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Culture War Roundup for the week of September 16, 2024

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Corroborating evidence from Canada:

Canada's labour market is much slacker than the United States. Coming out of the pandemic, immigration to the U.S. increased (especially illegal immigration best as we can tell), but in Canada there was an enormous surge in immigration to keep wages low and slow inflation. We brought in 3 million people in 3 years and our unemployment rate is now 6.6% compared with 4.2% in the U.S. In some parts of the country about 25% of the 20-29 age cohort is Indian temporary workers now, which is a story for another time. Think Springfield Ohio, but literally everywhere.

The upshot is the effective end of remote work and the squeezing of hybrid except, possibly, in the federal civil service. I'm back 4 days a week now as are all the people in my wider circle. Traffic is back to pre-pandemic levels.

Management has always hated remote work. Part of it is a skill issue around learning how to manage people remotely, but a key factor is this: remote work increases the variance of individual contributions. Some people are unaffected. Some people do more: they spend the time they would have spent commuting working and with fewer distractions their output goes up. Some people need the proximity of management to get them to do anything and spend their days at home cooking, cleaning, wasting time, etc.

Firms struggle to identify who that latter group is and even where they can see them, they can't bring themselves to fire these employees or disproportionately reward the people whose productivity increases. They can't accept the status quo for morale reasons. So instead everyone comes back.

Its such a shame because Canada, more than any other major western country, has had economic growth concentrated in its major cities over the past 20 years. You can see this in our real estate prices and for a young Canadian, the deal on offer is terrible: no jobs outside the big cities, no homes within them. Remote work offered a way through, but now its over.

they can't bring themselves to fire these employees or disproportionately reward the people whose productivity increases.

Why is this so true? I would be happy to do this, but it seems it’s anathema to most companies. Any explanations?

I think there is widespread 'firing aversion' because:

  • Managers hate firing people, its very unpleasant and can be traumatic. Many people will do what they can not to do this.
  • It can adversely impact morale and culture to have lots of firings. People will hunker down, it can create a culture of fear, etc. (of course cultural impacts can be bad if poor workers aren't fired too, but few consider this).
  • Law suits and severance suck.