The rise of remote work could make the US Federal Reserve’s task of taming inflation a bit easier, while saving employers more than $200 billion, research has shown.
That’s because workers are willing to accept smaller pay increases for the convenience of working from home. In turn, that helps moderate business costs and slow what economists call the wage-price spiral — when companies pass higher expenses on to consumers in the form of higher prices.
About four in 10 companies said they have expanded opportunities to work remotely to lessen pressure on their labour budget over the past year, and a similar number expect to do so over the next 12 months, a working paper from the University of Chicago showed.
The authors found it would reduce wage growth by 2 percentage points over two years.
“This moderating influence lessens pressures and [modestly] eases the challenge facing monetary policymakers in their efforts to bring inflation down without stalling the economy,” the authors wrote.
The report's authors include Stanford University’s Nicholas Bloom, the University of Chicago Booth School’s Steven Davis and Brent Meyer, an economist at the Federal Reserve Bank of Atlanta.
The 2 percentage-point labour savings for employers translates to $206bn, a separate analysis conducted by Mr Davis said. That is based on the $10.3 trillion in total wages and salaries paid to US employees in 2021, figures from the Bureau of Economic Analysis showed.
Fed Chairman Jerome Powell said during June 22 congressional hearings that officials “anticipate that ongoing rate increases will be appropriate” to cool the hottest price pressures in 40 years”.
Steep interest rate rises could potentially tip the US economy into a recession, he said, and managing a so-called soft landing would be “very challenging”.
The authors made clear that their analysis is not “grounds for complacency” about near-term inflation pressures.
“Our evidence says only that the challenge is somewhat less daunting than suggested” by some economists, they wrote.
“The key thing is the reduction on inflation, which is a huge issue for Jerome Powell and setting interest rates,” Mr Bloom said.
The analysis could provide some macroeconomic support for remote-work advocates, who also cite previous research from Mr Bloom and other academics that have found the practice can improve job satisfaction and even lower quit rates without harming productivity.
In earlier research, Mr Bloom found that US workers would be willing to take a 6 per cent pay cut to work from home two three days a week.
On the other side, those pushing for workers to get back to the office often claim that collaboration and innovation can suffer if workers are not together enough.
The debate is playing out everywhere from Silicon Valley to Wall Street. Tesla chief executive Elon Musk has told his employees to get back to their desks or find work elsewhere, which unnerved employees at Twitter, the remote-friendly company Mr Musk wants to acquire.
Apple recently backed away from a plan to have workers in three days a week, after some staff complained. Goldman Sachs Group chief executive David Solomon has called remote work an “aberration”, while JPMorgan Chase chief Jamie Dimon has said it’s no substitute for in-person collaboration and idea generation.
The combined impact of higher borrowing costs and so-called quantitative tightening is expected to come at some cost to jobs. Unemployment was near a 50-year low at 3.6 per cent last month, but wage growth has not kept pace with inflation.
With fears of a recession mounting and employers starting to resort to hiring freezes or even layoffs, there is a growing sense that employees might need to get back to the office more often to stay in the good graces of their bosses.
Still, demand for remote work remains strong: FlexJobs, a job site focused on flexible work arrangements, attracted more than three million visits in May, an increase of 18 per cent compared with the same month last year, researcher Similarweb said.
FULL%20RESULTS
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MATCH INFO
Euro 2020 qualifier
Ukraine 2 (Yaremchuk 06', Yarmolenko 27')
Portugal 1 (Ronaldo 72' pen)
WITHIN%20SAND
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The specs: 2018 Dodge Durango SRT
Price, base / as tested: Dh259,000
Engine: 6.4-litre V8
Power: 475hp @ 6,000rpm
Torque: 640Nm @ 4,300rpm
Transmission: Eight-speed automatic
Fuel consumption, combined: 7.7L / 100km
The specs: 2018 Jaguar E-Pace First Edition
Price, base / as tested: Dh186,480 / Dh252,735
Engine: 2.0-litre four-cylinder
Power: 246hp @ 5,500rpm
Torque: 365Nm @ 1,200rpm
Transmission: Nine-speed automatic
Fuel consumption, combined: 7.7L / 100km
The specs
Engine: 2.7-litre 4-cylinder Turbomax
Power: 310hp
Torque: 583Nm
Transmission: 8-speed automatic
Price: From Dh192,500
On sale: Now
Electoral College Victory
Trump has so far secured 295 Electoral College votes, according to the Associated Press, exceeding the 270 needed to win. Only Nevada and Arizona remain to be called, and both swing states are leaning Republican. Trump swept all five remaining swing states, North Carolina, Georgia, Pennsylvania, Michigan and Wisconsin, sealing his path to victory and giving him a strong mandate.
Popular Vote Tally
The count is ongoing, but Trump currently leads with nearly 51 per cent of the popular vote to Harris’s 47.6 per cent. Trump has over 72.2 million votes, while Harris trails with approximately 67.4 million.
RESULTS
Manchester United 2
Anthony Martial 30'
Scott McTominay 90 6'
Manchester City 0
Profile
Co-founders of the company: Vilhelm Hedberg and Ravi Bhusari
Launch year: In 2016 ekar launched and signed an agreement with Etihad Airways in Abu Dhabi. In January 2017 ekar launched in Dubai in a partnership with the RTA.
Number of employees: Over 50
Financing stage: Series B currently being finalised
Investors: Series A - Audacia Capital
Sector of operation: Transport
The%20Secret%20Kingdom%20
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Another way to earn air miles
In addition to the Emirates and Etihad programmes, there is the Air Miles Middle East card, which offers members the ability to choose any airline, has no black-out dates and no restrictions on seat availability. Air Miles is linked up to HSBC credit cards and can also be earned through retail partners such as Spinneys, Sharaf DG and The Toy Store.
An Emirates Dubai-London round-trip ticket costs 180,000 miles on the Air Miles website. But customers earn these ‘miles’ at a much faster rate than airline miles. Adidas offers two air miles per Dh1 spent. Air Miles has partnerships with websites as well, so booking.com and agoda.com offer three miles per Dh1 spent.
“If you use your HSBC credit card when shopping at our partners, you are able to earn Air Miles twice which will mean you can get that flight reward faster and for less spend,” says Paul Lacey, the managing director for Europe, Middle East and India for Aimia, which owns and operates Air Miles Middle East.
