How Remote Work Helps Prevent Inflation

Rita Nakhoul
February 1, 2023

It has become increasingly common for employers to adopt remote working models - thanks to the pandemic - for their employees. This not only seems practical or meets the flexibility needs of the modern workforce, but it also has significant economic benefits, especially when it comes to fighting inflationary pressures.

Inflation is a common economic phenomenon that occurs when the prices of goods and services increase steadily over time. When the cost of living goes up, people will have to spend more money to maintain the same standard of living. Ultimately, this can lead to a decrease in consumer purchasing power and make it harder for businesses to maintain profit margins.

Many factors can contribute to inflation, including rising commodity costs, rising wages, and expansionary monetary policies.

Remote Work Advantages

There is no doubt that remote work has a variety of advantages for both employees and businesses. The most obvious advantage is that it prevents high inflation or, at the very least, helps lower the inflation rate. But how?

First, workers are less likely to demand raises or other benefits when they can work from any place. Also, full-time remote workers are less likely to be pressured to pick employment that is not a good fit for them. This can result in a more productive staff that is more equipped to address challenges, fulfill deadlines, and enhance retention.

Second, adopting remote or hybrid work models can help reduce inflation by reducing business costs since employers don't need to rent office space for their employees, which can lower real estate costs. In addition, employees can often use their own computer and internet equipment, which reduces costs for companies.

Furthermore, without mandatory office work, employees will decrease travel costs. They won’t have to travel to the office every day, which can reduce fuel and public transit costs. It can also lead to minimizing traffic congestion and air pollution costs.
Employees can also choose to live in less expensive areas, which can take the edge off housing and transportation costs.

Remote Work Eases Wage Growth and Inflation

According to Greg Iacurci, the CNBC Personal Finance Reporter, “38% of employers had expanded opportunities to work from home or another remote location in the 12 months through May in order to reduce what they termed “wage-growth pressures”; 41% expect to do so in the next year.”

That reduction can actually take place in several ways, including employees accepting a smaller pay raise from their current employer in exchange for working from home a few days a week or accepting a new job at a lower pay but with a greater opportunity to work remotely.

Likewise, this model can also help lower labor costs by allowing employers to recruit employees from regions with lower wages. This allows employers to hire qualified employees and avoid higher wages, which can reduce overall costs for businesses. It can also lead to increased competition for talent if remote work opportunities are open to everyone.

Finally, it is important to note that remote work can also help improve the quality of life of employees. Employees who work remotely may have more time to spend with family and friends, engage in leisure activities, and care for themselves. It can help them be happier and more fulfilled, which in turn can help them be more productive and help fight inflation.

Passion for remote work

Explore the Future of Work with Stakha

Remote jobs are here to stay, and as businesses adapt to new full-time or part-time remote work models, research into their effectiveness will no doubt continue.

At Stakha, we found from experience that the remote working model offers many advantages for employers and employees, such as flexibility, cost savings, productivity, better recruitment, and improved quality of life.

Remote work can help prevent inflation by reducing business costs, increasing employee productivity, and improving employee quality of life. It is, therefore, important to consider this option when trying to fight against inflation.