U.S. workers are becoming less productive, and this may have more to do with the surge in working from home than with AI, according to Stanford University economists.
Over the past five years, non-agricultural business output has grown at a significant 2% per year. economist The report cited statistics from the Bureau of Labor Statistics. This is a significant increase compared to the 1% annual productivity growth that characterized much of the 2010s, a trend that surprised even Federal Reserve Chairman Jerome Powell.
“I never thought we’d have this really high productivity for so many years,” Powell said at a press conference in March.
But while the hype around AI over the past few years has made it a logical candidate for the main driver behind the productivity boom, Nicholas Bloom, an economics professor at Stanford University known for explaining the mass resignations of the early 2020s, says it’s more likely work-from-home policies, with the pandemic accelerating this trend.
In trials, researchers found that working from home led to increased productivity by saving on commuting time and general wasted time at the office. In a LinkedIn post earlier this week, Bloom wrote that working from home supports business creation and increases labor supply by allowing more people to join the workforce.
by email to luckBloom also noted that the data “shows a clear spike in productivity growth since 2020, precisely when working from home.” [work from home] It was exciting. ”
Still, large companies are moving away from work-from-home and flexible work policies. Home Depot, Instagram and automaker Stellantis have forced employees to return to the office five days a week since the beginning of the year. They join Amazon, the new No. 1 company on the Fortune 500, which began a five-day in-office requirement last year. More than half of employees at Fortune 100 companies are required to work entirely in the office, according to a report from real estate firm Jones Lang LaSalle (JLL).
Companies argue that working face-to-face fosters collaboration, and Bloom agrees. But bringing people back into the office five days a week is counterintuitive, he said, and has more to do with either layoff preparation or the CEO’s personal preference, which Bloom said typically skews toward older male leaders.
In fact, he says a hybrid approach of two days in the office and three days remotely may be the best option for productivity. As Bloom says, employees spend most of their time in the office doing administrative tasks like managing email and participating in Zoom calls. Three days of remote work allows employees to do much of this work from home. This gives most employees two days in the office to fully focus on in-person collaboration, coaching, and company culture.
“Coming into the office definitely helps with collaboration, coaching and culture, but you don’t have to be in the office every day to achieve that,” he said.
But once companies decide on a work schedule, they should stick to it, he said. For example, when three days in-person turn into five, “there’s a lot of anger, confusion, confusion.”
Although the use of AI has exploded since the release of ChatGPT in 2022, the productivity gains over the past five years are likely not entirely due to AI.
AI has probably only started impacting the workplace in the past year. Gallup reported for the first time in April that half of all employees say they use AI several times a year in their jobs, up from 46% in the previous quarter. Only 13% of employees say they use it every day.
Still, Fed Chairman Jerome Powell added in a press conference in March that AI “certainly will help” improve productivity in the future. The evidence may be on his side. A study last year by the St. Louis Fed found that the time generative AI models save employees can lead to a total productivity increase of 1.1%.
