Malcolm Gladwell and the CEO of Whole Foods are arguing workers need to return to the office, but a new Fed study shows remote work is here to stay

• Remote work is sticking around despite fervent opponents, the New York Fed said.
• Various CEOs and intellectuals have pushed back against telecommuting in recent months.

Various economists, CEOs, and intellectuals have forecasted the death of working from home. But remote work isn't going anywhere, according to researchers at the Federal Reserve Bank of New York.

The US's quick pivot to telecommuting in early 2020 saved the economy from an even more calamitous recession. Yet debates over the permanence of remote work have raged since vaccines were rolled out early last year. On one side of the discourse, supporters of telecommuting see the practice as granting workers valuable flexibility and opening up office space for other uses. Opponents, meanwhile, argue working from home cuts down on productivity, and that something is lost when employees aren't physically in the same area.

Writer Malcolm Gladwell recently said that working at home isn't in people's "best interest," adding "it's really hard" to feel a sense of belonging while working remotely.

JPMorgan's chief executive Jamie Dimon has repeatedly pushed back against telecommuting, saying in May that it "does not work for young people" or those "who want to hustle."

Whole Foods CEO John Mackey said in August that young people "don't seem like they want to work," highlighting the chain's difficulty with recruiting grocery store workers.

New surveys conducted by the New York Fed suggest those leaders and thinkers are on the losing side of the argument. Roughly 20% of service work in the New York region is now being conducted remotely, as is 7% of manufacturing work, businesses told the Fed researchers in an August survey. While down slightly from the readings seen in June 2021, both shares more than double the pre-pandemic averages.

About one-in-three service employees worked remotely for an average of 3.3 days each week, Fed economists Jaison Abel, Jason Bram, and Richard Deitz said. In the manufacturing sector, only 9% of employees worked remotely for an average of 2.8 days each week.

The number of remote workers is expected to fall over the next year, but not by much. The share of work done remotely in the service sector will likely decline a modest 2 percentage points, to 18%, the team said.

Manufacturers, meanwhile, "already appear to have adjusted to a new normal," the economists added.

That remote work is sticking around shouldn't shock its opponents. The shares of work done remotely in August were "quite close" to the amount of remote work that managers and business owners expected to see after the pandemic when asked about a year ago, the Fed economists said.

Whether remote work has improved productivity — or if its opponents are correct in backing in-person work — remains to be seen. Of the service businesses that expanded remote work throughout the pandemic, 30% said productivity had declined, while 21% said it rose, according to the report. About 28% of manufacturers that expanded telecommuting said it worsened productivity, while just 12% noted improvement.

Sectors where office work is more common were more likely to have positive productivity changes from remote work, the team said, offering one explanation for why so few manufacturers saw significant benefits.

The post-crisis economy is still taking shape, and major uncertainties remain. The New York Fed's survey, however, signals remote work is a mainstay of the new economic normal, and that, for some businesses, letting workers telecommute will be a permanent boon.