Upper-middle-class professionals cannot believe their luck. They have, once again, emerged as the great winners from a crisis: ensconced in spare rooms, they are coping so well with the Zoom economy that they want to make it the new normal.
Working from home (or WFH in corporatese) is easier than they previously realised, allowing greater flexibility while saving time and money once wasted on commutes and overpriced sandwiches. No wonder that most bankers, lawyers, consultants, accountants, marketers, tech workers and other office staff don’t want to go back to the five-day commute, and many employers plan to save a fortune by obliging them.
Natwest boss Alison Rose is the most recent business leader to describe a “hybrid” future: smaller offices to bring people together, train newcomers and buttress corporate culture, combined with extensive home working. The likes of Facebook plan to be even more radical, allowing many workers to live wherever they like but adjusting salaries downwards for living costs.
The digitisation of the economy is being drastically accelerated by Covid, paving the way for the emergence of the first $2 trillion tech companies.
But this semi-utopian lifestyle revolution, the greatest upheaval in working practices since word processors became ubiquitous in the 80s, is for a minority.
Lockdown has been experienced very differently by blue-collar workers in factories and construction, by shop staff, delivery drivers, gym instructors, doctors, nurses and millions of others. Not for them the delights of what the Centre for Economics and Business Research (CEBR) calls the Loungewear Economy.
For the majority under Covid, it’s been a case of working throughout, being furloughed or losing their jobs in the most devastating economic calamity in a generation. The great class divide is now between those who can work remotely – up to 40 per cent of the total according to LEK Consulting – and those who cannot. Or so the self-satisfied, upper-middle-class office workers have convinced themselves.
They shouldn’t rejoice too soon. When pushed to its logical conclusion, the working-from-home phenomenon has the potential to annihilate the middle class’ vice-like grip on the best jobs. Their bid to commute less will cost the jobs of hundreds of thousands of support staff, sandwich shop assistants, security guards and public transport workers. But they, it turns out, will have the last laugh.
Covid shows that proximity needn’t matter as much. That is great for wealthy commuters in the short term, allowing them to relocate from £1.5 million shoeboxes in Battersea to mansions in Bromsgrove. But if workers can be anywhere, why limit oneself to the UK?
If London-based employers can hire people who live in Newcastle, Manchester or Sheffield, why not Australia, Bangalore or Poland?
If workers no longer need to sit cheek-by-jowl in central office locations all of the time, legal and immigration barriers to recruiting foreign workers fall away. It becomes easier to employ Romanian-based IT staff rather than UK-based developers, even when the costs of occasional Ryanair flights and Travelodge stays to the office are accounted for.
This will spectacularly derail the middle-class gravy train. Until now, upper-middle-class professionals had remained shielded from one aspect of globalisation – production and jobs transferred to cheaper, lower-pay locations – while enjoying another – earning more by selling globally. This explains why City wages have shot up, while those of unskilled people have fallen. Working from home means that the great protective barrier cossetting office workers has been ripped away.
Competition for jobs goes worldwide
Suddenly, every office worker is competing with every other office worker in the world – at least those who speak adequate English. The outsourcing of support staff was an early sign of things to come. The CEBR calculates that the post-virus equilibrium will mean 25-30 per cent of the workforce working from home on any one day, compared with 11.9 per cent in 2019. But where, and in which country, will “home” be? Millions more jobs have become exportable.
In the short term, lower-paid workers will lose: Shore Capital estimates that up to a quarter of the time office workers were based in urban centres will now be spent in suburbs, meaning more home cooking and a 20-30 per cent decline in restaurants. But having a job that must be based in Britain will become an advantage. This is good for surgeons and plumbers, but not for bankers, HR personnel or architects.
There are many other ways in which the middle classes will be disrupted. Working from home requires stricter supervision to make sure people deliver; this will weed out not just the bluffers, presenteeists and con artists, but also non-jobs in “woke corporations”.
Disruption and redistribution
There will be a redistribution of power from extroverts to introverts, from those with good verbal skills to those with better writing abilities. Empathy will be valued more highly as face-to-face communication diminishes.
The new order will be bad for the upper-middle-class Left-illiberal consensus, too. The globalisation of the jobs market will destroy the idea that trade inevitably focuses on neighbouring regions – the anti-Brexit “gravity model” will be disproved.
The working-from-home revolution will also sprinkle Champagne socialists into Tory areas, making urban refugees less Left-wing (by tackling the economic cause of their discontent, including house prices) and exposing them to other ideas and values. It will level up towns, villages and rural areas, bolster home-ownership and car transport, and bankrupt public transport.
Countries will need to work harder to remain attractive. World-class internet will be crucial, as will larger homes. Hiking taxes will become intolerable – in a world of unprecedented economic mobility, jobs will simply vanish if states seek to fleece taxpayers – and there will be an extra premium on good schools. The Government will need to reform universities to ditch useless courses.
The upper middle classes are blissfully unaware that they are sitting on the same ticking timebomb that detonated under blue-collar Britain 50 years ago.
They’d better enjoy their work-life balance while it lasts.
– Telegraph Media Group