The Future of Working from Home

Source image: Valery Medvedev / Shutterstock.com. Design: DF/Public Seminar.

The stubborn persistence of remote work will increasingly be on the national agenda. On April 28, 2022, Airbnb announced a new policy that would “allow employees to live and work anywhere,” and that they would partner with potential destinations “to help them attract remote workers.” Differently, New York Magazine’s Jen Wieczner reports that CEOs are starting to get restless, with only 35% of Big Apple workers back in the office. In his new book, Going Remote: How the Flexible Work Economy Can Improve Our Lives and Our Cities (UC Press, 2022), Matthew Kahn, Provost Professor of Economics and Spatial Sciences at the University of Southern California, thinks the office has been permanently displaced—and that it could be better for almost all of us.

Claire Potter: How did you decide to write this book about the future of working from home?

Matt Kahn: In March 2020, I was dazed and confused, if I can quote Led Zeppelin. My son was coming home from the University of Chicago. I was in Baltimore, returning to my wife in Los Angeles. I was worried about my parents in New York City. On the other hand, I’m an optimist, so I set the book in a post-pandemic world, a few years from now. I was thinking about Ed Glacier’s remarkable 2012 book, The Triumph of the City and Enrico Moretti’s The New Geography of Jobs (2013), both of which praise the urban work environment, But I’m always a bit of a contrarian. So, working from home and thinking about what a silver lining to the horror we were facing in 2020 really inspired the book.

CP: Was working from home hard for you?

MK: Not really. I have a huge network of friends, men, and women who wanted to Zoom with me because of our collective loneliness. We were privileged to be able to do our jobs at home and minimize our exposure to the pandemic. But as a middle-aged established academic, I was in a unique position to tap into my existing network.

CP: So, you began thinking about what could make this okay for others, what could make people choose to work from home.

MK: Yes. Economists tend to ignore imagination: for example, it never occurred to me how much I’d like George Lucas’s vision until I saw the Star Wars movie. I had to experience it. Similarly, working from home is an experienced good. We’re used to people going to work, particularly men. But suddenly, we were in this collective boat: we were all, even schoolchildren, working from home.

Encountering an experienced good, which working from home was for some people, many of whom have not returned to the office full time, is the silver lining. If we hadn’t gone through the horrors of Covid, I don’t think many people would’ve experienced these gains from the work from home revolution. We wouldn’t have run this experiment. Now that the genie’s out of the bottle, permutations are possible.

CP: But working from home also has limits. In New York, entire families were crowded in one apartment, sharing one internet account, trying to go to school, do their work, and mind the baby. For some people, it was a nightmare–and you gamed out how that might change.

MK: Yes, but I decouple the Covid crisis from working from home. On some level, my book is a piece of science fiction in which I ask: three years from now, in a post-Covid economy, how will our cities, our firms, and our lives be configured when work from home is either three days a week–or even permanent—for many people?

CP: You imagine positive choices: gender equality in housework and raising children; both parents having better relationships with those kids; and people leaving expensive cities for places where they can enjoy the outdoors. Did you figure this out before or after people in Silicon Valley started moving to Boise?

MK: Both. Some people really want to be in the Embarcadero in San Francisco or Greenwich Village in New York. But before Covid, we had people living in San Francisco and New York City who didn’t want to be there. But their jobs were there, and they wanted a short commute.

A big thing in my work for the last 30 years is: how do markets accommodate our diversity? I love that we now have the Impossible Burger, the taste of a burger without the meat. With Diet Coke, and Diet Dr. Pepper, we have the taste of that soda without the sugar.  So the big question here is: when does capitalism decouple things to get the good without the bad?

With work from home, we decouple where we live from where we work. We have a finite amount of time on this planet, but we’ve been commuting too much. My father, who still works at New York University, spent two years of his life on Metro-North commuting from Scarsdale to New York City so that his family could live in the suburbs. If he could turn back time, like Cher, what would he have done with that time? Would he have attended some of my school plays? Would he have done more housework?

When we commute less, how much better is our life? And even if our wages fall a little bit, it improves our psychic wages because we’re where we need to be. So that’s the thought experiment that I want my readers to engage with.

CP: You’re also suggesting that people can take this into their own hands with work from home and not wait for reforms like rent regulation, or universal child care, that might make cities more livable and family-friendly.  How feasible are these choices for most workers?

