Factors driving a productivity explosion(fortune.com)
fortune.com
Factors driving a productivity explosion
https://fortune.com/2023/12/09/what-is-fueling-productivity-boom-four-reasons/
138 comments
https://web.archive.org/web/20231210022009/https://fortune.c...
> Essentially, Daco adds, productivity has rebounded above its 2017-to-2019 norms, which he believes indicates that it’s “not just a quick bounceback,” but actually stronger than the prior trend—a positive development.
There's the quote that implies that return to office is not the explanation for this productivity rebound. Work from home is still far higher than it was in 2019, and so is productivity. While far from a smoking gun, this is more up to date evidence that execs who threatened to fire people who didn't RTO are as wrong as they seemed. The first executive who recants on their intuition that RTO would bring about an explosion of productivity above WFH will earn my respect.
My position isn't that every job that can be WFH should be, but that every person who wants to be WFH should be able to, and everyone who wants to work in an office should be able to. Even if working in an office is less productive, and costs the company a lot more money, and reduces the pool of talent, some employees still want it. Some executives do too: these people will be happier working together, so they should have that option.
There's the quote that implies that return to office is not the explanation for this productivity rebound. Work from home is still far higher than it was in 2019, and so is productivity. While far from a smoking gun, this is more up to date evidence that execs who threatened to fire people who didn't RTO are as wrong as they seemed. The first executive who recants on their intuition that RTO would bring about an explosion of productivity above WFH will earn my respect.
My position isn't that every job that can be WFH should be, but that every person who wants to be WFH should be able to, and everyone who wants to work in an office should be able to. Even if working in an office is less productive, and costs the company a lot more money, and reduces the pool of talent, some employees still want it. Some executives do too: these people will be happier working together, so they should have that option.
IMO, there needs to be some kind of compensation for folks who have to go into office. Not all jobs can be WFH. At a minimum, if you have to travel in to work, that time should be paid/count towards 40.
EDIT: On average, WFH folks save 5 hours a week by not having commute. That means folks going into a workplace work 5 hours more. That's not even including all of the other perks/flexibility/cost savings WFH provides.
EDIT: On average, WFH folks save 5 hours a week by not having commute. That means folks going into a workplace work 5 hours more. That's not even including all of the other perks/flexibility/cost savings WFH provides.
I think you have it backwards.
By staying home and giving up my office, I am taking on the cost burden of the work facilities (office space, internet, etc). These were previously paid by the employer and are now paid by me. I should be compensated.
I might save money by not commuting, but that expense has NOT been transferred to my employer -- it's GONE. I saved that money and nobody has to pay for my commute now.
By staying home and giving up my office, I am taking on the cost burden of the work facilities (office space, internet, etc). These were previously paid by the employer and are now paid by me. I should be compensated.
I might save money by not commuting, but that expense has NOT been transferred to my employer -- it's GONE. I saved that money and nobody has to pay for my commute now.
In both cases there is an uncompensated expense by the employee. Either it’s time commuting or it’s the office space. The main disagreement here is which should be valued more. In practice the massive rise in people voluntary working from home strongly implies most people value the commute time more than the lost office space. Arguably they should both be compensated, although HN consists primarily of salaried workers well above any minimum wage so that compensation is likely to come at the expense of cash/equity comp anyway.
> In both cases there is an uncompensated expense by the employee.
In both cases the employee factors in those expenses into the active rate they charge. If pay generally remained the same when moving to the home (and in cases when returning to the office), it seems the cost is generally deemed equivalent.
In both cases the employee factors in those expenses into the active rate they charge. If pay generally remained the same when moving to the home (and in cases when returning to the office), it seems the cost is generally deemed equivalent.
This is yet another example of the fallacy of assuming that The Almighty Market will perfectly set all costs.
Most employees do not have the luxury and privilege to be able to demand a raise any time they feel like they deserve one, and actually get it—either directly, from their current employer, or indirectly, by changing jobs.
Yes, this includes tech employees. Remember, we don't all work within the Silicon Valley bubble.
Most employees do not have the luxury and privilege to be able to demand a raise any time they feel like they deserve one, and actually get it—either directly, from their current employer, or indirectly, by changing jobs.
Yes, this includes tech employees. Remember, we don't all work within the Silicon Valley bubble.
It seems you're confusing individuals with the general labour market. In aggregate, the workforce will adjust. The aggregate employee isn't going to put themselves in a money losing situation just to have a job. An individual might, but nobody is talking about individuals (except you).
No; that only works if the labor market, in aggregate, resembles an ideal free market.
It does not. There are far too many constraints on people's employment and the information they have for it to be amenable to "free market theory".
It does not. There are far too many constraints on people's employment and the information they have for it to be amenable to "free market theory".
There is no mention or implication of there being a free market. Start a new thread if that is a subject you are interested in. Nobody in this thread is.
Yeah, a nice home office setup is an expense, especially if you live near (or, especially, in) a major city. But, for most people, commute is a net negative even
if it means having a sub-optimal setup at home. And at most companies, people still have the option of commuting even if it may be a poorer experience than pre-Covid.
> commuting ... may be a poorer experience than pre-Covid
Curious, what do you mean? I was WFH from 2006 to 2021, and I feel like the commute improved a bit over that time with the new vehicles and navigation apps, but otherwise not much changed, so maybe I miss something that was better immediately pre-pandemic?
