Will Remote Working Replace The Office? : Planet Money : The Indicator from Planet Money The rise of remote work and telecommuting during the pandemic raises questions about the future of the office. Today the argument for why offices are here to stay.

Long Live The Office

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SYLVIE DOUGLIS, BYLINE: NPR.

(SOUNDBITE OF DROP ELECTRIC SONG, "WAKING UP TO THE FIRE")

GREG ROSALSKY, HOST:

Stacey Vanek Smith, it's so nice to see you on a Zoom call again.

STACEY VANEK SMITH, HOST:

Greg Rosalsky, it's always nice to see you, too. And a few weeks ago, on a call not unlike this one, you and I started debating the future of work, namely if workers would be going back to the office in the future or if the way that we work has permanently changed. And we had pretty different opinions.

ROSALSKY: Yeah, as much as I love remote work, and I want to stay a remote worker, I kind of believe that, for most industries, the office is here to stay. And then, we started talking about this and thought maybe this is kind of, like, an interesting debate for the show.

VANEK SMITH: And then, we thought maybe this is an interesting debate for two shows...

(LAUGHTER)

VANEK SMITH: ...Because there is so much data and such strong opinions on both sides. So, Greg, you took the side that is in line with what you think is going to happen, which is that the office is here to stay, that we're all going to go back to the office. And I took the side that I happen to believe, which is that things have permanently changed, that we're probably not ever going to go back to work the way we used to. But, apparently, Greg, this is not a new debate.

ROSALSKY: Right. So I actually found this amazing old article. It was in The Economist magazine, and it was published all the way back in 1975. We're talking the disco era here.

VANEK SMITH: It was the disco era.

ROSALSKY: This is, like, pre-"Stayin' Alive."

(LAUGHTER)

ROSALSKY: It was written by the deputy editor of The Economist. His name was Norman Macrae. And Macrae said that, basically, this newfangled device called the personal computer was soon going to kill the office. And when the office died, he said, that would lead to what he called the end of the urban age. The title of it was Tomorrow, We're Hicks.

VANEK SMITH: Of course, the exact opposite happened. Companies, like, in the tech industry, for example, Google and Apple, they built these ginormous offices and put them all right next to each other in Silicon Valley. And the office really kind of expanded what it was in people's lives. In a lot of cases, these became, like, a second home. I mean, they would have fancy food and, like, concerts and dry cleaning and free meals, and this became, like, a cultural shift. You know, like, the office is a fun place, and why would you ever want to leave?

ROSALSKY: And the question is, why did that happen? And kind of explaining it, I think, strengthens the case why the office is still alive. And so today on THE INDICATOR, we hear from the economist Enrico Moretti, who's thought a lot about this.

ENRICO MORETTI: In my mind, the new normal will look a lot like the old normal.

ROSALSKY: And he will provide the case for why the office is very much alive.

About a decade ago, the economist Enrico Moretti wrote this really popular book called "The New Geography Of Jobs." It sort of explained why a small number of superstar cities had this sort of gravitational pull - think, like, New York or Seattle or San Francisco. Their gravity brought in more and more office workers who helped them get richer and richer.

VANEK SMITH: And, meanwhile, a lot of smaller cities and towns started to lose people. They started to shrink and fall behind economically.

ROSALSKY: The book was super-influential. Even President Barack Obama recommended the book. It was a blockbuster, yes? You're still living large off of the book sales, I bet.

MORETTI: I don't think it was a blockbuster in terms of sales, but I think it was - it became part of the conversation, and that's what I care about.

ROSALSKY: Enrico wrote that superstar cities all had one thing in common. They were filled with brainiacs - you know, fancy degrees - idea generators. They were attracted to live in these places because of good-paying jobs in innovative industries, like tech or finance or publishing, you know, office jobs.

VANEK SMITH: Right. And as people migrated to these superstar cities, they, you know, made a lot of money at their jobs, and they wanted to spend it, and that had this ripple effect across these economies. It created all these other jobs, like chefs and bartenders and lawyers and accountants and yoga instructors, you know, people who could provide services and businesses for people who had money to spend.

