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Pandemic accelerates changes to work culture

Pandemic accelerates changes to work culture

The work-from-home reality that COVID-19 has imposed on many workers around the country could have lasting effects on offices, cities and large swaths of the economy even after the pandemic is in the rearview mirror.

Across various industries, the coronavirus has forced many companies to set up remote work systems for as many employees as possible, mostly among white-collar workers.

While few experts expect those changes to become permanent across the board, business leaders and academics say even relatively small shifts could have lasting implications for life in a post-pandemic economy.

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“So much work done in person creates cities and densely populated areas,” said Wendy Edelberg, director of The Hamilton Project and senior fellow in economic studies at the Brookings Institution.

“The more work that can be done remotely, the more we might see some emptying out of those cities.”

Edelberg says the changes in store are less likely to be a sudden shift in the direction of the economy, but rather a massive acceleration of trends that were already bubbling up.

“These were probably changes that were going to come regardless, but they’re going to come faster, and it’s exactly the speed of change that is disruptive and hard for a labor market to absorb,” she said.

For example, according to research by McKinsey & Company, 25 percent of the labor force was working from home a few years ago. Now, it’s 62 percent.

That same research found that some 80 percent of people said they like working from home, and 69 percent said their productivity was the same or higher as it was before the pandemic.

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Businesses that have recently spent time investing in functional, virtual work routines may continue those practices after a vaccine is widely available in order to save on rent and certain operational costs.

Brick-and-mortar establishments have struggled to compete with growing e-commerce in recent years. By the time the pandemic is under control, more retail stores may be out of business, and people are likely to have gotten used to ordering a variety of items online as those businesses ramp up their operations.

“What is bad news for the retail sector is good news for the industrial sector, and you might even see real estate being repurposed from malls to fulfillment centers,” said Mike Fratantoni, chief economist of the Mortgage Bankers Association.

Not all experts see an economy-wide embrace of virtual work.

“I’m a little more skeptical that we’re going to go virtual going forward. There’s a good track record for bringing people into the office,” said Stephan Meier, a professor of business strategy at Columbia Business School.

Companies in certain industries benefit from in-person interactions, water cooler talk and low level, informal talks that happen among colleagues.

For those types of offices, workers who choose to stay at home may miss out on opportunities for career advancement.

“We can’t just do Zoom. Virtual communities are simply not as powerful as in-person communities,” said Meier.

Even if most people go back to their normal office routines once the pandemic is sufficiently contained, even slight alterations to that resumption of normality could have significant economic effects.

For example, fewer people working in offices means less demand for lunch offerings, shopping and other business and consumer services in urban centers. It could also mean a drop in demand for public and private transportation, as well as lower revenue for dry cleaning services as workers opt for sweats instead of suits.

That pain is likely to hit some sectors of the economy much harder than others.

“As is almost always the case, I think people with less education, people coming from lower income areas are naturally more at risk — that’s how inequality maintains itself,” said Edelberg.

Edelberg also said the pandemic is accelerating another key trend that could make life difficult for low or unskilled workers: automation.

During the pandemic there has been an uptick in self-checkout lanes at grocery stores and app-based ordering for restaurants and bars. And with the explosion of telehealth, doctors’ offices have put in place infrastructure for virtual visits that were rare before COVID-19.

“They’re not going to unlearn that technology,” said Edelberg.

The transition, sped up by the pandemic, could be difficult for many.

“It’s not that there won’t be jobs 10 years from now, it’s just that the transition will be very painful, and policy will play an important role,” she said.