Curious, what do you mean? I was WFH from 2006 to 2021, and I feel like the commute improved a bit over that time with the new vehicles and navigation apps, but otherwise not much changed, so maybe I miss something that was better immediately pre-pandemic?
It takes me often longer drive into Boston either in the morning or in the evening as it ever did. GPS doesn't really help. I know where I'm going and the patterns are pretty predictable.
(Re-reading, offices are also poorer experiences for many people post-Covid given that a lot of people aren't there.)
(Re-reading, offices are also poorer experiences for many people post-Covid given that a lot of people aren't there.)
Tax deduction for home-office space?
https://www.irs.gov/newsroom/how-small-business-owners-can-d...
https://www.irs.gov/newsroom/how-small-business-owners-can-d...
That only works for self employed.
Yeah, and your employer can save costs and dramatically reduce their office lease footprint.
[deleted]
Even if my commute is only 15 minutes, I save probably 10 hours a week working from home because I can toss in the laundry while I work, walk the dog during a non-participatory meeting, load the dishwasher while I wait for a file to copy, etc. The amount of time I free up is absolutely insane. I can actually just be after work rather than doing chores.
They’d need to find a system that doesn’t encourage long commutes. If drive time counts toward the 40, an extreme case may try to live 4 hours from work. Drive in, have lunch, drive home.
People with short commutes would end up picking up the slack for those with long commutes, which could create some tension in the workplace. Why should those who are actually in the office working get compensated at the same rate as someone doing 20% less due to their shorter in-office work day?
People with short commutes would end up picking up the slack for those with long commutes, which could create some tension in the workplace. Why should those who are actually in the office working get compensated at the same rate as someone doing 20% less due to their shorter in-office work day?
If commuting is going to be compensated, then the compensation needs to be flat. If it costs more to employ people with longer commutes, those candidates will invariably be discriminated against in regards to hiring/firing, and the candidates most effected will invariably be lower income, as longer commutes is such a common feature of lower cost housing. It would become an anti-social-mobility mechanism if not done right.
Requiring large US employers to compensate on-site office workers in full for their commuting costs would be one way of discouraging long commutes, as laid out by the IRS' Publication 463 ( https://www.irs.gov/publications/p463 ). If they want employees in the office so badly, let them assume the full cost of transportation & food/beverages.
That would only be a starting point, though. Because as others have already pointed out, employers still aren't compensating on-site employees for the time they spend commuting -OR- the time wasted preparing for the commute. The average one-way commute time in the US is just under 30 minutes. But in order to get to work at 9:00am, I used to have to wake up at 7:30am. That's an extra 1.5hrs per day, on top of the 1hrs spent commuting.
Finally, there's the human cost associated with working in the office. I didn't have time to help my kid get ready for school; he had to take the bus, which (yep) costs more money than if I could just drive him. When I got home, I usually missed dinner with my wife & kid. And I'd rarely have time to take care of all the daily chores: laundry, dishes, grocery shopping. Which means that once the weekend finally does arrive, I have to spend my free time working to take care of those remaining chores.
Now that I work from home, I can roll out of bed, drive my son to school, shower, get coffee, & show up to work at 9:00am every day. I can attend non-participant meetings while also doing laundry or dishes, while wearing a wireless headset. My cat spends part of his days in my office, which makes the work days feel less like work. I can grab a late lunch, pickup my son from school, & be home in same time it'd normally take me to get lunch downtown. I can make my own lunch at home, too, which is usually healthier & costs way less than eating near the office. When I'm done at work, I can actually have dinner with my family now. And when the week is over, I can actually spend most of my free time doing stuff I want to do, besides chores.
Honestly, I'm not convinced that employers could ever fairly compensate workers for what it costs us to commute. But forcing them to pay some of that price, instead of placing the majority of that burden on workers' shoulders, would be a start.
That would only be a starting point, though. Because as others have already pointed out, employers still aren't compensating on-site employees for the time they spend commuting -OR- the time wasted preparing for the commute. The average one-way commute time in the US is just under 30 minutes. But in order to get to work at 9:00am, I used to have to wake up at 7:30am. That's an extra 1.5hrs per day, on top of the 1hrs spent commuting.
Finally, there's the human cost associated with working in the office. I didn't have time to help my kid get ready for school; he had to take the bus, which (yep) costs more money than if I could just drive him. When I got home, I usually missed dinner with my wife & kid. And I'd rarely have time to take care of all the daily chores: laundry, dishes, grocery shopping. Which means that once the weekend finally does arrive, I have to spend my free time working to take care of those remaining chores.
Now that I work from home, I can roll out of bed, drive my son to school, shower, get coffee, & show up to work at 9:00am every day. I can attend non-participant meetings while also doing laundry or dishes, while wearing a wireless headset. My cat spends part of his days in my office, which makes the work days feel less like work. I can grab a late lunch, pickup my son from school, & be home in same time it'd normally take me to get lunch downtown. I can make my own lunch at home, too, which is usually healthier & costs way less than eating near the office. When I'm done at work, I can actually have dinner with my family now. And when the week is over, I can actually spend most of my free time doing stuff I want to do, besides chores.
Honestly, I'm not convinced that employers could ever fairly compensate workers for what it costs us to commute. But forcing them to pay some of that price, instead of placing the majority of that burden on workers' shoulders, would be a start.
> But in order to get to work at 9:00am, I used to have to wake up at 7:30am. That's an extra 1.5hrs per day, on top of the 1hrs spent commuting.
