The death of offices and the rise of remote work could mean someone with your title makes 20x more than you
The era of remote work will set you free. At least that’s how the promise goes.
But what if it creates a new class of high-earning remote workers, worsening wealth inequality along the way? What if it just feeds into a harmful dynamic called the “superstar effect,” which has plagued the American economy since the 1990s?
Be careful what you wish for when it comes to remote work, in other words.
That’s what Dror Poleg, an economic historian, thinks. Poleg has written extensively on the topic of how technology impacts the way we work and live. In a trending thread on Twitter, he laid out why he thinks that we might see a dramatic shift in the way people are paid as we move to remote work.
You may already know about the superstar effect: Think of Michael Jordan, arguably the greatest basketball player of all time, or GOAT, in modern parlance. Poleg theorizes that remote work could make someone in your office the Michael Jordan of your field, and remote work could free that person up to cash in and make a lot more money than you.
In his Twitter thread, Poleg points out that creative industries are marked by structural inequities that are less apparent in white-collar professions. For example, the stark differences in pay in the entertainment industry are obvious if you look at the average salary of the many performers trying to make it compared with the few A-list stars like George Clooney or Jennifer Aniston, who bring in millions per project.
Office-based companies only hire from a small local talent pool. In a small pool, employees face less competition & are less likely to encounter "outlier" competitors who are 50x better than them. (if NBA teams only hired locally, worse players would get to join the league) 2/7
— Dror Poleg (@drorpoleg) February 23, 2022
Poleg offers a few reasons why our shift to remote work could lead to a group of elite white-collar employees. For one, companies are no longer forced to hire talent near a central office, which means they can choose from a wider pool of talent. “In a small[er] pool, employees face less competition and are less likely to encounter ‘outlier’ competitors who are 50 times better than them,” Poleg tweeted.
And with so many white-collar employees working from home, office culture becomes less important. Poleg argues that in the past, office workers (and their managers) were of the mindset that time spent at the office is arguably more important than the quality of the work. When a job is done remotely, it’s almost impossible to give credit simply for showing up. As a result, managers with a remote workforce are more likely to put an emphasis on the quality of the employee’s output. In this environment, productivity rather than presence is important, and low performers have more of a chance of falling behind, Poleg says.
Distracting meetings and long commutes end up punishing the highest performers when they work in an office, he continues. Working from home allows them to be more productive when they can hone their skills and focus on their individual contributions. Meetings are often set up in part to create a sense of community or team-bonding, but they are also derided for being time sucks. These office time-wasters will fall by the wayside, giving individuals even more time to focus on their work.
Of course, not everyone who works from home finds it conducive to productivity. Many working parents find themselves trying to juggle their jobs and kids. Lower-income workers might struggle to find a quiet place to do their jobs. And nearly every remote employee has had a day when their internet connection failed right when they needed to hop on to an important Zoom. But employees who are the most productive will find the greatest success in this new work culture, according to Poleg.
In the remote-first working world, standout performers will be celebrated (and paid) like superstar athletes, since teamwork will be valued less than individual success.
Poleg warns in his Twitter thread that a world devoid of office culture could lead to even more pronounced economic inequality. Employees who share the same space are typically offered similar perks and work-related benefits. With everyone working from home, Poleg argues, it will be easier for executives to justify compensating employees at drastically different levels.
“When everyone is in the same place, it’s hard to pay one programmer 20 times more than the person sitting next to them,” Poleg tweeted.
Office "culture" limits the spectrum of salaries and perks. When everyone is in the same place, it's hard to pay one programmer 20 times more than the person sitting next to them, or less one person do a day's work in one hour and then take a nap. 4/7
— Dror Poleg (@drorpoleg) February 23, 2022
Though more companies are starting to pressure employees to return to the office at least part-time, it’s unlikely that we’ll ever see a full return-to-office culture. “Once companies discover the benefits of hiring from a larger pool, there’s no going back. To remain competitive, most companies will have to adopt some level of remote and flexible work,” Poleg tweeted.
Once companies discover the benefits of hiring from a larger pool, there's no going back. To remain competitive, most companies will have to adopt some level of remote and flexible work. 5/7https://t.co/lIV2FQijDs
— Dror Poleg (@drorpoleg) February 23, 2022
But while employees think having the freedom and flexibility to work remotely gives them all the power, it might backfire if it ultimately means the end of the middle class.
This story was originally featured on Fortune.com
