As US business leaders struggle this fall to lure workers back to offices, they’ve stumbled upon an unexpected roadblock: inflation.
The cost of transportation, food and childcare has outpaced salaries, with some workers saying it’s not only more convenient, but also cheaper to work from home.
When the Covid-19 crisis led to a widespread shift to remote working in early 2020, many companies provided stipends to employees who complained about the cost of setting up a home office and higher electricity bills.
But now some workers say remote is the most economical option as consumer prices in the US continue to rise. “Every time I leave my house, I lose money,” said Lina Tumanyan, a real estate agent based in Manhattan.
Even with a job that takes time to show off properties outside the office, Tumanyan said she was expected to come in a few times a week for tasks like email and posting lists. “It’s really frustrating that in a lot of places people really need to be in the office right now because we’ve all seen that pretty much everyone can function from home and everything is fine,” she said.
US consumer prices rose 8.3 percent in the 12 months leading up to August, while the out-of-home food index rose 8 percent. The price for gasoline used by commuters who drive remains 17 percent higher than a year ago at about $3.70 a gallon, according to AAA, even after a recent decline.
Major employers, from Apple to NBCUniversal to Goldman Sachs, have pushed staff back to the office, with varying degrees of success. Office occupancy rates in 10 major US cities last week reached its highest level since the start of the pandemic, according to data from security firm Kastle Systems. The daily number of passengers on the subway reached 3.9 million passengers in New York City last week, also the most since March 2020.
Still, Kastle data released Monday showed that the average office occupancy rate was still just 47.3 percent, a slight drop from last week. The New York City subway has less than two-thirds of the traffic on a typical day before the pandemic, and Monday travel is remarkably weak. About 60 percent of employees surveyed by job site ZipRecruiter say they prefer to work remotely.
“Employees still express a fairly serious reluctance to return to the office and a strong preference for remote work,” said Julia Pollak, ZipRecruiter’s chief economist. “The motivations for wanting to work remotely have changed over time. So while health issues were initially the biggest concern, now commuting costs are the biggest concern.”
U.S. full-time workers report that they spend, on average, twice as much in a month when they work in the office, or about $863, compared to $432 when they work from home, according to a study by Owl Labs, a videoconferencing equipment maker that benefits from hybrid working. .
Office workers said their biggest daily expenses averaged $15.11 for commuting, $14.25 for lunch and $8.46 for breakfast and coffee. Those with pets also reported spending an additional $16.39 on services such as dog walkers.
That’s why Megan Zuckerman limits her trips to the office to once a quarter. Zuckerman, a 28-year-old public relations executive, left Manhattan to move in with her parents in New Jersey in June 2020. At the time, her employer still planned to operate remotely for an ‘indefinite period of time’.
Her bosses later announced a two-day-a-week office schedule. In the meantime, apartment rents in New York had soared that Zuckerman couldn’t afford to move back. According to appraiser Miller Samuel and brokerage Douglas Elliman, the median monthly rent for new leases in Manhattan hit record highs for six straight months, before dropping to $4,100 in August.
Zuckerman estimated that her commute from New Jersey — which requires both a ferry and bus and takes nearly two hours — cost $45. She eventually found a new job where she could work mostly from home.
“I’m really glad I was able to get some flexibility because two days a week in the office would have been very expensive,” Zuckerman said.
Some employers have expanded benefits in an effort to offset rising costs. Healthy snack maker That’s It, which mandated a return to the office last year, gave each employee three separate $100 gasoline gift cards when prices hit $5 a gallon.
California-based biopharmaceutical company Urovant expanded its approved use for a $500 health and wellness benefit for employees, from fitness expenses to transportation costs, lunch and childcare.
“We provide that to our employees to recognize them, but also to provide additional incentives and compensation, as we understand that the cost of living continues to rise,” said Betzy Estrada, Urovant’s Chief Human Resources Officer.
Managers aren’t the only ones desperate for servants to return to offices. Municipal leaders such as New York City Mayor Eric Adams have urged businesses to bring them back to support local economies. Industries that rely on regular visits from office workers, such as cafes, dry cleaners, nail salons and parking garages, still have 347,000 fewer people across the country than before the pandemic, according to an analysis by ZipRecruiter.
Those are the kinds of expenses that put off workers like Tumanyan, the real estate agent. Between her subway fare, coffee, a lunch salad, and things she might be tempted to buy in Manhattan, she said she can spend $75 on days she goes to the office.
“Unless you want to pay for our lunches and transportation, no, I won’t come to the office every day,” she said.