What preparation do you need for the commute that you wouldn't need working from home?
Any why do those preparations need 1 whole hour? When I'm in a rush, it takes me about 10 minutes from getting out of bed to being out the door.
What preparation do you need for the commute that you wouldn't need working from home?
Any why do those preparations need 1 whole hour? When I'm in a rush, it takes me about 10 minutes from getting out of bed to being out the door.
Working from home, you can wear clothes that are less polished and professional. (Depending on the needs of the day, you might not even need to take a shower and get properly dressed at all!)
You can pop back down to the kitchen at 9:15 and grab a breakfast to bring back to your seat.
You can hear the dog barking to get back in right from your desk, rather than having to wait for them to be done, then put them in the crate, before you go.
You know that the route to your desk won't have a random delay of 0-20 minutes, so you have to leave early just to guarantee arriving on time.
You know that there won't be a line at the coffee.
Even ignoring all those little improvements, there's a big difference between "the maximum speed I can get from bed to door in an emergency" and "the speed I am comfortable moving to get ready to go every morning of every workday."
You can pop back down to the kitchen at 9:15 and grab a breakfast to bring back to your seat.
You can hear the dog barking to get back in right from your desk, rather than having to wait for them to be done, then put them in the crate, before you go.
You know that the route to your desk won't have a random delay of 0-20 minutes, so you have to leave early just to guarantee arriving on time.
You know that there won't be a line at the coffee.
Even ignoring all those little improvements, there's a big difference between "the maximum speed I can get from bed to door in an emergency" and "the speed I am comfortable moving to get ready to go every morning of every workday."
To me the solution is clear: if a job requires in person attendance, compensate the worker for one additional hour per shift for commute. This still provides some compensation without needing to discriminate based on commute distance, and also not requiring businesses to pay more when the employee has the choice but prefers an office.
Or quit docking people for lunch time. That's kind of ridiculous and disrespectful anyway. 100% robber Baron factory rules.
I think you could simply set basic productivity goals and they would fail to meet those if they never worked.
Forgive the bluntness but this is like suggesting that garbage men should be compensated over software engineers for having a nastier job.
You get what you negotiate, not what you sacrifice. If you feel you should be paid extra for going to the office (I agree), demand so!
You get what you negotiate, not what you sacrifice. If you feel you should be paid extra for going to the office (I agree), demand so!
> garbage men should be compensated over software engineers for having a nastier job
Honestly, I have always felt that this would be true in any reasonable society. I'm a software engineer and I frequently think about what an absurd power structure we manage to maintain, in which those of us fortunate enough to sit at desks can keep the lower classes oppressed in this way. It seems very unstable to me.
Honestly, I have always felt that this would be true in any reasonable society. I'm a software engineer and I frequently think about what an absurd power structure we manage to maintain, in which those of us fortunate enough to sit at desks can keep the lower classes oppressed in this way. It seems very unstable to me.
Hum, it's not unstable at all.
I do agree that there's something wrong. But the reason it's structured this way is exactly because it's stable. It is what you get by letting people settle with minimum interference.
I do agree that there's something wrong. But the reason it's structured this way is exactly because it's stable. It is what you get by letting people settle with minimum interference.
What scale to we measure stability on? How long has it been this way? Our current modus vivendi in the United States has existed for what, 80 years? 100 at most? 5 generations at the outside, and arguably far less.
The pattern persists beyond and before the US, though.
Sigh. I think you're right.
The differentiation between the collars is largely complexity and scope. Solving problems for a worldwide audience is possible in software but a garbage collector helps a region of town.
Wages are completely eclipsed by wealth, a far more significant differentiator.
Wages are completely eclipsed by wealth, a far more significant differentiator.
garbage handlers are not oppressed
having less money than others doesn't make you oppressed
having less money than others doesn't make you oppressed
Deeper than this, when I was a teen, guys tried to convince me to take the sanitation department test. Because it was such an awesome job (in their estimation) and so easy to get!
A recurring aspect of any injustice or inequality in the world is the folks affected by it are told to fix when they're almost always powerless to do so. If we can all agree that it's not fair for folks to commute unpaid, why is it fair to have the burden on them to "negotiate better"?
Software engineers are very often empowered to do so—and those few years of people switching jobs for better ones is what it looks like.
I actually failed to understand this argument. Historically no body has a problem with this and it is always considered to be the employee’s responsibility (to commute to work.) Or is this not true?
If we think less about the asymmetry between employers and employees, and think they are 2 parties entering into an agreement, the employee also has to contribute something to their work. They are bringing in their expertise and availability, how that is achieved is a matter of agreement. If the agreement said your availability to be in the office is up to you, then you are free to optimize on your side how to optimally achieve this.
I have seen people choose to live far away in better condition, trading for longer commute time, and vice versa. Why should it not be your responsibility? Ie if employer pay for commute time and possibly cost, then the incentive for me is to live as far away as possible.
If we think less about the asymmetry between employers and employees, and think they are 2 parties entering into an agreement, the employee also has to contribute something to their work. They are bringing in their expertise and availability, how that is achieved is a matter of agreement. If the agreement said your availability to be in the office is up to you, then you are free to optimize on your side how to optimally achieve this.
I have seen people choose to live far away in better condition, trading for longer commute time, and vice versa. Why should it not be your responsibility? Ie if employer pay for commute time and possibly cost, then the incentive for me is to live as far away as possible.
