In a June 15th blog post entitled “Productivity Down as Remote Work Up?”, Arnold Kling discusses recent US productivity numbers, which show weakening productivity per worker in the aggregate. Kling’s argument is straightforward: he points to the mathematics of the “GDP Factory” idea of macroeconomics and, consequently, the calculation of productivity can mislead if one is not careful about looking at the underlying figures.
Kling goes on to discuss how many combine the productivity figures with the Work From Home (WFH) trend which has been happening since the governments locked everything down in response to the COVID-19 pandemic at the beginning of 2020. The conclusion, then, is that WFH is bad for productivity. But Kling notes that’s not necessarily the case, and not just because of the mathematical fluke of how productivity is calculated. Work From Home has a large increase in well-being associated with it, as well as the reduction of dead time such as commuting and annoying meetings:
I think that WFH is a huge increase in well-being, regardless of what the GDP factory is reporting. Whatever the drawbacks are, business executives should be trying to overcome them, rather than go back to the bad old days. If you need to get employees together, do so at short offsite retreats.
Keep upgrading the technology for interpersonal interaction on line. Evaluate what you have and keep tweaking. Emphasize quality of communication rather than quantity (I am very dubious of Slack on those grounds).
I certainly do not dispute the well-being effects of WFH. When Virginia and Maryland shut everything down in 2020, my life improved along many margins. At the time, I lived an hour away from George Mason University, where I was a graduate student. There were obligations I had to attend to in person several times a week, and with Northern Virginia traffic, that one hour drive could sometimes take three hours. Once everything went online, my personal productivity and well-being skyrocketed, for sure.
However, I do question WFH’s ability to result in long-run productivity gains, especially as new workers enter the labor force. Much knowledge of our jobs is tacit and, in many cases, inarticulable. There are numerous pitfalls new employees can fall into about how things are done in the firm, or what expectations are, etc. Every system has its own quirks, and those cannot be understood unless one is actively interacting with the system.
Institutional knowledge is transferred from employee to employee through interaction, imitation, and observation. Yes, meetings can be boring, and who hasn’t wanted to shout at a boss “Just leave me alone and let me work!” But, I contend, they also can serve as a vital knowledge-transmission service. The office exists for a reason, and given how much communication is non-verbal, I strongly doubt communication software can replicate those knowledge-transmitting avenues. Small chats between workers, or even just seeing how others solve the same problems, help expand our knowledge. Humans are social creatures, and we work better when we work together.
Kling ends his post by stating “We should not convict WFH. It has not been proven guilty.” True. But I think economic theory gives us enough evidence to indict WFH.
Jon Murphy is an assistant professor of economics at Nicholls State University.