ROSALSKY: All this cool stuff to do made the gravitational pull of these superstar cities even stronger, pulling in more well-paid people with cash to spend.

MORETTI: Yeah, the gap between these winning cities, these star cities, and the average cities in the U.S. has grown for the past 20 years.

ROSALSKY: So why did that happen? I mean, office space and housing is so much more expensive there. Economists have done a lot of thinking about this, and they use this term to explain it - they call it agglomeration.

MORETTI: And it refers to the fact that by concentrating, the innovation sector had to be more productive and more innovative. And there's a growing body of evidence that points to the fact that when scientists, engineers and innovators move from small clusters to larger clusters, the same person tends to become more creative and more productive.

ROSALSKY: In other words, if you take, like, a computer programmer in - I don't know - like, Pine Village, Ind., and plop her down in, like, Palo Alto, Calif., within a bit of time, she seems to get better at her job.

VANEK SMITH: But why does she get better at her job? Economists have identified two important factors here. The first is something they call matching opportunities. For example, when lots of tech firms, workers and investors clustered in Silicon Valley, it created a lot of opportunities for productive matches between them - like, our computer programmer could quit her job at Apple and go work at Google, for example, without having to move. And she's probably more likely to run into someone who's looking for a computer programmer in the middle of Silicon Valley.

ROSALSKY: There's an even more important factor in this theory for why innovative companies and workers tend to physically gravitate next to each other. The basic idea is that smart people get smarter when they're around other smart people.

MORETTI: There's a growing body of evidence that points to the fact that our best ideas come from serendipitous interactions with others, often within our firms, but sometimes also outside our firm.

VANEK SMITH: The key thing behind this theory is that these interactions between people tend to be not planned. They're spontaneous and serendipitous. Like, you know, you randomly meet your coworker at the water cooler, and you go out to a bar together, and then, all of a sudden, you stumble on this great idea, this great innovation for an app or a new kind of website or a podcasting business or something.

ROSALSKY: Enrico believes that factors like these, which cause us all to cluster together, haven't gone away. For so much of our jobs, he says, the Zoom room just doesn't measure up to the benefits of physically living and working near each other, which is why, he says, the office is alive and kicking.

MORETTI: I've been looking at data on job openings, and I counted how many job openings are 100% work from home.

ROSALSKY: And he found that the number of fully remote office jobs was only about 7%. That is triple what it was before the pandemic, so that's a big deal, but that still leaves the vast majority of all new office jobs looking a lot like the old normal, or at least, you know, they will look like the old normal when the economy opens back up more fully.

MORETTI: Now, I don't mean that everything will be like before. Let's be clear. I think that the share of work from home will increase and has already increased. I believe that, for some firms, and for some type of occupations, probably, it will be very large. But, if we're looking at the overall labor market in the U.S., or if you're looking at the tech labor market in the U.S., in my mind, the new normal will look like a lot like the old normal, with maybe one or two days a week of work from home.

VANEK SMITH: And so, bottom line, Enrico says employees will probably still have to live near the office.

ROSALSKY: But I got to say, there was this ironic subtext to my conversation with Enrico.

MORETTI: Yeah, I'm in the - I'm in Italy. I'm in the Alps.

ROSALSKY: Oh, I love it up there.

VANEK SMITH: What?

(LAUGHTER)

ROSALSKY: That's right. Enrico was working remotely in the Italian Alps.

VANEK SMITH: Oh, my God. I - what?

ROSALSKY: I mean, you know, as smart as Enrico is, he could be wrong, and maybe remote work is actually completely revolutionizing how we work. And so you have an episode for us.

VANEK SMITH: Yes. Tomorrow we're going to look at the case for the new normal, that we will not be going back to the office, and that the office as we know it is actually dead.

(SOUNDBITE OF MUSIC)

VANEK SMITH: This episode of THE INDICATOR was produced by Darian Woods in Queens and Julia Ritchey in Asheville, N.C. It was fact-checked by Michael He in Los Angeles, Calif. THE INDICATOR's edited by Kate Concannon in Seattle, Wash., and is a production of NPR based in Washington, D.C.

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