Bryan Caplan's theory is that this is because people WFH now.
(speaking from experience as someone who undercuts themselves a lot)
Very true. Most of us also aren’t paid for the value we produce. We get paid for the replacement cost.
So let's talk about how it can be a valid argument, instead.
Employees expense computer equipment, cell phone bills, gas, car rentals, hotels, and more. I don't view this differently.
I'm working from my bedroom, we're already short on bedroom space; I'll gladly work from home for a fraction of what my employer pays to accommodate me in an office. But I probably wouldn't have taken this job knowing I'd be stuck in my bedroom 18 hours a day.
Most firms will pay less for remote workers. It is a little odd given they save a decent amount of money, but most people save a lot of time by not having to commute and they like the flexibility so the rates for remote workers are lower.
Then there are things like (increased) electricity costs, having to upgrade your home internet to sufficiently satisfy your work requirements (eg if you need to be downloading or uploading large files, or your company had stringent remote call quality requirements), etc.
If you're someone whose commute was little or no expense, then these can be a notable new expenditures to budget around. They won't break the bank but they're worth thinking about.
"Snacks" can include whole meals and quality food which is both a monetary and time benefit. It won't move the needle, but it's another thing on the list.
I suspect companies will shake this out and factor it into compensation and reimbursement plans where relevant over the next few months, but it's fair to see it as a notable new set of expenses for some people.
In addition, our utility bills have risen about 50% as now we're at home for 8 hours more per day. Extra heat (and soon A/C), water, electricity, etc.
Also, my "play" room is now my work room. How much extra should I be paid for my work environment to be permanently visible at all times? It's starting to affect my psyche. Luckily I had a play room to begin with, so my bedroom didn't have to become my work room too. I would have even more trouble sleeping in that case.
As someone who has worked from home for years, more people and companies need to pay attention to this. It's very, very easy to stay glued to the computer all day, not get any movement, and get cabin fever, especially if you don't live with family.
It took me years of discipline before I could build the habits to make long-term work from home feasible. So many others I know - including in my family - struggle to separate work and personal lives when working from home.
I predict all these companies are going to find that their workers productivity and morale are crashing in six months.
Fixing remote worker loneliness and cabin fever is going to be one of the biggest - and most important - problems in the next few years.
2. Get some sunlight everyday. Even if its for 5 minutes.
3. Physically separate the work area from everything else. This might not be possible for everyone, but I have my office at the far end of the house. I use it only for work, nothing else. I even have a separate room with another computer for all personal work/games. Walking from the living area to the office creates a sort of "commute" which mentally switches you on/off for work.
I put an old IKEA table (nearly two decades old) on top of a regular table and that's pretty much the ideal height for me.
I use a MacBook Pro for work, and an Asus Predator laptop for personal stuff. They sit on the IKEA coffee table, which sits on a regular kitchen-style table. The height is perfect for my hands; the forearms are nearly horizontal when typing. The laptop screen is a bit low; if I had an extra screen, I would put that on top of a box on the IKEA table, but it's okay as it is.
Everything I need for work stays on the IKEA table all the time. I just swap laptops once a day.
There's a wall right behind me, which I can use as a back rest. Sometimes I put a knee and lower leg on the lower table, to give that leg some rest - it just happened to be the perfect height for that.
I can walk back and forth through the room when I'm in deep thought.
I have to say - I was surprised how comfortable the setup is. I am not tired at all from a physical standpoint at the end of the day. I actually prefer it now to the regular sitting posture.
When I'm done, I just move the IKEA table to its regular place. From a psychological standpoint, this is a nice benefit - it marks in an obvious way the moment when the work day is over.
As someone who lives within walking distance of my office and rarely buys new clothing, I'm in the negative just without free coffee alone, let alone other amenities and increased costs at home.
Lots of people in sfbay and nyc structure their living situations around not spending lots of time at home. That has been upended.
My company is allowing people to become permanently remote, if they want. However, after covid, if you go full or mostly remote, it will be a hard requirement to have a dedicated room for an office. That is probably incompatible with living in most of the bay area.
Is this something they can actually verify?
Thus, I have an ancient laptop and the couch or the kitchen table to use in a pinch, but that's gonna cause injuries if used long-term. I've been adapting, as we all have, since going WFH, but I've had to buy things in order to make it comparable to my office, where I have dual 24" screens, and a setup that's comfortable to be at for extended periods.
But, if I wasn’t using my personal laptop as a Plex Server, I probably wouldn’t have a personal computer set up at home. My wife and I use our iPads for all of our limited personal computing needs. If I break down and get an a NVidia Sheild, I might completely shut down my personal computer.
I'm not sure you're entitled to more money because you need a chair and a desk. Maybe could make an argument your internet connection should be paid for though.
The latter group was planning on working in an office and, perhaps, provisioned housing with that in mind. They may not have a guest room or space that can easily be used as an office. They may be sitting at a dining room table in an inflexible chair, bending their arms and wrist in uncomfortable ways and punishing their backs. They may have a laptop with a display that they planned to use only in meetings but now they are staring at it all day.
It's easy to make the case that people who made working from home a goal during their last search for employment don't need additional income during the quarantine; likely they made decisions about how they would pay for their homee office space and other expenses when they were looking for work and accepted a position.
I do think that employers should be footing some dollars to people working from home for the first time, for any real length of time, during quarantine. At the least they could provide equipment (docking stations, larger displays, keyboards, mice, proper chairs, etc.) to their employees. Whatever these employees are saving in terms of gas and commute time they are losing far more in the space from their home (no more dining room, etc.) and, if the quarantine continues for several months, the risk of RSI and back problems.
Note: this isn't actually my situation, but I'd be surprised if it was uncommon given that many programmers work in large cities.
Why does this expense change categories to "eh, whatever" when it's coming out of my pocket instead of the business's?
Many contractors claim tax deductions based on their rent or mortgage due to the fact that a percentage their home is used for business.
Again, not an accountant, not your accountant, etc.
Some were laid off "furloughed", and the rest had a 15% cut. I believe the story from the company which is mostly cold numbers of ensuring they have cash to handle the next couple of months of reduced sales.
If we were in the office, we wouldn't be any more upset or putting pressure on management. What I would normally do if I felt slighted is look for another job, but it's also a rough time for that.
A longer term trend of lower work-from-home wages might be a real thing, but I think it's way to early to separate that from direct financial reaction to an unprecedented economic downturn and uncertainty.
The reason wages are being cut is because revenue has dropped through the floor, and companies have to make their books balance. This is not an incredible mystery.
The comparison to the 2008 financial crisis is not relevant; that was a financial crisis that affected availability of capital. The coronavirus is an operational crisis, so of course operations (which includes salaries) are more heavily affected.
To suggest WFH is leading to wage cuts seems misleading, when it's a side effect of an pandemic and people forced to work from home.
The theory presented is that WFH reduced the downsides of cutting wages (by reducing the room for griping about it amongst co-workers), and that companies are following those incentives.
I am not convinced, but your dismissal doesn't seem to address the actual article.