Press "Enter" to skip to content

Trading Raises for Remote Work May Ease Inflation

Remote work may tamp down inflation, says a new study that finds workers trading raises for the pleasure of working at home:

In a new study, economists Jose Maria Barrero, Nicholas Bloom, Steven J. Davis, Brent H. Meyer, and Emil Mihaylov surveyed more than 500 American companies, asking them how they are using remote work. They find that many companies are capitalizing on remote work by using it as a substitute for giving workers raises, so much so that it’s helping to moderate inflation.

…They estimate that using remote work opportunities as a substitute for cash raises has lowered wage-growth pressures by almost a full percentage point over the last year. They predict it will continue to lower wage-growth pressures by another percentage point over the next year. “This moderation shrinks the real-wage catchup effect on near-term inflation pressures highlighted [by] Blanchard by more than half,” they write.

The economists add that remote work is likely lowering business costs and overall inflation in other ways. Offering remote work, for example, could be a way for companies to prevent people from quitting, lowering turnover costs. Similarly, remote work can be used to recruit highly qualified applicants on the cheap. Let’s not forget lower costs for office space, supplies, and energy (costs that companies are shifting to workers).

“We conclude that the recent rise of remote work materially lessens wage-growth pressures,” Barrero, Bloom, Davis, Meyer, and Mihaylov write. “In doing so, the rise of remote work eases the challenge confronting monetary policy makers in their efforts to bring the inflation rate down to acceptable levels without stalling economic growth” [Greg Rosalsky, “Lean Out: Employees Are Accepting Lower Pay in Order to Work Remotely,” NPR: Planet Money, 2022.07.12].

Leave the car parked in the garage, make lunch in my own kitchen and eat it on my own patio, keep my faithful dog company all day, replace dress pants and shoes less often—those perks are worth real money. It’s not every day we can lower wages but still improve quality of life and the economy.


  1. Mark Anderson 2022-07-12 17:54

    It’s a reverse A Thousand Clowns.

  2. Arlo Blundt 2022-07-12 21:23

    I don’t doubt what the economists have to say. I always figured it cost me about 10 to 15% of my salary in work related expense. My children work about 80% of their job time at home. They like it and are earning at least twice what I was at a similar stage in their career. It’s a new world.

  3. Bob Newland 2022-07-12 22:02

    I earn most of my money driving non-productive miles to assure corporate gods that their serfs are worshipping them properly.

    My self-loathing is assuaged only by the fact that I am more deserving than the schmuck who’d do it if I didn’t.

  4. grudznick 2022-07-12 23:00

    You do have a lot of time to consider deep thoughts on your road trips, Bob. Like you told folks at breakfast the other week, it evens out when you get the euphoric high of sealing that transaction and walking out of the convenience store with a Cheshire cat grin knowing they had no idea you were a corporate narc. And then throwing the hot dog in the gutter, reveling in the inner litter-bug you let loose at those moments.

  5. All Mammal 2022-07-13 06:29

    I concluded years ago the more hours I’m at work and the more miles away from home the job site is- the more money I spend and the broker I am. Every time I step out my door, the meter starts and I’m instantly spending money. You would think, gosh I worked 111 hours last week, making nice pay in ND, sun’s up until 11 pm, workin and a workin. How can I be broke?!
    A few years prior, I’m pushing booze to the beautiful people on the Northside out of Prairie Bottle, which is less than a block from my door, I can actually decide what food I get to eat AND have a little pocket money. Some uncanny formula dictates it.

  6. grudznick 2022-07-13 08:35

    Oh yes, those were the good old days when the Prairie Bottle Market was thriving. Very little produce and there were groceries scattered on the floor but you could get a nice selection of booze. Plus the cops let you drink it in the park back then.

  7. All Mammal 2022-07-13 11:42

    I agree. Those days were great, Mr. G. I had all my customers convinced I had tracking devices in the bags and bottles so I could tell who littered by the creek. Worked like a charm. Might have even found me down there with my lovely friends from time to time, passing the Carlo Rossi jug. Finest under the bridge sangria pocket change can buy… She who runs the liquor department wields great power. I ran a tight ship and truly loved my regulars. But as soon as I bought my VW Bug, I was gone… To tend bar and run the Time Out/Time Inn. I was practically the mayor then. Nowadays, both places look like hell. Alchemy cannot be taken lightly.

  8. John Dale 2022-07-14 19:55

    The economics for jobs that can be performed remotely are profound, but mostly are realized in terms of value to the worker (put a price on not having to commute).

  9. grudznick 2022-07-14 20:28

    Mr. Dale fails to take into account the other side of the equation. Remember that all the gas stations, fry bread stands, and fast food joints that suffer an equal reduction in value, and then the effect of the workers of these fine establishments not having as much money to buy baby formula and their own lattes in the morning. Grudznomics formulates the societal loss from remote work at 7.2 times the savings to the slackards lounging about at home. Economists call this Dribble Down Business Bleed, and it is a real thing. Even teachers lounging about during the summer often take another job just for the fun of it, so they’re still out there buying gasoline and lattes.

  10. grudznick 2022-07-14 20:36

    Ms. Mammal, grudznick knew an old fellow who like to refresh himself at the Time Out, and I must admit I’ve visited it a few times with him. Why that was his establishment of choice I do not know, but I enjoyed myself at the time.

  11. larry kurtz 2022-07-14 21:26

    Thoughts and prayers for the pathetic slobs who find themselves working at a ramen factory in Belle Fourche, for sure.

Leave a Reply

Your email address will not be published.