I think in general less people going to the office is better for those who have to go to the office as well. Less density of population, less competition for housing, less congestion on roads. The more offices that are in place, the more housing prices go up, the more congestion etc.
Sure, I'll live the farthest from the office in that case!
I mean I would have liked this too but it isn't realistic beyond what some companies have already been doing for years before covid, which is to pay for monthly public transit passes or towards the cost of it.
On the flipside it would mean companies limiting who is allowed to be in an office if that became mandatory. You live more than 15 min from the office? Sorry, WFH for you!
Factory job that absolutely can't be done WFH? You better come live in our communal housing where you have 5 min walk time to work or you are not getting that job!
I mean I would have liked this too but it isn't realistic beyond what some companies have already been doing for years before covid, which is to pay for monthly public transit passes or towards the cost of it.
On the flipside it would mean companies limiting who is allowed to be in an office if that became mandatory. You live more than 15 min from the office? Sorry, WFH for you!
Factory job that absolutely can't be done WFH? You better come live in our communal housing where you have 5 min walk time to work or you are not getting that job!
[deleted]
There’s a different explanation on why WFH has increased productivity: it has expanded the labor pool available to employers beyond the geographic confines of workers within a ~ 1 hour physical commute. That is, employers and employees can more easily find mutually beneficially matches.
I think this is main factor driving increased productivity, not that WFH is inherently more productive.
I think this is main factor driving increased productivity, not that WFH is inherently more productive.
Although it would be surprising if WFH weren't inherently more productive given that it provides so many more productivity optimization opportunities.
Well, nobody is really comparing WFH to "in-office", as in employees having a physical office with a door, they're comparing it to open offices which is the worst possible option for software development.
I think that's generally what it means to be in-office at a software company. Having dedicated offices is exceptional, open floor plans are the rule. Note that this article isn't just talking about the software industry, though, so I take your point.
Many companies have used return to office as a soft layoff. Many employees quit versus large layoffs.
Things should normalize as companies optimize their workforces, office leases roll off, and remote/hybrid work becomes standardized.
Things should normalize as companies optimize their workforces, office leases roll off, and remote/hybrid work becomes standardized.
> There's the quote that implies that return to office is not the explanation for this productivity rebound. Work from home is still far higher than it was in 2019, and so is productivity.
...or maybe there's another factor, and this doesn't explain anything at all. Correlation does not imply causality.
We have LLMs now, we didn't have them in 2019, and productivity is up. Ergo, increased productivity must be caused by LLMs. Right?
...or maybe there's another factor, and this doesn't explain anything at all. Correlation does not imply causality.
We have LLMs now, we didn't have them in 2019, and productivity is up. Ergo, increased productivity must be caused by LLMs. Right?
LLMs have only been in use for 1 year and mostly in software, WFH has been widespread for almost 4 years
[deleted]
You can pick any of a thousand other correlates and make spurious causal arguments that are just as logically valid as the one you're making.
[deleted]
GPT-3 launched in 2020.
Many of the recent articles in the media about productivity are inaccurate, there is a big difference between plain English "productivity" and the economic concept of productivity. The quoted productivity #s are aggregates measured by the BLS, the only thing it measures is aggregate US output (~= to real GDP) divided by total US hours worked (# employees * avg hours/employee).
The reason productivity is up so much lately is that for the past two years:
- Employment (https://fred.stlouisfed.org/series/PAYEMS) has been increasing at 1-2% annualized rate (because unemployment rate/labor force participation rate hasn't been changing, so employment growth has come from population growth, which was 1-2% when current 18-30 year-olds were born)
- Real GDP (https://fred.stlouisfed.org/series/GDPC1) has been increasing at 3-5% annualized rate
The reality is there is a giant consumption boom the past few years, but minimal increase in employment since we were already at full employment, so by definition there will just be increase in aggregate productivity. It is unrelated to concepts like how hard are people working.
The reason productivity is up so much lately is that for the past two years:
- Employment (https://fred.stlouisfed.org/series/PAYEMS) has been increasing at 1-2% annualized rate (because unemployment rate/labor force participation rate hasn't been changing, so employment growth has come from population growth, which was 1-2% when current 18-30 year-olds were born)
- Real GDP (https://fred.stlouisfed.org/series/GDPC1) has been increasing at 3-5% annualized rate
The reality is there is a giant consumption boom the past few years, but minimal increase in employment since we were already at full employment, so by definition there will just be increase in aggregate productivity. It is unrelated to concepts like how hard are people working.
>because unemployment rate/labor force participation rate hasn't been changing
Unemployment in the US has been falling for some time (apart from a brief spike in 2020).
https://www.statista.com/statistics/269959/employment-in-the...
You would expect this to have an effect on productivity as low value jobs are the ones most likely to be left unfilled.
Unemployment in the US has been falling for some time (apart from a brief spike in 2020).
https://www.statista.com/statistics/269959/employment-in-the...
You would expect this to have an effect on productivity as low value jobs are the ones most likely to be left unfilled.
The mistake is the singular belief in productivity.
If you nail that, and the org doesn't want WFH, they'll just move the goalposts to collaboration. Or face time. They're free to retcon a rationale onto their self-justified decision.
If you nail that, and the org doesn't want WFH, they'll just move the goalposts to collaboration. Or face time. They're free to retcon a rationale onto their self-justified decision.