MK: The critique of work from home is that it is elitist. In the medium term, those eligible for work from home tend to be more educated people with the ability to be more footloose. They can head for the hills to ski if that’s their thing; they can move to Sedona if they like Arizona’s warm winters. But elites can’t always make these decisions: a dentist is an example of a highly educated person who can’t work from home.

But if enough work from home workers move to a ski area, this creates a new local service economy: they will need more dentists. They’re going to need roofs repaired, toilets installed and fixed. They’re going to need many services, which creates opportunities for non-work from home workers who share a passion for skiing to live in such an area. As another example, in the past, you had to be in a city if you wanted to work at a high-end restaurant. But, again, these will appear in certain areas far from urban centers, where rents may be more affordable.

The local multiplier effect is one of my better arguments that working from home isn’t elitist. Instead, it will spread the geography of economic opportunity. If you have a passion for the mountains, a lake, or living near family, there’ll be new opportunities in the service sector too.

CP: It sounds to me like the contrarian economic argument about gentrification. Yes, it pushes out some people, but poor people who stay have a much better and more livable neighborhood. So in a way, you’re talking about gentrifying the whole country.

MK: Yes! I have participated in radio shows where people in ex-urban areas have said, “Matt, we don’t want Billy Crystal moving into our city.” And I respond that it’s a choice. If you allow these gentrifiers to move in, your tax base will increase, and you’ll have more doctors in your area. But if you don’t want these individuals to move in, you can enact zoning codes (for example, against subdividing properties) not to welcome these individuals.

And so, I’m very interested in which areas will lean in to welcome these potential migrants and which will erect walls, worrying that Boise, Idaho, will start to look more like New York City.

Another theme in my work as an urban environmental economist is how cities and areas compete in adapting to climate change. So, Buffalo, New York, is trying to welcome work from home workers and is marketing itself on multiple fronts. First, it is saying: that we are a city that can adapt to climate change with temperate summers, less nasty winters, and we have ample fresh water. In addition, we have affordable housing stock from our time as a manufacturing hub.

CP: So, although you do say that there are exceptions—younger people may wish to work in an office because they haven’t established themselves yet—let’s talk about other, perhaps less welcome, changes that might accompany work from home. For example, there will be no more water cooler that people gather around to exchange ideas or talk about a new HBO series.

MK: True, the workplace will change. Will you feel connected to the firm if you only see your colleagues face to face twice a month? Will esprit de corps vanish? But I want my readers to think about the quality, rather than the quantity, of time they spend together.  How often does the team need to meet? Can we meet at a restaurant? Can we meet at a bar? Can we meet at a poetry slam? Do we have to gather at a sterile office?

Firms will also have to use big data to think about which teams need more face-to-face interaction, and the more valuable managers will be those who figure out how to mentor workers remotely. Which workers are quitting? Are they valuable workers? Maybe they need more face-to-face interactions.

CP: But you also argue in the book that work may no longer be a primary point of connection to other people. Those connections will shift to families, neighbors, and people in our town, and people will have deeper relationships in the communities where they live.

MK: That has yet to be determined, but yes. Robert Putnam’s book Bowling Alone: The Collapse and Revival of American Community (2001), where he talks about the atrophying of those connections, is always in the back of my brain. We have 24 hours in the day. Is our conception of the good life tied to what we’re doing at our firm or what we’re doing in our family and community?

It’s an opportunity for men to raise their game, too, because they’re not just heading to their suburban home, sleeping, waking up, and heading back to work—rinse and repeat. When you pick up this windfall of not having to commute, people can now redeploy that time for family, friends, and other possibilities I try to trace out.

CP: Working from home means having a whole range of choices in your personal life, but there are also choices in relation to work. And part of what you’re saying is that both managers and workers will be smart enough to make those decisions.

MK: Yes: in data science, folks call this A/B testing. I think each of us will run a bunch of experiments to get the right balance in our lives. Life is analogous to a financial portfolio. We don’t put all our money in stocks or bonds. We choose some combination. As we age, we switch to bonds, because we need security rather than growth. Similarly, working from home creates the possibility of reallocating our time, depending on our changing needs. We can adapt to shocks and reallocate time on the fly when the agenda changes.

CP: Human Resources—worker management specialists who epitomize the 20th-century office—how does their job change? One of my thoughts is that working from home has implications for alleviating toxic dynamics like sexual and racial harassment.

