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US wages for jobs that require full-time office work are rising.

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“The conclusion is that people demand higher pay increases for fully in-office jobs,” according to Pollak. “An employer offering flexibility can negotiate the overall compensation package with non-monetary incentives, while an employer wanting teams on-site five days a week can only offer financial terms; a dollar value is placed on time spent in the office.”

Remote employment has been less common in the UK and throughout Europe; in October 2023, for instance, a poll of 15,000 businesses and employees in the UK revealed that 43% of workers had gone back to working exclusively in offices. According to Pollak, this indicates that the trend for an in-person premium is anticipated to be less than in the US.

According to ZipRecruiter data, employees in the US who switched from entirely remote to totally in-office setups until 2023 had a 29.2% wage increase.

It makes sense for all parties to benefit from flexibility rather than a wage increase in the current cost-cutting environment. Nevertheless, according to Pollak, some employers are prepared to raise wages in order to compensate for filled offices because they feel the trade-off is worthwhile. The investment will pay off with better business results.

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“Among some employers, there can be a perception that remote workers are less productive,” she continues. A lot of them also have a strong “financial and psychological investment in their corporate real estate”; they will stop at nothing to occupy their offices.

According to Barbara Petrongolo, a professor of economics at the University of Oxford, there is an unexpected consequence to this salary disparity: it may exacerbate existing labor market inequalities.

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