As the Federal Reserve aggressively raises borrowing costs to break through stubbornly high inflation, telecommuting may function as an unlikely ally for U.S. financial institutions. The Fed raised its benchmark rate of interest 0.75 percentage points last week after raising it by the identical unit at its June meeting.
By doing so, officials try to cool the economy and prevent rapid growth in consumer prices. consistent with a recent working paper co-authored by a group of five economists, the Covid-era work-from-home trend may help cover inflation. and published by the National Bureau of Economic Research.
Increase in Interests
As more workers enjoy commute-free workdays, less stress, and a far better work-life balance, their employers also enjoy telecommuting by paying lower wages than they can afford, preventing higher wages, to yield the so-called inflationary wage rate. spiral, the researchers said.
Specifically, the researchers found that 38% of employers expanded options to figure from home or another remote location in the 12 months to May to reduce what they called “salary growth pressure”; 41% hope to do so in the next year.
- Federal Reserve Bank decided to increase the interest percentage.
- Covid pandemic situation and working from home was the reason for it.
- Salary growth in this remote work was also said as a reason.
Employers can use telecommuting to curb wage growth not only among existing employees but also in hiring, Davis said. for instance, a San Francisco-based company might attempt to hire a full-time remote worker in Boise, Idaho, to pay a lower salary supported geographic location, Davis said.
Of course, not everyone can work from home part-time or full-time. While 65% of those with a bachelor’s degree can commute from home, only 53% of those with a college degree or less do so, consistent with the Pew Research Center. Pew found that there is also an income divide — 67% of high-income workers can commute, compared to 53% of low-income workers.