How remote work will create economic winners and losers

When the pandemic hit and tens of millions of US workers suddenly redeployed to their basements and living rooms, it was easy to imagine that their workdays would unfold roughly as before, with communication tools like Slack and Zoom substituting for face-to-face interactions (and maybe with slightly greater multitasking opportunities).

But the shift to a heavily remote workforce — companies like Facebook and Twitter have announced that they will allow many employees to work from home permanently — has the potential to change people’s work lives in much more profound ways. It could significantly affect their wages, alter career prospects and restructure organizations. And as with many economic shocks, workers are likely to be affected unevenly.

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The changes that remote work is accelerating “are a disaster for low-skilled labor and could be a good thing for high-skilled labor,” said Gerald Davis, a professor of management and sociology at the University of Michigan’s Ross School of Business who has written extensively about shifting work arrangements. “I anticipate it having this centrifugal effect.”

Many workers could see an increase in disposable income and flexibility, but others could be pushed into contracting arrangements that lower their wages and make their livelihoods more precarious. Even highly skilled workers may find it harder to band together to improve their pay and working conditions.

So-called fully distributed companies, where everyone works remotely, often pay employees somewhat less than they might earn in the most expensive metropolitan areas but more than they would make elsewhere.

DuckDuckGo, an internet privacy company with a well-regarded search engine, formally bases its compensation on salaries at a group of technology companies across the United States, excluding the San Francisco Bay Area. Automattic, maker of the website-building tool WordPress, pays employees based on job responsibilities and qualifications regardless of location. (By contrast, tech companies with physical headquarters often pay workers less if they live in a less expensive area.)

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This benefits skilled workers living outside the most expensive markets, and especially where jobs with generous pay are scarce. Jason Caldwell, a marketing manager at WordPress, makes safely into the six figures working from Billings, Montana. He is hoping to buy a 100-plus-acre plot where members of his family can build homes.

And while wages for high-skilled workers in the Bay Area could increase less quickly as a more remote world reduces local competition for talent, even they could come out ahead in the end. Reduced hiring of affluent workers in the Bay Area would also mean fewer bidders for real estate, slowing the rise in housing prices, said Adam Ozimek, chief economist of Upwork, an online freelancing marketplace.

The deeper change is organizational. At a typical company, small chunks of information relevant to one’s work tend to be scattered throughout the organization — with the woman on the other side of your desk pod, the guy three cubicles over, the manager at the end of the hall. This forces workers into a series of person-to-person interactions throughout the day, making it necessary for them to keep similar hours even when that’s not convenient.

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By contrast, distributed organizations like DuckDuckGo and Automattic seek to “separate individuals from the information they possess” and create a centralized “knowledge repository,” Stanford business scholar Jen Rhymer has written. This makes it possible for employees to complete their assignments from anywhere, at almost any time of day, without having to check in frequently with colleagues.

At Automattic, which spreads its roughly 1,200 full-time workers across more than 75 countries, managers like Caldwell often spend about four hours a day reading and writing memos on one of the company’s internal blogs, known as P2s.

They document any development that might be relevant to their co-workers — everything from “Google Chrome just announced a change; here’s what I understand about it,” Caldwell said, to a description of an effort to highlight the company’s one-on-one training sessions for users.

At DuckDuckGo, which has about 100 full-time workers across 17 countries, all relevant developments are recorded in a software program called Asana. In any given week, employees focus on their “top priority” contribution to a company project.

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Gabriel Weinberg, DuckDuckGo’s founder and chief executive, said the company tried to keep the projects small and self-contained, with their goals and scope clearly detailed in a written template, allowing people to work independently without constant coordination.

“This system works best when it continues to be modular; there are not tons and tons of people on a project,” Weinberg said. “It’s easy to jump in as a new member. You read a one-page document and understand what’s going on with it quickly.”

DuckDuckGo, like other distributed companies, also creates specific opportunities for bonding. There is a weekly “neighbors meeting” in which four or five colleagues who don’t normally work together are randomly assigned to mingle, and an annual companywide gathering that is normally in person but was held online this year.