Finance
Many workers would take a pay cut to work from home
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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.
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.
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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.
Walmart stock may be a steal.
Former Walmart U.S. CEO Bill Simon contends the retailer’s stock sell-off tied to a slowing profit growth forecast and tariff fears is creating a major opportunity for investors.
“I absolutely thought their guidance was pretty strong given the fact that… nobody knows what’s going to happen with tariffs,” he told CNBC’s “Fast Money” on Thursday, the day Walmart reported fiscal fourth-quarter results.
But even if U.S. tariffs against Canada and Mexico move forward, Simon predicts “nothing” should happen to Walmart.
“Ultimately, the consumer decides whether there’s a tariff or not,” said Simon. “There’s a tariff on avocados from Mexico. Do you have guacamole with your chips or do you have salsa and queso where there is no tariff?”
Plus, Simon, who’s now on the Darden Restaurants board and is the chairman at Hanesbrands, sees Walmart as a nimble retailer.
“The big guys, Walmart, Costco, Target, Amazon… have the supply and the sourcing capability to mitigate tariffs by redirecting the product – bringing it in from different places [and] developing their own private labels,” said Simon. “Those guys will figure out tariffs.”
Walmart shares just saw their worst weekly performance since May 2022 — tumbling almost 9%. The stock price fell more than 6% on its earnings day alone. It was the stock’s worst daily performance since November 2023.
Simon thinks the sell-off is bizarre.
“I thought if you hit your numbers and did well and beat your earnings, things would usually go well for you in the market. But little do we know. You got to have some magic dust,” he said. “I don’t know how you could have done much better for the quarter.”
It’s a departure from his stance last May on “Fast Money” when he warned affluent consumers were creating a “bubble” at Walmart. It came with Walmart shares hitting record highs. He noted historical trends pointed to an eventual shift back to service from convenience and price.
But now Simon thinks the economic and geopolitical backdrop is so unprecedented, higher-income consumers may shop at Walmart permanently.
“If you liked that story yesterday before the earnings release, you should love it today because it’s… cheaper,” said Simon.
Walmart stock is now down 10% from its all-time high hit on Feb. 14. However, it’s still up about 64% over the past 52 weeks.
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Investors may want to reduce their exposure to the world’s largest emerging market.
Perth Tolle, who’s the founder of Life + Liberty Indexes, warns China’s capitalism model is unsustainable.
“I think the thinking used to be that their capitalism would lead to democracy,” she told CNBC’s “ETF Edge” this week. “Economic freedom is a necessary, but not sufficient precondition for personal freedom.”
She runs the Freedom 100 Emerging Markets ETF — which is up more than 43% since its first day of trading on May 23, 2019. So far this year, Tolle’s ETF is up 9%, while the iShares China Large-Cap ETF, which tracks the country’s biggest stocks, is up 19%.
The fund has never invested in China, according to Tolle.
Tolle spent part of her childhood in Beijing. When she started at Fidelity Investments as a private wealth advisor in 2004, Tolle noted all of her clients wanted exposure to China’s market.
“I didn’t want to personally be investing in China at that point, but everyone else did,” she said. “Then, I had clients from Russia who said, ‘I don’t want to invest in Russia because it’s like funding terrorism.’ And, look how prescient that is today. So, my own experience and those of some of my clients led me to this idea in the end.”
She prefers emerging economies that prioritize freedom.
“Without that, the economy is going to be constrained,” she added.
ETF investor Tom Lydon, who is the former VettaFi head, also sees China as a risky investment.
“If you look at emerging markets… by not being in China from a performance standpoint, it’s provided less volatility and better performance,” Lydon said.
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