BEERG Newsletter - Future Work: A round-up of recent developments

According to Professor Nick Bloom, a Stanford economics professor and a leading expert on remote work, “coming to work on Friday feels very 2019. Only 6% of firms with a hybrid #WFH schedule now come in on Fridays. That makes Friday a great day for an easy commute, no lunch line, and a quiet office.” See the full report here.

Manhattan workers are spending at least $12.4bn less a year because remote working arrangements mean 30% fewer days in the office, according to a Bloomberg News analysis using data from Nick Bloom’s WFH Research group. The average Manhattan worker is spending $4,661 less per year on meals, shopping, and entertainment near their offices in New York, compared to $3,040 in San Francisco and $2,387 in Chicago. 

Meanwhile, average retail spending on Mondays in October rose by 28% in the Bronx, 21% in Queens and 18% in Brooklyn, compared with just 2% in Manhattan from the same period in 2019, according to Mastercard data. “Less spending by workers in the central areas means a lot less sales tax revenue,” says Jose Maria Barrero, a professor at Mexico’s Instituto Tecnologico Autonomo and researcher with the WFH Research group. “If you have fewer commuters, that means less revenue.”

European Central Bank (ECB) research suggests that almost a third of euro zone workers want to work from home more frequently than their employer allows them to, and are willing to change jobs to be able to do so. "Workers are more willing to change jobs if they have remote work preferences that exceed those they perceive their employers to have," the ECB study said. "30% of workers had work from home preferences that exceeded what they expected their employers to offer." 

The study said commuting time is the biggest factor influencing a preference to work remotely. "Workers who commute more than one hour each way prefer 10 work-from-home days per month, which is four days more than workers whose commute time is less than 15 minutes." 

Amazon has told its employees to work from the office three days a week, bringing to an end previous guidance from 2021 that left decisions up to line managers. CEO Andy Jassy said in a memo on Friday: “Teams tend to be better connected to one another when they see each other in person more frequently. There is something about being face-to-face with somebody, looking them in the eye and seeing they’re fully immersed in whatever you’re discussing that bonds people together.”

MEANWHILE, in the UK, tax experts have urged the gov­ern­ment to reform and cla­rify laws around home­work­ing, warn­ing that more people were being caught up in “com­plic­ated and incon­sist­ent” rules. Some 44 per cent of UK work­ers spent some or all of the time work­ing from home between Septem­ber 2022 and Janu­ary 2023, accord­ing to Office for National Stat­ist­ics data. While com­par­able pre-coronavirus pan­demic stat­ist­ics are not avail­able, only about 5 per cent of the work­force in 2019 said they worked mainly from home over the year.

The calls for reform come as the trend towards hybrid work­ing at both home and office looks set to last well bey­ond the peak of the pan­demic. More than half of Bri­tons earn­ing more than £50,000 told the ONS they were hybrid work­ers and, under legis­la­tion pro­gress­ing through par­lia­ment, employ­ees will soon have the right to request flex­ible work­ing arrange­ments from the first day of a new job.

“The rules and tax treat­ment for home­work­ing are sur­pris­ingly com­plex and some of the incon­sist­en­cies can be dif­fi­cult to fathom,” said Helen Thorn­ley, tech­nical officer at the Asso­ci­ation of Tax­a­tion Tech­ni­cians, a pro­fes­sional body.

But Sir Edward Troup, former exec­ut­ive chair of HM Rev­enue & Cus­toms, said the rules were based on “19th-cen­tury con­cepts”, which favoured the self-employed, tra­di­tion­ally more likely to work from home, because they were viewed to be tak­ing on more risk. “A clear policy, based ini­tially on achiev­ing a neut­ral out­come, should be the start­ing point,” he said. “There is a policy choice here but cur­rently there is no policy — it has grown ad hoc.”