Working from home is saving commuters around the world 72 minutes a day, the time they’re splitting between their jobs, leisure, and caregiving, a new study shows.
Remote staff is saving the most time in China, where forgoing the trek to and from one’s workplace is freeing up 102 minutes a day, according to the study published this month by the National Bureau of Economic Research. Serbian workers saw the smallest savings of 51 minutes, while those in the US also saw a comparatively low 55 minutes spared.
More Time at Home
Remote work saved many commuters over an hour in 2021 and 2022
Source: National Bureau of Economic Research study
The team of economists from Europe, Mexico, and the US —including Stanford University’s Nicholas Bloom — calculated daily commute times from surveys of workers across 27 countries in the past two years.
When accounting for those who never worked remotely in that time period, the economists estimate that work-from-home saved about two hours of travel time per worker, per week. That will be cut in half after the pandemic ends given employers’ plans to bring staff back in, the researchers say.
That amounts to 2.2% of a 46-hour workweek, with 40 paid hours plus six hours of commuting, the paper found. As such, the private value of the time savings is around 2.2% of after-tax earnings in the post-pandemic economy.
“Commuters strongly dislike unpredictable travel times, and automobile drivers strongly dislike congested road conditions,” the economists said. “Thus, long commutes, unpredictable commute times, and congested road conditions push the private value of time savings above the after-tax wage.” Likewise, the inverse is true.
Workers are hardly sloughing off. Businesses are the biggest beneficiaries of travel time savings, with workers devoting 40% of their saved time toward primary and secondary jobs. About a third went toward leisure activities and 11% went to caregiving, the study found.
Bond investors may be underestimating the financial challenges facing San Francisco, the wealthy West Coast tech citadel, in a work-from-home world.
The persistence of remote work in San Francisco shows how the COVID-driven restructuring of the American office can have broad and unexpected implications throughout the economy — even in the normally sleepy market for U.S. municipal bonds.
Vacancy rates in San Francisco's office sector soared to a record high of 27% percent at the end of last year — and the city’s downtown area has had the worst pandemic recovery in the country, according to the San Francisco Chronicle.
Like New York, San Francisco derives a considerable part of its revenue — somewhere in the neighborhood of 20% — from taxes tied to the value of office buildings.
- San Francisco officials have estimated that the hollowed-out office sector could cut city tax revenues by as much as $200 million annually in coming years.
While municipal bond markets seem to have priced in pressure on New York City's real estate-related tax revenues, they seem to have given San Francisco something of a pass, Barclays analysts wrote in a recent note.
- The analysts pointed to a rally since the start of the year in some San Francisco municipal bonds, versus bonds issued by New York that had similar characteristics.
- They argue that the rally didn't seem to take into account the impact of remote work on San Francisco's tech sector, compared with New York's finance-dominated economy where workers have been slowly nudged back to the office.
"The big difference with San Francisco is the more permanent remote work or the layoffs," Clare Pickering, municipal bond strategist at Barclays, tells Axios. "When you look at the tagging — going into offices — it hasn't come back as strongly."
As Pickering points out, San Francisco's situation hasn't been helped by the recent run of tech layoffs.
For all the job cuts, the San Francisco area's unemployment rate remains remarkably low, at under 3%.
- That suggests that for now, the layoffs might be less a problem for tech workers — who can often easily find new, even remote jobs — than for the landlords who once rented their employers' spaces.
The bottom line: We're still in the very early innings of the remote work revolution — but it's already touching a broad range of investors.
A slew of media companies and tech firms have begun to announce sweeping job cuts as the economy continues to face uncertainty.
For millions of people across both industries, the layoffs feel like whiplash.
An unprecedented number of jobs were cut early on in the pandemic, as a response to temporary advertising headwinds. Now, it looks like those fears are trickling back.
After a rough winter with cuts at entertainment giants like Warner Bros. Discovery and Disney, digital media brands like Morning Brew and Vice Media, and newspapers like Gannett, more media companies started the year with news of layoffs.
- Adweek, a trade publication covering the ad industry, told staff it was cutting about 10% of its workforce, impacting 14 people.
- Vox Media, which owns The Verge, Thrillist and New York magazine, laid off 7% of its staff. That amounts to about 133 roles.
- Fandom, an entertainment news company, laid off workers across some brands it had acquired last year including Giant Bomb, GameSpot, and Metacritic. The company had employed fewer than 500 people and the cuts affected less than 10%, per Variety.
