The Economic Impacts of Working From Home?
By Madeline Bogdjalian | May 5, 2022
Before the Covid-19 pandemic hit, very few people knew what “Zoom” was. Then suddenly in March 2020, virtually every industry across the globe shifted to some form of remote work, many utilizing Zoom. In 2019, Zoom had roughly 10 million users a day. In 2022 that number has skyrocketed to over 300 million users a day. Zoom has become an integral part of the lives of so many people across the globe. Whether it be religious institutions, primary education, higher education, pharma-biotech companies, health systems, investment banking firms; zoom has changed the way these businesses and institutions function.
The world has beneficially adapted to zoom due to its incredible convenience. Why travel and pay for numerous expenses such as airfare, hotels, and food all to attend a meeting, when it can be done from your own home? Many people are choosing to work from home and do not want to return to their offices, thus causing corporations to adapt to hybrid models and incorporate zoom into their post-pandemic function. However, this negatively impacts surrounding industries on both a local and a global scale, furthering stagnating post-pandemic recovery. For example, on a local scale, independent coffee shops and restaurants near large office buildings lose their consumer base when the majority of their former customers are not coming into the office anymore. Similarly, on a global scale, the transportation industry has been greatly affected. Business travel is a huge source of revenue for airlines, contributing to over seventy-five percent of airline profits. With business travel entering a decline due to more employees working from home, the airline industry is feeling the impacts. Both locally and globally, the loss of in-person activity has significant costs.
Economists at Goldman Sachs have found that office attendance in major U.S. cities is merely one-third of pre-pandemic levels. All those employees who are currently working from home are not spending money on a cup of coffee or an airline ticket, which they would do prior. The loss of global economic activity is incredibly concerning as working from home has become a part of post-pandemic life that seems to be here to stay. How will these industries adapt? Will they recover? If not, can new industries be created to offset the economic impacts of working from home? Perhaps a zoom into the future will give context to what post-pandemic life will look like.
Edited by Kathryn Fargione and Maggie Reddington