The rise of remote work could make the Federal Reserve’s task of taming inflation a bit easier, while saving employers more than $200 billion, according to new research.
That’s because workers are willing to accept smaller pay increases for the convenience of working from home. In turn, that helps moderate business costs and slow what economists call the wage-price spiral — when companies pass higher expenses on to consumers in the form of higher prices.
About 4 in 10 firms said they’ve expanded opportunities to work remotely to lessen pressure on their labor budget over the past year, and a similar number expect to do so over the next 12 months, according to a working paper from the University of Chicago. The authors found it would reduce wage growth by 2 percentage points over two years.
