring workers to return, but after implementing extensive safety protocols has decided they need to come back.  Why?  “We can’t operate remotely, and this is a collaborative work environment. I pay a hell of a lot of rent to have an office, and that’s a big investment.”

Nationally, office work has never entirely gone away.  LinkedIn surveyed “working professionals” in July, and found that “more than two-thirds, 69%” of their offices “are either now reopened or were never closed in the first place.”  Kastle Systems’ weekly “Back to Work Barometer,” based on keycard access data from 3600 buildings in ten metro areas across the country, most recently found an average of 25.1% weekly occupancy.  The level ranges from lows in the New York (13.1%) and San Francisco (13.6%) metros to highs in the Dallas (40.6%) and Houston (37.5%) metros. 

And some companies like Amazon, Apple, Google, and Facebook that are letting employees continue working from home into 2021 also are adding significant office space in major cities like New York and San Jose.  Google’s project will include on-site housing.  This is consistent with plans in major cities to increase proximity of offices and housing, the so-called “fifteen minute city”, which was being promoted pre-pandemic in Paris and elsewhere as part of urban green solutions.

A coronavirus vaccine could accelerate these back-to-the office trends, although most firms aren’t planningwell ahead for that.  And more workers in the office also would help the many lower-paid service jobs in restaurants and other small businesses supported by more affluent office workers.

But expect to see more and more employers calling people back to the office, even without an immediate vaccine.  They may allow some telework (one or two days a week) for some—not all—employees.  A recent McKinsey survey found 15% of employers saying “at least one-tenth of their employees could work remotely one or two days a week going forward,” but only 7% willing to consider three days or more for that minimum one-tenth.  

The McKinsey survey underscores that employers have more leverage than employees, especially with weak job markets in the continuing recession and the option to consolidate or automate some jobs. So even if workers want to stay home, most of them don’t control that decision—the company does.  More and more firms may come to echo Mr. Foreman of Basic Fun when he says “working from home is an experiment, and I’m not ready to risk my business on an experiment.”