WFH - Work-from-home could ease pressure on inflation according to new research

The shift to remote work, triggered by the COVID-19 pandemic, could help make the Federal Reserve's job easier in relieving inflationary pressures, if a working paper from the University of Chicago proves to save employers as much as the researchers predict. Previous research explained that when wage gains lag inflation,  workers seek larger raises to make up for that shortfall, a phenomenon likely to fuel a wage-price spiral. But in a recent paper, the five authors  — Jose Maria Barrero, Nicholas Bloom, Steven J. Davis, Brent Meyer, and Emil Mihaylov — say U.S. workers are willing to trade off some wage gains for the convenience of working at home, offsetting some of the inflationary pressures on employers. Through surveys, they found that employers the shift to more remote work is moderating employers' wage-setting behavior. The data imply a cumulative wage-growth moderation of 2.0 percentage points over two years, they said. However,

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Work-from-home could ease pressure on inflation, according to new research