SYLVIE DOUGLIS, BYLINE: This is PLANET MONEY from NPR.
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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 (laughter) 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: It's true. And it wasn't just our strong differing opinions either. There is a lot of 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.
VANEK SMITH: (Laughter) That is amazing.
ROSALSKY: We're talking the disco era here.
VANEK SMITH: It was the disco era.
ROSALSKY: This is, like, pre-"Stayin' Alive."
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.
VANEK SMITH: TBD.
ROSALSKY: Hello. And welcome to PLANET MONEY. I'm Greg Rosalsky. And I write the PLANET MONEY newsletter.
VANEK SMITH: I'm Stacey Vanek Smith. I am the host of our daily podcast, The Indicator.
Today on the show, the office - alive or dead. We bring you two episodes of The Indicator, which make the case for and against us going back to the office as we knew it.
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ROSALSKY: 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 at the time.
It was a blockbuster, yes? You're still living large off of the book sales, I bet.
ENRICO 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 tend 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, 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 is 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 watercooler and you go out to a bar together, and then all the 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 caused 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: 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 occupation, 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 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, you know, maybe remote work is actually completely revolutionizing how we work. And, Stacey, I think you might have a few thoughts on this.
VANEK SMITH: I do have some thoughts, Greg. And first of all, you know, in the spirit of sportsmanship, hats off for a very compelling case for the cubicle farm. However, now it is my turn. And after the break, Greg, I'm going to give you not one, not two, but three indicators that will prove to you beyond a shadow of a doubt that the office as we know it is dead.
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VANEK SMITH: There are a lot of jobs that cannot be done remotely. If you are a dentist or a barista or a chef or a carpenter or a surgeon, you basically have to show up in real life to do your job.
ROSALSKY: It's true. It's estimated that about half of jobs in the United States can be done remotely. So that's kind of what we're debating here, the fate of that one-half of working Americans.
VANEK SMITH: Yes. And to help us figure out this fate, I called up an economist who has a foot in several different parts of the job market.
ADAM OZIMEK: Hello. My name is Adam Ozimek. I'm the chief economist at Upwork.
VANEK SMITH: You are also a business owner.
OZIMEK: Yes, I have a couple businesses. I am one of the owners of a bowling alley-restaurant-arcade. I am one of the partners in Joycat Events, which runs beer fests. And I am one of the owners of Kepner Scott Shoes, which is the country's oldest children's shoe company.
VANEK SMITH: Oh, my God, Adam. Like, what do you - do you have free time?
OZIMEK: You know, my secret is I don't like sports. And so...
VANEK SMITH: (Laughter) There you go. Secret to life - don't like sports. So we asked Adam, are we going back to the office? I mean, things have changed radically over the past year and a half. But the office, you know, it evolved over decades. It is powerfully entrenched in our culture and in our psyches. Not only that - Adam points out that traditionally, there has been a kind of stigma around remote work and remote workers.
OZIMEK: There's a great paper by Emma Harrington, who's at Harvard, about how remote workers were sort of viewed at firms before the pandemic and how often there was sort of a stigma associated with it. I mean, you can certainly see it in media portrayals. Like, there was the episode of "The Simpsons" in the '90s where Homer was trying to become a remote worker.
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DAN CASTELLANETA: (As Homer Simpson) Working at home.
VANEK SMITH: You've got a guy. He's, like, at home, taking breaks whenever he wants, like, drinking beer in the middle of the day.
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CASTELLANETA: (As Homer Simpson) What happened to my bird?
ROSALSKY: No, Homer.
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CASTELLANETA: (As Homer Simpson) Explosion imminent.
ROSALSKY: TLDR, the nuclear plant almost has a total meltdown.
VANEK SMITH: See, Greg? You have people working from home, and it almost destroys the world.
ROSALSKY: Yeah. Wow, Homer's really making a case against remote work there.
VANEK SMITH: But Adam says a lot of those negative assumptions around remote work and remote workers have changed.
OZIMEK: We did a survey last year where we asked managers whether they thought productivity had gone up or gone down. And more thought it went up than went down. And that's important.
VANEK SMITH: Really?
OZIMEK: Yeah. Like, 32%, to 23%, thought it had gone up.
VANEK SMITH: That is my indicator for "R.I.P. Office," Greg - 32%. Thirty-two percent of managers thought people were more productive when they worked from home. And notably, only 23% said they thought that productivity went down. So, you know, most managers did not think productivity dropped when people were not physically in the office.