I'd assert the mistake is thinking this is about an objective measure of productivity vs more pragmatic commercial real estate investments and in cases of poor leadership/management, needing to have people physically present to provide a sense of control.
Outside of manufacturing widgets/hour, it feels incredibly difficult to even pin down productivity.
Day to day, I bang out some code. Am I doing it better or worse than last week? No idea. WFH, definitely leaves me less drained from commuting, but I cannot point to any hard metrics one way or the other.
Day to day, I bang out some code. Am I doing it better or worse than last week? No idea. WFH, definitely leaves me less drained from commuting, but I cannot point to any hard metrics one way or the other.
Another totally plausible explanation is that CPI massively underreports inflation. Productivity is inflation adjusted. If you have 10% inflation but report it as 5%, then it will appear that you’ve gained 5% productivity when you haven’t.
This story neglects to mention one of the biggest factors likely driving productivity: remote work expands the labor pool available to employers, thus making it easier for employers to find the right match for the job at the right price.
Before the pandemic, employers were mainly limited to employing workers within approximately an hour commute. With this restriction loosened, they can now more easily found workers better suited (i.e more productive) for a role than the previously available local options.
Over time, this will work to increase aggregate wages, as productivity increases are the main driver of wages.
Before the pandemic, employers were mainly limited to employing workers within approximately an hour commute. With this restriction loosened, they can now more easily found workers better suited (i.e more productive) for a role than the previously available local options.
Over time, this will work to increase aggregate wages, as productivity increases are the main driver of wages.
Taken to its logical conclusion, companies offering WFH would then be morally justified in replacing US workers with cheaper third world options. UK salaries in tech for example are about 1/4-1/3 of US levels.
At some point time difference kills any productivity gain. West Coast to West Europe is barely workable even if everyone in the "secondary" zone is self-sufficient.
However, hiring engineers from Latam could indeed be an option to replace US workers if they can't offer an edge. The issue here is the language barrier.
However, hiring engineers from Latam could indeed be an option to replace US workers if they can't offer an edge. The issue here is the language barrier.
Productivity and the link to wages has diverged lots since the 1970s in the US. In a vacuum it certainly follows that productivity should enable wage growth, this hasn’t played out as much in the real world. Once you factor in inflation, wages have hardly risen in comparison to productivity.
The reality is that the wage level is the intersection what an employee thinks they can get and what the employer thinks they can get away with, and usually the employer has the upper hand.
The reality is that the wage level is the intersection what an employee thinks they can get and what the employer thinks they can get away with, and usually the employer has the upper hand.
> Once you factor in inflation, wages have hardly risen in comparison to productivity.
Which stands to reason. We have continually increased overall productivity by adding more workers (notably robots), not by individually becoming more productive. If you double productivity by doubling the workforce, when you divide up the fruits each worker still ends up with the same amount.
We saw wage growth during the transition away from our primarily agrarian economy, but that's because wages were largely not a thing in said agrarian economy. People sold things (crops, livestock, etc.), not their time. As people started to leave the farm to work in the factory, wages, which were previously zero, had nowhere else to go but up.
But now that most everyone sells their time, we've achieve peak wage. As you point out, any apparent wage growth going forward will simply be in alignment with inflation.
> The reality is that the wage level is the intersection what an employee thinks they can get and what the employer thinks they can get away with
While that is definitely true, given enough time and negotiation (of which we have had plenty for most jobs) wages will converge on the productivity the worker is providing. So while you can most definitely cherry-pick individuals who have wages below their productivity and individuals who have wages above their productivity, the overall market ultimately settles where wages and productivity meet.
Which stands to reason. We have continually increased overall productivity by adding more workers (notably robots), not by individually becoming more productive. If you double productivity by doubling the workforce, when you divide up the fruits each worker still ends up with the same amount.
We saw wage growth during the transition away from our primarily agrarian economy, but that's because wages were largely not a thing in said agrarian economy. People sold things (crops, livestock, etc.), not their time. As people started to leave the farm to work in the factory, wages, which were previously zero, had nowhere else to go but up.
But now that most everyone sells their time, we've achieve peak wage. As you point out, any apparent wage growth going forward will simply be in alignment with inflation.
> The reality is that the wage level is the intersection what an employee thinks they can get and what the employer thinks they can get away with
While that is definitely true, given enough time and negotiation (of which we have had plenty for most jobs) wages will converge on the productivity the worker is providing. So while you can most definitely cherry-pick individuals who have wages below their productivity and individuals who have wages above their productivity, the overall market ultimately settles where wages and productivity meet.
There is healthy debate about the ‘great uncoupling’ in the US between 1970 and 2010. There is no debate however that historically productivity increases have been a necessary precondition for sustained wage growth.
Moreover, the present discussion is about whether WFH may or may not be affecting productivity, not my tangential side comment about the link between productivity and wages.
Moreover, the present discussion is about whether WFH may or may not be affecting productivity, not my tangential side comment about the link between productivity and wages.
Remote work expanding the pool of worker supply will cause wages to go down. If there are 100 people competing for a position, there is much less upward wage pressure than if there are only 10 people. Conversely, there are now more jobs for remote workers to apply to, so they also have a larger supply of jobs to choose from, pushing wages up, theoretically. At the end of the day it’s probably closer to a wash than anything else.
Personally I counted over 5 emails I’ve received in the past year at work saying something like “great job staying productive at home- we’re just as (or more) profitable than pre-pandemic!”
