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During the COVID-19 pandemic, much of the workforce became accustomed to working from home. Gone were the days of standstill traffic during rush hour commute. Sweatpants during Zoom calls were here to stay. However, recent trends have indicated that the switch to working from home wasn’t the permanent cultural shift some believed it to be. Most recently, JPMorgan issued a return-to-office mandate for all 317,000 employees, generating backlash from employees. The deadline for Amazon employees to return to their desks hit on January 2, after CEO Andy Jassy announced the mandate in September 2024. It’s not just corporations calling back their troops; John Whitmire, the Mayor of Houston, has mandated that city employees return to the office by February 1, 2025. Return to office mandates are a hot-button issue. Forbes describes that those in favor of in-person work argue that it would increase efficiency, collaboration, and community. However, work-from-home proponents argue that remote work gives them more flexibility and a healthier work-life balance. There’s no clear cut winner between remote and in-person work: only trade offs. However, the increasing RTO (return to office) mandates have effects that spread beyond the company itself and into the greater economy.
For many who had worked from home for years, one of the first questions that would arise after the dreaded RTO email is, “What in the world am I going to wear?” Sure enough, over the 2024 holiday season, NBC News reports that Visa’s card network saw a 5% increase in clothes and accessory purchases. Mastercard saw a similar trend, at 3.6%. Industry experts partially attribute this increase to RTO mandates.
In Seattle, 50,000 Amazon employees returning to their desks on January 2 has caused quite the ripple in the local economy. Coffee shops, restaurants, and food trucks in the South Lake Union area reported noticeable increases in sales during the workweek. One restaurant owner even describes it as a “sense of excitement and renewed energy.” For small businesses that suffered during the Covid-19 pandemic, this is a welcome change of pace.
Return-to-office mandates have also caused a stir in the real-estate market. Business Insider describes that, during the pandemic, given the flexibility of remote work, many Americans chose to move to states like Texas and Florida, leaving the Northeast and West Coast behind for warmer weather and lower costs of living. Now, these employees are being called back to the office. As they return to the cities they had left, they enter an already competitive housing market. Business Insider reports that the areas in which homes sell for the most above their asking prices are in the Northeast, specifically ones where residents can commute to major economic hubs. In San Jose, located near Silicon Valley, RTO policies exacerbate an existing housing shortage. RTO mandates force some workers who have to move to San Jose to choose between selling their current homes and entering an immensely competitive housing market or losing their jobs.
The increase in RTO mandates have economic impacts in almost every sector. However, what does this mean for the finances of the individual worker? Fortune reports that employees returning to the office spend $561 per month on additional expenses. This equates to the monthly grocery bill for a two person household in the U.S. These costs come from transportation, child care, pet care, and domestic assistance.
The effect of increasing RTO mandates on the U.S. economy is not clearcut. Although it imposes additional costs on individual employees, it also has a ripple effect on other areas of the economy: clothing, food and beverage, transportation, real estate, and more. Once again, it can be seen that the debate between remote and in-person work is not a simple one. As more employees dig heels out of their closets, pre order their Sweetgreen for lunch, and set out on their daily commute, the effects of RTO mandates on the efficiency and culture of organizations as well as impact on the wider economy will certainly be valuable to observe.