MK: Speaking as an old Chicago economist, a profit-maximizing firm should fear sexual harassment. If it gets a rep for this or for ignoring lawsuits, it will have to pay quality workers more in the future if they’re aware of this dis-amenity.

But you’re right that my book doesn’t talk about this. I’m going to give a keynote at an HR firm this summer, and I’m eager to ask them if they view the persistence of working from home as an opportunity or a challenge. Urban economists often celebrate the benefits of face-to-face interaction, but it may be a little bit like avoiding Covid: are there benefits for certain groups to not having face-to-face interaction? If I’m African American, if I’m female, do I face more challenges at the workplace than I will online?

Many firms say that they’re committed to increasing the diversity of their workforce, and I argue that working from home can help here by making it possible to draw from a larger, more diverse pool of applicants. If you live in Baltimore or Cleveland, and an HQ2 or HQ3 might move within 150 miles, talented people can live in these cities and then sometimes commute.

HR could also have a nightmare on their hands in terms of evaluating employees, particularly if worker output is produced in teams, and you can’t parse out which workers in the team are being productive and why. There are also different kinds of work. An example: if a travel agency monitors how many calls you answer and how many sales you make, it’s easy for the HR team to see whether a worker is productive at home. But how do you monitor if two people are writing a poem together? Of course, you could ask each of them, but how would someone know if a better poem would have been written if the team had been face-to-face for 50 hours?

CP: So, we may see more sophisticated forms of surveillance to see who is contributing and how much they’re contributing. But some things will be the same: you have project deadlines, and you either meet them or don’t meet them. Might we see more cooperative evaluation models, where the team itself decides how well they did and why?

MK: Perhaps. I am a fan of competition. To build on your point, because of evolutionary competition, firms that don’t figure this out are going to go bankrupt.

CP: One of the things we will need to make this work, though, is a better internet. We learned from the pandemic that the internet is very unevenly distributed, even in a city like New York, and even if you can pay for it. So how’s that going to happen?

MK: Those places that want to compete for work from home workers have strong incentives to put this infrastructure in place. As you say, the digital divide becomes even more critical in a work-from-home economy. It’s also crucial for training workers: across a generation, a family can sharply increase its educational attainment if given access to what they need. So I hope that the children of people, who currently aren’t work from home eligible, will be. But a vital aspect of this is good internet access.

Of course, there’s a question of who pays for this, so I’m very comfortable with the Biden administration’s infrastructure investments. Strengthening national internet service is like the Army Corps of Engineers’ investments in levees.

CP: Another analogy is the 1954 Federal Highway Act which expanded the trucking industry, but also created good jobs and made it possible to distribute consumer goods more widely. So, one of the things that you make me think about is that if we strengthened the internet for business, it would trickle down to education and community groups.

MK: Internet service speaks to the larger question of whether big city school districts are doing enough to promote education for young children, and what tools they need to incorporate innovative strategies. But if we get more work from home communities popping up in the exurbs, new school districts will also form that will imagine new ways to experiment with education.

So, there are two issues. How do we revitalize existing urban environments? And how do we create new communities and new cities at the fringe of existing cities to increase competition and push big-city mayors to raise their game?

CP: Part of what I learned from your book is that as people have more time, there will be more opportunities for citizen action that results in increasingly vibrant communities. So, it won’t just be top-down from a policy level, it will also be bottom-up because people will now be working, say, three days a week. They may be earning less, but that means they might be able to spend Friday in the community garden. And they might be able to spend Monday at their kid’s school.

MK: I am an empiricist, and I’d love to see time diaries going forward for those engaging workers who work from home: how will they spend their days when they can make those choices?

If anthropologist David Graeber were still alive, I would like to talk to him about whether the rise of work from home will increase life satisfaction. Will fewer people feel that they’re Dilbert in the cubicle? Life is short– why didn’t I have a meaningful life? Why wasn’t I living where I wanted to be? Why weren’t I with my mother as she was aging?

Work from home opens all these life permutations.

Claire Bond Potter is Professor of Historical Studies at The New School for Social Research and co-Executive Editor of Public Seminar. Her most recent book is Political Junkies: From Talk Radio to Twitter, How Alternative Media Hooked Us on Politics and Broke Our Democracy (Basic Books, 2020). This essay first appeared on her Substack, Political Junkie.

Matthew Kahn is Provost Professor of Economics and Spatial Sciences at the University of Southern California.