And then later in that email having some rhetoric along the lines of “we’ll be working towards a return to office in order to make sure we’re giving it our best.”
It’s either one or the other- don’t doublespeak to me.
It’s either one or the other- don’t doublespeak to me.
Have an exit plan? Just in case . . .
We founded a software startup in 1999. And I've worked as fractional CTO recently. My impression, we have not utilized productivity due to cloud, better tools, better SaaS (Hubspot, Linkedin, Pipedrive, Google Analytics etc.).
To me it looks like all productivity gains have been eaten up by something. I feel Scrum is very undproductive, this might be one explanation for development, but marketing etc.?
To me it looks like all productivity gains have been eaten up by something. I feel Scrum is very undproductive, this might be one explanation for development, but marketing etc.?
My guess is developer productivity slumped with the move to the modern web stack.
Things I managed to deliver in my first year of the first startup with Django + Ajax/Vuejs were a number of multiyear multiteam developments in my second startup (scaleup) that had dozens of microservices and Angular SPA.
I'm only seeing comparable productivity on the backend these days when teams are using AWS native services.
I'm only seeing comparable productivity on the backend these days when teams are using AWS native services.
I'll second that, see https://www.radicalsimpli.city/ ;-)
What really matters is whether there is high quality communication, not all this other superficial stuff.
Nobody cares about your comfort, costs, etc. All of you who keep stubbornly making those arguments are completely missing the point.
Yes, you may be more productive working from home simply because your work is full of dense text, and exacting and deliberate decisions. Not even the dumbest exec or manager is saying you're not. These articles aren't about you. The majority of office workers aren't programmers.
Nobody cares about your comfort, costs, etc. All of you who keep stubbornly making those arguments are completely missing the point.
Yes, you may be more productive working from home simply because your work is full of dense text, and exacting and deliberate decisions. Not even the dumbest exec or manager is saying you're not. These articles aren't about you. The majority of office workers aren't programmers.
I can't get past the paywall, but commute traffice where I live is near pre-pandemic-levels suggesting a significant amount of non-WFH is going on; so I'm curious if there are specific stats pulled in the article pointing to increased productivity from just the WFH cohort vs the economy as a whole?
My drives into Boston for work when I go suggest that traffic is at least as bad as ever. (Although commuter rail on the rare occasions when I do, seems distinctly below pre-pandemic levels.) But overall things seem to be a lot closer to the before-times than not even if people who live in the city have some influence (though if I had an easy walking or public transit commute I'd go into the office a lot more).
Am I the only one that thinks 'Productivity' is a euphemism for more work for less pay?
huge plus for parents
Yep it’s true. If you have managers who understand remote work it’s great.
This article is pathetic. It doesn't even mention the threat of being laid off as a source of motivation to work harder, which I suspect is the real mechanism here.
Anecdotal, but from what I have seen: people who are fearing being laid off are either a) already looking for another job or b) cruising until they do get laid off.
Unlikely with unemployment this low
Unemployment statistics take into account all jobs. This productivity increase (really only 5.2% in a quarter) only takes into account business workers. Also unemployment is basically worthless if you have a high-paying job, it's literally better to go work for Walmart than collect unemployment while looking for another white-collar job at the moment. And unemmployment numbers only take into account people collecting unemployment. So no, I don't think the unemployment numbers relevant.
I am saying:
why in a very strong labor market would the threat of being laid off be compelling greater productivity improvements than before?
why in a very strong labor market would the threat of being laid off be compelling greater productivity improvements than before?
Because the strong labor market is not equally distributed.
OK, thanks. While I am still a bit skeptical this is definitely a more plausible claim now.
Class warfare making high productivity white collar work harder, haha.
Class warfare making high productivity white collar work harder, haha.
Proving that all their jobs can now be outsourced to other countries for half the price. Thanks a lot.
This is a joke right? Most remote companies still have timezone restrictions, and the closest places to outsource from America in terms of timezone generally have great worker protections (aka, hard to fire).
For the most part, you'll find American companies that are remote are simply hiring from all over America, not the world.
For the most part, you'll find American companies that are remote are simply hiring from all over America, not the world.
Most remote companies don’t need time zone restrictions, and many Indian contractors are already working weird schedules to at least partially align with US time zones. I don’t expect that every company can outsource every WFH job, but the idea that they can’t because it might make a conference call hard is, frankly, rank nonsense.
On paper, sure.
I have fired offshore teams and hired US ones because I prefer people who think, care, look at the big picture, share their experience, and write quality working software, once.
Offshore software felt like someone building a car by spotwelding everything together for record times.
I have fired offshore teams and hired US ones because I prefer people who think, care, look at the big picture, share their experience, and write quality working software, once.
Offshore software felt like someone building a car by spotwelding everything together for record times.
Also really good developers overseas are not that much cheaper, especially when you add the cost of hiring and managing that far away.
The operating phrase is really good developers. Because most companies are just churning out basic CRUD micro services. Infact companies emphasis on standardized frameworks is part of this trend. It makes rather easy to replace one dev with another. Companies can and are using vast quantities of developers at far away locations.
Those jobs are most likely to be replaced by AI or by skilled developers using AI as a force multiplier.
I already know developers using AI successfully to automate boilerplate and routine code generation, leaving them more free to spend time on the hard stuff.
AI is cheaper than outsourced labor.
I already know developers using AI successfully to automate boilerplate and routine code generation, leaving them more free to spend time on the hard stuff.