- NBC News and MSNBC laid off about 75 staffers across divisions, per Adweek. These cuts followed a broader structural reorganization.
- The Washington Post has been bracing for layoffs. The Jeff Bezos-owned company is expected to cut a single-digit percentage of its workforce soon, as announced by the paper's publisher and CEO in December.
Dramatic cuts also have extended across the tech industry. Several companies have attributed the layoffs, in part, to over-hiring during the pandemic.
- In January alone, Spotify (600), Google (12,000), Microsoft (10,000), Salesforce (8,000), Amazon (18,000), Coinbase (950), and Vimeo (140) have let go of staffers, amounting to nearly 50,000 tech workers in total.
- Twitter, now under the management of Elon Musk, has continued to cut staff. Musk said Twitter has about 2,300 employees, down from 7,500 when he took over in October.
Companies have enacted other cost-cutting measures. In November, Vice Media CEO Nancy Dubac said her company planned to cut costs by "up to 15%."
- In December, NPR canceled its summer internship program as it attempts to make $10 million in budget cuts.
Employers are shedding temporary workers at a fast rate, a sign that broader job losses could be on the horizon.
In the last five months of 2022, employers cut 110,800 temp workers, including 35,000 in December, the largest monthly drop since early 2021. Many economists view the sector as an early indicator of future labor-market shifts.
Temporary employment declined before some recent recessions and during economic slowdowns. Temporary workers, typically employed through staffing agencies, are easy for companies to bring on board—and let go.
“For me, it’s a real warning sign,” said James Knightley, chief international economist at ING. “The jobs market may not be invulnerable to the downturn story.”Cutbacks in temporary jobs add to other evidence that companies are adopting more of a cost-cutting stance, Mr. Knightley said. Corporate job-cut announcements are up significantly from a year earlier and business executives are somber about the outlook, he said.
The labor market is historically strong but slowing. Employers added 223,000 jobs in December, the smallest gain in two years. Economists surveyed by The Wall Street Journal expect higher interest rates to trigger job losses and a recession this year as the Federal Reserve’s interest-rate increases filter through the economy.
Pullbacks in temp employment preceded broader payroll declines by several months in recent downturns, including the 2001 and 2007-09 recessions. For instance, employment in the temp sector began falling in early 2007, while employment across all sectors started to descend about a year later.
Still, trends in the temp sector are volatile and don’t necessarily signal a recession is imminent. Temp jobs fell four months in a row in 1995, for instance, during a period of economic growth.
Tom Gimbel, chief executive at staffing firm LaSalle Network, said the easing of temporary employment demand is concentrated among some large companies seeking to trim costs. Those firms are cutting temporary workers hired for special projects, such as beta testing at a tech company, he said.
But many smaller businesses are still looking to scoop up temporary workers, Mr. Gimbel said. Demand remains high for many types of temp help including in software development, healthcare, and manufacturing, he said.
“The small- to medium-sized companies are still bringing on people because they were losing in the war for talent against big companies that had an endless supply of money and budgets to hire people,” he said.
The broader decline in temp employment coincides with other indications of a labor-market slowdown. Hiring is cooling. Workers are taking longer to find jobs and staying on unemployment benefits longer. And workers’ average weekly hours are back at pre-pandemic levels. Manufacturers’ overtime hours slipped in December to the lowest level since the pandemic lockdowns and the aftermath of the 2007-09 recession.
Usually, companies adjust their payrolls after they experience a decline in demand, said Gad Levanon, chief economist at the Burning Glass Institute.
Weaker demand is emerging in industries related to the manufacturing, transportation, and selling of goods. Consumer spending on services, though, is still running strong as sectors including leisure and hospitality continue to recover from the pandemic, he said.
“What we probably will have in the economy in the coming months is continued growth in consumer services and a decline in the rest of the economy,” he said. Mr. Levanon expects the economy as a whole will contract by the middle of this year.
Some of the declines in temporary employment could reflect a normalization after aggressive hiring throughout much of 2021 and into 2022. Many businesses—such as supermarkets and food processors—bulked up with short-term staff to help meet surging demand.Some in the staffing industry see another explanation for a declining number of temp workers: permanent hiring. The labor market is still historically tight, with unemployment matching a half-century low in December of 3.5%.
Traci Fiatte, chief executive of staffing firm Randstad North America, said attrition and turnover remain high, with job seekers confident in their employment opportunities. As a result, companies are trying to hold tight to workers.
“If they find a good temporary employee, for retention purposes, they will take them on as a permanent employee,” Ms. Fiatte said.