WFH's Impact on Our Quality of Life
The Economist Magazine has written a balanced piece about Work from Home (WFH). In the first half of the piece, the author sketches out the short run productivity loss for such workers. In the 2nd half of the piece, the author discusses the quality of life gains from having this freedom. In this column, I want to expand upon the quality of life gains.
In my 2022 Going Remote book, I emphasize that much of the gains from WFH are due to our diversity concerning our “own idiosyncratic conception of the good life”.
Consider a Google tech worker who loves her mother and the mom lives in Indiana. Google has a Chicago office and this worker can live close to mom and go the Chicago HQ perhaps 2 days a week. Back in 2019, such permutations were not possible.
A WFH person with cultural roots to a Baltimore can live there where housing is cheap and work in Washington DC, Philly or even NYC.
A Power Couple used to have to live in a commuting range of a major city that offers jobs for both of them. Now, this WFH Power Couple if based in the Northeast can live anywhere in range of the Amtrak Railroad corridor. The permutations of where people live and work grow to almost infinity here. Economists will note the similarity to the economics of new goods. WFH opens up all sorts of permutations.
A prominent economist recently called me from Maine to tell me that Maine now features all of these WFH workers living there and engaging WFH (at least during the summer time). So note the temporal and spatial permutation here. WFH workers have so many new margins of adjustment to spend time with their kids when they are sick or have a special school day. My father is a doctor and he never attended any of my special school days. Don’t feel sorry for me but do recognize that the new generation of Dads will better connect with their kids because of WFH. These are substantive gains.
Note the geographic angle here. WFH is effectively a type of faster commute. People can live further from where they work. This is especially valuable for those with special needs. Hedonic estimation cannot properly measure the growth in consumer surplus here.
In 2019, there were many workers living close to San Fran and NYC who didn’t want to live there but chose their location because they needed to be in the office 5 days a week. In our 2023 economy, these individuals have new freedoms to live where they want to live if they only have to go to the office 2 days a week.
Economists call this horizontal differentiation. A type of musical chairs emerges as Center Cities will increasingly attract those who actually want to live there.
Finally, a point about office productivity externalities. Don’t forget your Roy Model. If the Deadwood go to the office less due to WFH, then the average interaction quality at the office in our WFH economy actually increases because the active folks represent a larger % of the workers in the office.
Critics of my optimism often say; “Matt, what about those whose skills do not qualify them for our WFH economy? “ First, more and more jobs are becoming WFH eligible due to technological advance but second don’t forget the Local Multiplier effect. For service jobs, they go where the pockets of $ locate. If rich WFH workers move to a ski area, this creates service sector jobs there and those with a taste for that lifestyle can now move there and be employed.
WFH accommodates our diversity. Back in 2019, we weren’t building housing in Superstar Cities and we weren’t road pricing. This squeezed the Middle Class. The rise of WFH creates a more equal spatial economic geography and actually makes the center cities face more competition to retain footloose people. They will respond by reducing their taxes and improving their public services or they will experience population loss. Spatial competition is good!