And I think, Greg, that that will make them far less likely to push workers to come back to the office or, you know, especially to, like, lay down ultimatums because remember, Greg, the labor market's really tight right now. Workers have a lot of options. A lot of companies are kind of desperate for workers. Workers want to work from home, so much so that they are willing to pay for it, and I mean this literally. Adam and his team at Upwork did a survey that found that around a quarter of workers said they would consider taking a pay cut to stay remote. Not only that - a big chunk of the people they talked to who were already working remotely said that they would be willing to go to economic extremes to leave the cubicle farm behind for good.
OZIMEK: And we have some research that we just put out looking at the percent of people who are looking to quit because they want to stay remote. And we found that 17% of people are considering quitting their job to stay remote.
VANEK SMITH: Whoa. Like, their job that they have right now, they're considering quitting.
OZIMEK: Yeah. So...
VANEK SMITH: Wow.
OZIMEK: ...That's a lot of people who place a serious economic value on working remotely.
VANEK SMITH: So indicator No. 2, Greg - people are willing to make sacrifices to work from home. And, you know, not to put too fine a point on it, but, like, where are you working from right now?
ROSALSKY: San Francisco.
VANEK SMITH: You and I worked in the same office for years in Manhattan.
ROSALSKY: That's right. That's right.
VANEK SMITH: And if and when our offices open back up in New York, are you going to come back to the office?
ROSALSKY: I hope not 'cause my family and friends are all out here. This is where I grew up. So I hope they don't force me back.
VANEK SMITH: Would you, like, take a pay cut or anything? Would you consider it?
ROSALSKY: If our manager is listening, absolutely not. I'm going to drive a hard bargain.
VANEK SMITH: (Laughter) Fair enough. Well, I just wanted to put that out there before I got to indicator No. 3 - Isaac Newton. So the delta variant has indefinitely postponed office reopenings for everyone from, like, Amazon to Wells Fargo to Apple. Like, it was just all over the news last week and this week.
ROSALSKY: It's been a huge bummer.
VANEK SMITH: I know. I know. The delta variant part is really hard. But I also do feel like the longer we stay away from the office and from, like, crazy rushed mornings and, like, eating your breakfast on the way to the subway, you know, putting your face into some stranger's armpit for 35 minutes...
VANEK SMITH: ...Like, on a packed subway car, like, only to get to work and find that you can't get anything done because your cubicle-mate is being too loud and then there's a fire drill and then, like, someone steals your yogurt out of the communal office fridge and all of the other, like, annoyances that come with working in the office - here is where Isaac Newton comes in. You know he was the guy who identified inertia, right? Objects in motion tend to stay in motion. The more inertia that we get in working from home, the longer we stay away from the indignities of the office, the harder it's going to be to go back. And so, Greg, that is my argument No. 3 - Isaac Newton. This is why I think we're not going back to the office.
And there is, like, an economic upside, also, to the idea that we might not go back. Economist Adam Ozimek told me that he really thinks the shift away from the office could have a really positive impact on the U.S. economy. He says the rise of the so-called superstar cities, which is just a handful of cities where just so much of the country and really the planet's economic activity is concentrated - Adam says that that has been really hard on a lot of the country, a lot of small towns and rural areas.
OZIMEK: You have a falling tax base. You have falling house prices. You have rising vacancies. You know, when the tax base declines, the government cuts back services. That just is one more thing that pushes people away. So you get into this pretty negative downward spiral.
VANEK SMITH: Adam says if workers have a choice of where to live, that a lot of them will pick small cities and rural areas and bring a lot of economic activity into those areas, places where giant companies are not concentrated.
OZIMEK: Economically speaking, I do think that there is potential for that to help a lot of places that have been losing population and to sort of rebalance the economy away from superstar cities and towards the rest of the country.
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VANEK SMITH: In Brooklyn, I'm Stacey Vanek Smith.
ROSALSKY: And this is Greg Rosalsky in San Francisco.
VANEK SMITH: This episode was produced by Darius Rafieyan in Pasadena, Calif. And these episodes at The Indicator were originally produced by Darian Woods in Queens, N.Y., Julia Ritchey in Asheville, N.C., with help from Jamila Huxtable in New Jersey and Gilly Moon in Los Angeles. They were fact-checked by Michael He, also in Los Angeles, edited by Kate Concannon in Seattle, Wash. The Indicator, along with PLANET MONEY, is a production of NPR, which is based in Washington, D.C.
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