How Many Remote Workers Only Pretend to Work?

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Commentary

Elon Musk keeps making headlines for saying true things that no one else seems willing to say.

Last week, he wrote a memo to all Tesla employees ordering them all back to the office, 40 hour per week, period. And it must be the real office, not some WeWork-like outpost of office expats sipping lattes and “networking.” When the memo was leaked, he confirmed its authenticity and further tweeted that those who are unwilling to make the slog to their desks “should pretend to work somewhere else.”

The key word here is “pretend.” That so many in the U.S. workforce merely pretend is something of a taboo topic but everyone knows it is true.

Tellingly, at the same time, he announced his intention to cut 10 percent of workers from Tesla completely. This is based mostly on his intuition that very bad times are coming for the economy in general. The brutality of inflation combined with recession combined with a severe labor shortage (in some sectors but not all), could be devastating for any enterprise, but especially a large one with a puffed-up professional-class, and mostly overpaid workforce.

Later he clarified: he is focussed on “overstaffing in many areas” but overall the labor hours employed by the company will rise. The signal to the workforce is hard to miss. If you are among the millions of six-figure, back office, entitled functionaries who can skip days and weeks or even months of work with no effect on workflow, or if you are among those who can game the system by pretending to be at your desk at home when you are in fact at the beach thumb typing, it’s time to start worrying.

At the same time, Amazon has also announced job cuts but signaled something similar. If you actually do stuff to help the company’s profitability, you are safe. If you are among that huge layer of people who winnowed their way into a comfortable spot by virtue of required credentials and mostly what you do is classified as “administrative,” and your main talent is spewing corporate gobbledygook at staff meetings, you could be toast.

The Cleansing Fire

These are signs that a cleansing fire could be coming for many businesses in America. The pandemic lockdowns exposed a feature of American life that everyone knew was there but very few executives felt the need to address because times used to be so good: namely, a huge percentage of American workers are only pretending to work. Once they were all sent home, for a year or even two, that truth became unbearably obvious.

What percentage of the staff is pretending to work rather than actually work? This is the great mystery because no one knows for sure. Is it only 10 percent or is it 40 percent? How much in resources is being drained by a sprawling c-suite and its endless staff that could otherwise be put into doing what companies are supposed to be doing, namely delivering value for the consumers?

Small Business Efficiency

With food rising at very high rates, I’ve been doing my own price checks around town. The highest rates of increase are of course in fancy stores with beautiful displays and high-end music playing for customers who aren’t there just to buy stuff but also for purposes of personal identity and class demarcation. The more reasonable rates of increase are in the just-business place that worry less about delighting you and more about getting you what you need at good value.

The best prices I found were at independent, small, low-staff stores that cater to particular populations with interests in regional foods that fall outside the mainstream. They are owned by first-generation immigrants and serve populations that they know particularly well. I found prices at these stores are running up to 20 percent less than the big-box stores. This is somewhat surprising since we’ve generally assumed that the big players can take better advantage of economies of scale and offer lower prices.

I spent some time with the owner to find out how he is dealing with inflation. He said it is annoying, particularly transportation costs but that he mostly tries to find ways to keep prices as low as possible rather than passing them on. He has only a tiny back office, no HR department, no fancy and highly credentialed professional layer, and employs mostly people from his extended family who are there as much for reasons of loyalty than pure salary gains.

That also meant that during the pandemic, he didn’t have to deal with vast numbers of employees who deployed the excuse that they can’t come into the office for fear of the virus or the unvaccinated. Indeed, following just a week or two of forced closures, this place has mostly functioned as if the pandemic didn’t exist at all. That helped them build supply networks and a customer base while the competition was hopping around and spinning in germophobic fits of mania for two years.

As a result, he is better able to deal with wholesale price increases than the larger companies that must expend vast resources on compliance, benefits, professional salaries, and administration generally. He doesn’t have to deal with threats of labor lawsuits, internal squabbles based on wokish kvetching, endless red-tape imposed by massive benefits packages, or shell out the big bucks for a gaggle of lobbyists in D.C.

This revelation sparked a speculation in my own mind. Maybe small business does have a brighter future in tough economic times than I had previously imagined. Maybe such boutique stores are much better positioned to withstand grim economic realities than the big players, simply because their labor overhead is so much lower. If that is true, we could see a renaissance in this sector in the coming years.

Back to Actual Work

Elon appears to be among the executives in this country who realize that something has to be done to save large companies from the problems of their own creation. The layer of corporate privilege is far too thick and cumbersome to thrive in the midst of a serious economic test of its value.

Somehow over the decades, many in the American professional class gained the impression that they could get by forever with a guaranteed high income simply by flinging around high-end degrees or even sporting identity credentials but not actually achieving anything. They have been mostly correct so far.

The coming days could put this whole model to the test. As a first effort to achieve efficiency gains, Elon’s idea is to insist that everyone come into the office. It seems like a reasonable point. Yes, the commute can be annoying and expensive but shouldn’t something minimal be asked of laptop employees who draw such high salaries for doing unnecessary tasks which can be faked in minutes a day by thumb typing from the back-porch jacuzzi?