AI is cheaper than outsourced labor.
This is just not remotely true. I am not sure what you are referring to but even between the US and Canada it is completely incorrect, let alone Eastern Europe and the US. What are you possibly talking about?
Burning fossil fuels for X*Y travel to Z place to do the same job they could do at home, is better?
If they can do it cheaper elsewhere in the world then they clearly are not focusing on the premium values of more expensive workers.
Naturally, having native speakers with good education should be seen as better than importing. If importing is ever actually better, then one has to question the value of the education being given to the premium workers.
If they can do it cheaper elsewhere in the world then they clearly are not focusing on the premium values of more expensive workers.
Naturally, having native speakers with good education should be seen as better than importing. If importing is ever actually better, then one has to question the value of the education being given to the premium workers.
Recruiting is hard. Global recruiting is really hard.
As others mention, there are a range of reasons why Joe Coder keeps his job. Realistically, one of those reasons (like it or not) is that management can see him every day and can go to his cube for face-to-face meetings. They never could do that with Jorge Coder (who is in the same timezone by the way). Well, now it doesn't matter.
Before the pandemic, I was told by private equity people that if a job can be done from home, it can be done from India. And the job I had back then is now more or less done from India.
If they could, private equity people would reduce you and your family to chattel slavery and Fargo you into a woodchipper when your wasted body finally gives out. They're the problem, not remote work.
That sounds like efficient market allocation of resources. There is no inherent reason you deserve to live in luxury as most do in the West unless you've contributed to society.
> There is no inherent reason you deserve to live in luxury as most do in the West unless you've contributed to society.
I'd certainly love to apply this logic to our wannabe-aristocracy, whose sole contribution to society is gormlessly doling out access to the capital that they fell ass-backwards into without any merit on their part.
I'd certainly love to apply this logic to our wannabe-aristocracy, whose sole contribution to society is gormlessly doling out access to the capital that they fell ass-backwards into without any merit on their part.
Private equity is an inevitability of a financialised capitalist economy, so what are you suggesting? Some sort of vigilante justice?
There are innumerable ways to avert the worst iniquities of private equity without going Full Communist Revolution. Of course, the longer that plutocrats try to wring the system dry, the more likely the latter is to happen, but I suppose it would be incoherent of me to expect private equity to understand the concept of thinking in the long-term.
That’s the problem right there. We never try to solve problems until it can’t be ignored. We’re tackling economic inequity the same way as global warming; by mostly ignoring it.
Well you don't know it's a real problem until it cannot be ignored.
I get what you’re saying but that’s not really true, is it? You can ignore social injustice, economic inequality and environmental harm but that doesn’t mean it isn’t a problem. In fact, one might even argue that just because the decision makers can ignore a certain problem, it doesn’t necessarily mean it isn’t impossible to ignore by a large swathe of the population.
That makes no sense. I know it’s a real problem.
[flagged]
We've banned this account for using HN primarily for ideological battle. That's not allowed here; regardless of what you're for or against, it destroys what this site is supposed to be for.
Please don't create accounts to break HN's rules with.
https://news.ycombinator.com/newsguidelines.html
Please don't create accounts to break HN's rules with.
https://news.ycombinator.com/newsguidelines.html
The people who end up at the top will be just as prone to the trappings of power and wealth as the capitalists. It’s human nature.
The job absolutely can be done from India. The location isn't the question; the right person is, and the sort of people who say that are the sort who suck at hiring, and don't care. "Hire cheap labor."
Thanks to an increasing supply of jobs in India, salaries have been rising at the top end of the market. In another 5-10 years, it won't be much cheaper to hire in India as compared to the US.
The Indian workers you want are either poached by quality h1-b visa giving US companies (Intel, apple) or are already working for FAANG offices in India, those Indians also want and get US caliber pay.
You’re welcome to try to use TCS/Infosys or worse places to outsource, but the results will be predictable.
You’re welcome to try to use TCS/Infosys or worse places to outsource, but the results will be predictable.
Ah, so I wasn't even replaced by the good Indians. Not so great for the ol self esteem.
That's actually sort of what I'm witnessing happening in my workplace. They day they are onky getting the most qualified candidates, but it has been a while since we've seen a "qualified" new hire from.anywhere but India.
[deleted]
Any job that can be done in an office, can be done in an office in India - does that not hold?
Of course not, unless you move the entire office and all roles. It’s like you’re intentionally missing the point (or at least the stated reason) behind returning folks to the office.
To be clear, this is not a defense of RTO policies.
To be clear, this is not a defense of RTO policies.
> "Of course not, unless you move the entire office and all roles."
Yes, do that. If you can close down one role and replace it with an Indian in India doing that role cheaper, then with the same logic you can close down the entire office and replace it with an office of Indians in India doing those roles, cheaper.
Somehow, the first applies and is used a threat for return to office, but the second 'magically' doesn't apply. If you need to keep westerners doing the jobs for any reason, and you can't outsource those tasks to India for any reason, then the people may as well be westerners WFH.
Yes, do that. If you can close down one role and replace it with an Indian in India doing that role cheaper, then with the same logic you can close down the entire office and replace it with an office of Indians in India doing those roles, cheaper.
Somehow, the first applies and is used a threat for return to office, but the second 'magically' doesn't apply. If you need to keep westerners doing the jobs for any reason, and you can't outsource those tasks to India for any reason, then the people may as well be westerners WFH.
