Tuesday, May 23, 2023

Working from home and the paucity of GDP

Paul Krugman's column today talks about the economics of increased working from home. The primary benefit? People don't have to waste a huge portion of their lives commuting. And while this is difficult to quantify, the impact is huge:

it’s not hard to make the case that the overall benefits from not commuting every day are equivalent to a gain in national income of at least one and maybe several percentage points. That’s a lot: There are very few policy proposals likely to produce gains on that scale. And yes, these are real benefits. C.E.O.s may rant about lazy or (per Musk) “immoral” workers who don’t want to go back into their cubicles, but the purpose of an economy is not to make bosses happy.
I guess one of the reasons those bosses are unhappy is that the benefits of this change go directly to workers, not to them. Throw in their loss of control - particularly insulting for the control freaks who tend to accumulate in management positions - and you can see why they're angry (and why workers are happy to be out from under their angry, bullying, micromanaging thumbs).

None of this benefit shows up on GDP, of course. People getting their time back and being able to actually enjoy their lives isn't something economic statistics measure. Which makes the government obsession with them even stupider. As Krugman points out, the purpose of an economy is to serve human needs, not generate favourable statistics. Governments need to think about that more often, rather than blindly pursuing misleading metrics.