By Rachel Puryear, Digital Nomad
Economists from Goldman Sachs recently predicted that for the long term; Americans will be much more likely to work from home some or all of the time, compared with before the pandemic. CNN Business Journalist Anneken Tappe claims that the permanence of remote and semi-remote work for many people hurts the economy, in a response to the economists’ assessments. While Tappe’s concerns are not unfounded, she seems to be missing a lot of positives that folks working from home also has for the economy. The economic benefits of remote work could help balance the negatives.
A few specifics about working from home, before and after the pandemic: During 2020, the number of people working from home doubled from the previous year, and about 42% of the American workforce is currently doing so. Currently, offices is many U.S. cities are filled to only a third of pre-pandemic levels. As the nation recently regressed on Covid with the spread of the Delta variant, returning to workplaces becomes further complicated.
Tappe cites reduced ridership of transit into city centers by commuters, and the loss of money spent by downtown workers at eateries in close proximity to offices; as examples of heavy losses to downtown economies. Of course; Tappe is not wrong about the hardship that having fewer commuters creates to transit workers, and establishments that serve office workers. However, her focus seems to be mainly on the commuter and office park economy.
Local Business is Also Part of the Economy:
People are not going to stop spending money just because they are working from home. They will still go places, get groceries and takeout food, have food and drinks out, and pay for entertainment. If they are working remotely, they will just do those things – and spend that money – closer to home.
Neighborhood establishments are presumably reaping the benefits of more workers staying home on any given day. Travel industries are also seeing benefits of increasing numbers of travel-while-working from digital nomads.
Of course, this is not to dismiss the significance of losses to downtown workers and establishments. No doubt the situation is hard on them, and will put some people out of work or out of business. This is part of the nature of economic cycles. As someone who also experienced a great deal of hardship due to major changes quickly occurring in the legal industry, which was my former profession; I do know what this is like, and I sympathize with others going through these kinds of losses.
At the same time, markets will always change, and people will always have to adapt. Perhaps in the coming years, more businesses that cater to a working clientele will shift locations closer to neighborhood hubs, and away from downtowns. In any event, neither working from home nor working in person is going away, and many people will have hybrid schedules – so in the long run, there will be people going places and spending money everywhere. Economies will adjust as they always have.
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