The US economy is losing billions as stubborn workers continue to refuse to return to the office, with more than 30 percent of work done remotely last month.
Work from home resistance is plaguing major US cities, with New York, Los Angeles and Washington DC all losing over $4,000 per worker every year due to the habit.
When the pandemic hit in May 2020, over 61 percent of people worked from home – a number that has only halved despite the nation’s attempts gets back on its feet.
The rate of working from home was just 4.7 percent prior to the pandemic, a stark difference that has experts concerned about the continual impact across numerous industries.
The US economy is losing billions every year as working-from-home continues to plague major US cities
The concerning data, collated by WFH Research, found that the level of post-pandemic working-from-home remains six times higher than before.
And this level rises to almost 50 percent of all employees insisting on working remotely in large urban areas, such as New York and Washington DC.
The issue is devastating businesses across America, with major cities from Miami to San Francisco taking a significant economic hit due to people remaining in their homes.
As industries continue to struggle and rampant inflation plagues almost all Americans, the failure to return to the office has economists concerned.
‘It’s affected so many things,’ said Nicholas Bloom, a Stanford University economist and WFH researcher, to The Hill.
‘It’s affected city structure. It’s affecting days of the week that people play sport: golf, tennis. It’s affecting retail.’
The researcher stressed that remote working is creating a huge financial hole, as former-industry hubs are failing to return to their former glory.
In New York, Bloom said, the city’s coffers are ‘going to see about $12 billion less in expenditures in downtown Manhattan’, the center of city’s financial sector.
Following the pandemic’s work-from-home boom that saw a majority of employees forced to avoid the office, the next two years saw a gradual push from businesses to bring back-office life.
But many have seemingly remained stubborn, and into the first month of 2023, one in three people persistently avoided the office in favor of the comfort of their own home.
The city that leads the way in work-from-home employees is Washington DC, with WFH Research finding that the nation’s capital saw a 37 percent reduction of in-person days in the office.
This was closely followed by Atlanta, Georgia at 34.9 percent, Phoenix, Arizona at 34.1 percent and Los Angeles, at 32.9 percent.
Over 30 percent of workers are refusing to return to regular office routines, a dynamic which has economists worried over the impact on the nation’s struggling economy
A massive 28.2 percent of people are hybrid workers, meaning they only make it into the office a couple days a week
Some people insist that working from home is not necessarily a negative, maintaining that more work can be done without the hassle of a commute.
‘There’s sufficient and growing evidence that people do work well when they’re working from home,’ said Barbara Larson, executive professor of management at Northeastern University’s D’Amore-McKim School of Business.
‘It’s not like everybody was working hard when they were in the office.’
But while knuckling down while remaining at home might be a productive way to work, the US economy is the one paying the price.
With droves of people avoiding the city commute and the extra spending that goes along with it, major US hubs are losing out on thousands per worker.
New York tops the list of places taking a work-from-home hit, with over $4,600 not being spent per person, every year.
Just over 4 million people are currently employed in New York’s private sector, according to the state’s labor statistics, equating to over $18.7 billion lost – every year.
New York is followed by LA at $4,200 lost per worker, Washington DC at $4,051, and Atlanta, Georgia at $3,938.
Remote working ‘means less consumer spending, and it means less transit use,’ said Adam Ozimek, the chief economist for the Economic Innovation Group, to The Hill.
A large number of employees are also finding themselves in a ‘hybrid’ working situation, where they make it into the office for only a few days out of the week.
WFH Research’s January data found that a massive 28.2 percent of people are hybrid workers, a new dynamic which has also taken a toll on the traditional office life.
Urban office buildings in the ten largest cities only reached 50 percent occupancy rate last month, the first-time offices even reached half full, according to Kastle.
In New York, 48.6 percent of desks across the metro area remain empty, while Chicago sits at 50.7 percent empty and Houston at 61 percent.
The rented office spaces are therefore devastating business’ bottom lines across major cities, as many are stuck paying for buildings that are barely half full.
‘It’s not the end of cities,’ said Ozimek. ‘But if cities aren’t flexible and smart about how they change their fiscal policies and tax policies, you could end up in a bad situation.’
