According to the Federal Reserve Economic Data (FRED) website, April 2020 recorded the highest unemployment rate during the COVID-19 pandemic at 14.8%. As of July 2022, the unemployment rate reduced to 3.5%, which is the same as the pre-pandemic level unemployment rate for January and February of 2020. However, the working norms (e.g. where, when and how to work) have altered during these past two and half years as summarized in an American Opportunity Survey report by McKinsey & Company:
- Thirty-five percent of job holders can work from home full-time, and twenty-three percent can do so part-time
- Eighty-seven percent of workers offered at least some remote work embrace the opportunity and spend an average of three days a week working from home
- Younger, more educated, or earn higher incomes tend to have more options to work remotely
- The opportunity to work flexibly differs by industry and role within industries, and has implications for companies competing for talent
- Job seekers highly value having autonomy over where and when they work
- Employees working flexibly report obstacles to peak performance (e.g., isolation-related mental health concerns, child-care arrangements)
With the pandemic waning, companies are demanding their workers to return to office full-time as seen by these headlines:
- 08/15/22, JPMorgan Chase CEO Jamie Dimon claimed that “remote work creates a working environment that’s less honest and more prone to procrastination”. – In a shareholder letter released early 2022, the bank expects 50% of its employees to return to office full-time, with an additional 40% working in a hybrid system. It is also using tracking ID card swipes to ensure compliance with the new work policy and monitoring the time employees spend on Zoom and emails to measure productivity.
- 08/15/22 – Union for AT&T workers extended work from home until the end of March 2023 amidst demand by employer to return to offices.
- 08/15/22 – Apple employees are to report to office three days a week from September 5th.
- 06/05/22 – Tesla’s CEO Elon Musk’s email to his employees: “Everyone at Tesla is required to spend a minimum of 40 hours in the office per week. Moreover, the office must be where your actual colleagues are located, not some remote pseudo-office. If you don’t show up, we will assume you have resigned.”
Discussion Questions:
- Employee’s Perspective: Identify TWO takeaways from the McKinsey & Company report to explain the tradeoffs between work and leisure of employees in a post-pandemic period.
- Employer’s Perspective: Economic Costs = Explicit Costs + Implicit Costs
Select Two of the four news articles, read, brainstorm and explain for each company,- Two major explicit costs
- Two major implicit costs
- Explain how the identified economic costs will change when remote work become part of the company’s labor contract with the employees?
- Self-reflection: Reviewing and applying the Labor–Leisure Choice concepts, what is your preference – return to office (RTO), remote work, or a bit of both? Do explain.
Sources: FRED Economic Data: Unemployment rate; McKinsey & Company: Americans are embracing flexible work – and they want more of it; Yahoo!: JPMorgan CEO Jamie Dimon rips remote work and Zoom as ‘management by Hollywood Squares’ and says returning to the office will aid diversity; The Guardian: AT&T workers fight return to office push: “We can do the same job from home”; Bloomberg: Apply sets return-to-office deadline of Sept 5 after Covid delays; Business Insider: Read the email Elon Musk sent to Tesla employees about returning to the office before saying headcount will increase; InflateYourMind: Section 1: Explicit costs and implicit costs; Unsplash: White corner desk photo
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