Finance

Many workers would take a pay cut to work from home

Published

3 months ago

February 7, 2025

Coroimage | Moment | Getty Images

Many workers value remote work to such a degree that they’d take a pay cut to be able to work from home, even on a part-time basis, studies show.

The prevalence of remote work ballooned during the Covid-19 pandemic. Many experienced telework perhaps for the first time in their careers; employees cite work-life balance as by far the biggest perceived benefit, according to Pew Research Center.

Some researchers have quantified the financial value workers assign to telework.

For example, about 40% of workers say they’d accept a pay cut of at least 5% to keep their remote job, according to a recent study by researchers at Harvard University, Johns Hopkins University and the University of Illinois at Urbana-Champaign.

About 9% would trade at least 20% of their salaries to preserve telework, said researchers, who polled more than 2,000 workers.

We're in the 7th round of the return to office prize fight, says Korn Ferry's Alan Guarino

Put another way, workers see the ability to work from home — even two or three days a week — as equivalent to getting a raise, according to Nick Bloom, an economics professor at Stanford University who studies workplace management practices.

Data that Bloom has collected in recent years suggests the average worker equates remote work to about an 8% raise, he said.

“That figure seems remarkably stable” over time, Bloom said in an e-mail.

“For some subsets of workers you can find higher numbers,” relative to the pay cut they would accept, Bloom said.

For example, a National Bureau of Economic Research working paper published in January that looked at workers predominantly in the technology field found they’d accept an average 25% pay cut for a job that offers fully or partially remote work.

“The reality is: It is a very attractive feature of a job,” said Zoe Cullen, an assistant professor of business administration at Harvard Business School, who co-authored the NBER research.

The paper examined data on almost 1,400 workers from the U.S. tech sector. The average person was 32 years old, and had about seven years of work experience. Researchers gathered data on the job offers individuals receive and the jobs they ultimately choose, with the average gig offering $239,000 a year in total compensation.

Of course, not all Americans prefer out-of-office work.

About 41% of workers with the ability to telework — but who rarely do — say in-office work helps them feel more connected to co-workers, and 30% think in-person work helps with mentoring opportunities, according to Pew Research Center.

Working from home has also waned from its pandemic-era peak.

Big companies like Amazon, AT&T, Boeing, Dell Technologies, JPMorgan Chase, UPS and The Washington Post have initiated return-to-office mandates for at least some employees.

President Donald Trump also issued an order Jan. 20 to terminate remote work for federal employees and require full-time in-office attendance, with some exceptions.

That said, on a national scale, employers don’t seem to be retrenching en masse, according to labor economists.

The number of paid days worked from home during the workweek has held steady for the past two years, at between 25% and 30% — more than triple the pre-Covid rate, according to WFH Research.

Employees aren’t the only ones who get a benefit: Remote work is also a profitable arrangement for businesses, according to labor economists.

For example, employers may save money on real estate by downsizing office space. They may also hire job candidates from across the country, potentially at a lower relative salary, depending on geography.

Workers with the ability to work from home also tend to quit less frequently, thereby reducing company spending on expensive functions like hiring, recruitment and training, Bloom said.

Finance

More Americans buy groceries with buy now, pay later loans

Published

3 hours ago

April 26, 2025

Business Finance News

People shop for produce at a Walmart in Rosemead, California, on April 11, 2025.

Frederic J. Brown | Afp | Getty Images

A growing number of Americans are using buy now, pay later loans to buy groceries, and more people are paying those bills late, according to new Lending Tree data released Friday.

The figures are the latest indicator that some consumers are cracking under the pressure of an uncertain economy and are having trouble affording essentials such as groceries as they contend with persistent inflation, high interest rates and concerns around tariffs.

In a survey conducted April 2-3 of 2,000 U.S. consumers ages 18 to 79, around half reported having used buy now, pay later services. Of those consumers, 25% of respondents said they were using BNPL loans to buy groceries, up from 14% in 2024 and 21% in 2023, the firm said.

Meanwhile, 41% of respondents said they made a late payment on a BNPL loan in the past year, up from 34% in the year prior, the survey found.

Lending Tree’s chief consumer finance analyst, Matt Schulz, said that of those respondents who said they paid a BNPL bill late, most said it was by no more than a week or so.

“A lot of people are struggling and looking for ways to extend their budget,” Schulz said. “Inflation is still a problem. Interest rates are still really high. There’s a lot of uncertainty around tariffs and other economic issues, and it’s all going to add up to a lot of people looking for ways to extend their budget however they can.”

“For an awful lot of people, that’s going to mean leaning on buy now, pay later loans, for better or for worse,” he said.

He stopped short of calling the results a recession indicator but said conditions are expected to decline further before they get better.

“I do think it’s going to get worse, at least in the short term,” said Schulz. “I don’t know that there’s a whole lot of reason to expect these numbers to get better in the near term.”

The loans, which allow consumers to split up purchases into several smaller payments, are a popular alternative to credit cards because they often don’t charge interest. But consumers can see high fees if they pay late, and they can run into problems if they stack up multiple loans. In Lending Tree’s survey, 60% of BNPL users said they’ve had multiple loans at once, with nearly a fourth saying they have held three or more at once.

“It’s just really important for people to be cautious when they use these things, because even though they can be a really good interest-free tool to help you kind of make it from one paycheck to the next, there’s also a lot of risk in mismanaging it,” said Schulz. “So people should tread lightly.”

Lending Tree’s findings come after Billboard revealed that about 60% of general admission Coachella attendees funded their concert tickets with buy now, pay later loans, sparking a debate on the state of the economy and how consumers are using debt to keep up their lifestyles. A recent announcement from DoorDash that it would begin accepting BNPL financing from Klarna for food deliveries led to widespread mockery and jokes that Americans were struggling so much that they were now being forced to finance cheeseburgers and burritos.

Over the last few years, consumers have held up relatively well, even in the face of persistent inflation and high interest rates, because the job market was strong and wage growth had kept up with inflation — at least for some workers.

Earlier this year, however, large companies including Walmart and Delta Airlines began warning that the dynamic had begun to shift and they were seeing cracks in demand, which was leading to worse-than-expected sales forecasts.