Working from the office means a pay cut

In recent months, companies have been forcing workers back into the office with increasing frequency. Annoyingly, many of these are big tech businesses that can most easily enable their workers to work remotely.

This trend, likely to continue in 2025, costs workers real money. As Washington Post columnist Catherine Rampell succinctly pointed out: “Return-to-office mandates are, effectively, an invisible pay cut.“

Sure, it doesn’t show up as a line on your pay stub, but you save real money when you work from home. You no longer have an hour-long commute to work and all the costs that come with it. You can also choose to live (and work) somewhere far less expensive — anywhere with a decent Internet connection. 

All this adds up to serious cash savings. 

How much? Well, the numbers vary from person to person and job to job, but American workers value working from home — even two or three days a week — at an estimated 8% of their pay.

According to Nicholas Bloom, a Stanford University economist and remote-work researcher, more educated workers and those with kids at home value working from home even more. They equate the option is worth up to 15% of their salary. 

Actually, the parents are underestimating how much childcare costs. According to the most recent survey from Care, a child care site, respondents spent 24% of their household income on childcare. Even cutting a few hours from that is a big savings. 

It’s not just workers who see savings. That commute savings? A National Bureau of Economic Research (NBER) study in 2023 found that cutting down on commute time remotely saves employees, on average, 72 minutes each day. In turn, employees return 40% of that time to their employer.

Let’s get to the bottom line. One Stanford study showed that remote employees were 22% more productive than their stay-in-the-office colleagues. And Global Workplace Analytics estimates that “organizations save an average of $11,000 per year per part-time telecommute, or 21% higher profitability.”

Why? There are lots of reasons. Remote workers are happier workers, for instance. One study found that 65% of remote workers were “extremely satisfied” with their jobs, compared to 34% of office-based employees.

Other studies show similar results. A YouGov survey found that 36% of US employees would prefer to work entirely remotely, given the choice — more than any other work model. And a recent Gallup survey found that “six in 10 employees with remote-capable jobs want a hybrid work arrangement. About one-third prefer fully remote work, and less than 10% prefer to work on-site.” 

To state the obvious: Happy employees are productive employees. 

Another win for business is that remote work can help retain talent and reduce recruitment and training costs. Let’s also not forget that if someone is working in Asheville, NC, their cost of living is 73% lower than if they worked in San Francisco. And that, my friends, is why no one has yet to talk me into moving to the Bay area for a job. I and other remote workers are a lot cheaper to hire when you let us work from home. 

So, why are businesses insisting people return to the office anyway? CEOs say it’s about increasing productivity, generating better ideas from collaboration, and improving the corporate culture. If you can believe it, some top brass claim that it’s for your own good. As IBM’s CEO, Arvind Krishna, put it, “In the short term, you probably can be equally productive [working remotely], but your career does suffer.”

Yeah, right. For the record, I’ve been working remotely for the entire 21st century, and I’ve done very well for myself in a notoriously difficult field: Journalism.

So, what’s the real reason? Well, if you look closely enough, you will see that, in many cases, it’s not about getting better work from their employees. 

Some of it is that managers want to watch employees. You’ll see this from the lowest supervisor to Elon Musk, who infamously calls working from home “bullshit.” No matter the job title, it’s all about petty power games. 

It’s also about making more money, but not for the given reasons.  For example, suppose a company is tied to shareholders with large corporate real estate portfolios or is entangled with iron-clad long-term leases. In that case, it wants some return from its otherwise useless corporate offices. Office space is no small matter. There’s a billion-plus square feet of vacant office space out there at the moment losing money. 

Another, and I suspect the biggest reason, is that many companies want to get rid of employees. Of course, if they lay them off, then they must deal with bad PR and unemployment. It’s much more cost-effective and looks better if they can get remote employees just to quit rather than return to their cubicles. 

In the long run, this will bite these companies in the rump. The future of white-collar work is remote. For now, though, I fear we will see this trend of forcing people either back into the office or out the door to continue. 

Me? Sorry, you’ll never get me back into an office.