Exec leadership/management doesn't want to move to India, therefore moving the whole office is a ridiculous non-sequitur that has absolutely nothing to do with the ease of moving a few roles or role-sets. This isn’t a complicated thing to understand.
Pretending this isn’t the case because you really want to be angry at me or as a reason to riff on whatever form of Management Bad this is, is weird, but you do you.
Pretending this isn’t the case because you really want to be angry at me or as a reason to riff on whatever form of Management Bad this is, is weird, but you do you.
Why would they have to move? Are there no Indians who can lead, be executives, manage a team, run an office? Replacing a WFH role with the same role in India doesn't involve the WFH person moving to India.
Is this a serious response? You talked about moving the entire office. Clearly the owner neither wants to live in Bangalore, nor wants to sell the company to someone who does, ergo, the entire business does not move. On the other hand, he has an entire QA team working from home and sees no reason not to offshore them.
I feel like you’re being intentionally obtuse in not understanding why one scenario is fundamentally nonsense, and not the pedantic gotcha you think it is.
I feel like you’re being intentionally obtuse in not understanding why one scenario is fundamentally nonsense, and not the pedantic gotcha you think it is.
I feel like you're being intentionally obtuse and pointing at the obvious case so you don't have to address the point. Yes yes, Billy Bob CEO isn't going to replace himself with someone else, but a company big enough to employ offshore workers and deal with international taxes and employment regulations is big enough to have more than one department and more than one office which could be offshored wholesale. And the financier quoted above, if they can get the same development from an offshore company for less, is going to finance the offshore company instead of Billy Bob.
That is, the implicit threat "if you don't RTO, we will offshore you" comes with the counter "if you do RTO, we won't offshore you" - except if offshore was actually tempting, they could and would offshore your entire office even after you RTO to it, and "the market" would/will offshore the whole company.
To the extent that doesn't happen, "you working from home is indistinguishable to an Indian working from India" isn't true. Timezone, language, culture,
"RTO because we need the extra productivity of everyone in the office - but if you don't, we'll accept the reduced productivity, just with other cheaper people" is also nonsense - then why not offer the WFH American less money to stay WFH? No? Because it's a punishment and not a real business decision.
That is, the implicit threat "if you don't RTO, we will offshore you" comes with the counter "if you do RTO, we won't offshore you" - except if offshore was actually tempting, they could and would offshore your entire office even after you RTO to it, and "the market" would/will offshore the whole company.
To the extent that doesn't happen, "you working from home is indistinguishable to an Indian working from India" isn't true. Timezone, language, culture,
"RTO because we need the extra productivity of everyone in the office - but if you don't, we'll accept the reduced productivity, just with other cheaper people" is also nonsense - then why not offer the WFH American less money to stay WFH? No? Because it's a punishment and not a real business decision.
Or that they just weren’t doing that much work in the office either.
I have been WFH for over a decade now.
Before that I survived the first dot com bubble, 2008 housing crisis. I have been through rounds of layoffs and all sorts of outsourcing projects.
At some point it all boils down to numbers. Why hire a Bay Area resource when a Kansas one is cheaper? Why hire a Kansas one when someone globally is cheaper?
I think that the only reason we haven't seen deeper cuts and more tech layoffs and outsourcing is that everyone is skittish about sending work to Eastern Europe. With that venue cut off the remaining tech markets remain higher priced and look a lot less appealing.
There are reasons to be in an office sometimes. Planing, team building, those exchanges around the coffee pot. The random engineer who prarridogs and spouts an answer to the problem you're discussing with someone else. Pick your poison, a week every month, a month every quarter get that team building and face time in, pick up the value it has and then go back to WFH and zero commute... The answer isn't no office its "hot desk when it matters"!
Before that I survived the first dot com bubble, 2008 housing crisis. I have been through rounds of layoffs and all sorts of outsourcing projects.
At some point it all boils down to numbers. Why hire a Bay Area resource when a Kansas one is cheaper? Why hire a Kansas one when someone globally is cheaper?
I think that the only reason we haven't seen deeper cuts and more tech layoffs and outsourcing is that everyone is skittish about sending work to Eastern Europe. With that venue cut off the remaining tech markets remain higher priced and look a lot less appealing.
There are reasons to be in an office sometimes. Planing, team building, those exchanges around the coffee pot. The random engineer who prarridogs and spouts an answer to the problem you're discussing with someone else. Pick your poison, a week every month, a month every quarter get that team building and face time in, pick up the value it has and then go back to WFH and zero commute... The answer isn't no office its "hot desk when it matters"!
Another factor improving productivity is AI tools. I for one, am more productive writing code with the help of a generative AI.
I am maybe slightly more productive. The hard parts of the job are not solved by generated code.
I’m not an “AI” booster, but - you’re right, but also the hard parts of the job aren’t actually the majority of the job, and the new tools are definitely making a bunch of the other stuff take less of my time. They don’t do the job for you, but they’re pretty good leverage if you use them right.
(Although I’ll say I’m also a bit lazier - I’ve accepted some autocomplete suggestions that are definitely worse than what I’d write myself, but they’re a whole lot faster than my version.)
(Although I’ll say I’m also a bit lazier - I’ve accepted some autocomplete suggestions that are definitely worse than what I’d write myself, but they’re a whole lot faster than my version.)
helping me arrive to final code faster by AI writing all my ideas and playing around . It makes hardest part easier.