Over the course of the last year or two, I have written on multiple occasions, both here and in our sister publications, about the pandemic-era Work-From-Home (WFH) phenomenon. I was always convinced it would not stick, as it was driven by a pendulum swing in employment leverage to the employee side, who could practically dictate the terms of their employment to their bosses. And during this time, many opined the commercial office space industry would go the way of dirigibles and buggy whips, with office buildings repurposed to other uses and never to be seen again.

I wrote then, and feel more strongly now, that the Return-To-Office (RTO) movement would slowly penetrate the culture of the American workplace, and that WFH would fall back to its pre-pandemic levels where only those few who did not need the team-building and collaboration environment (think entry-level accounting clerks) would enjoy WFH.

This swing back to traditional office attendance and interactions started long ago, in some cases as far back as two years or more. Wall Street led the charge, requiring five-day-a-week attendance at the office or, in the words of Jamie Dimon, “go find another job.” Along the way, other industries followed suit, and today, office-centric work is the rule, not the exception.

As I have written before, I am in the 53rd year of my career, and along the way, I have witnessed culture-changing tectonic shifts with the invention of the personal computer, the advent of cellular telephony and the roll-out of the internet. In each case, arguments were made that thanks to these advances, these tools of efficiency would destroy jobs and leave us with an ever-higher level of unemployment.

It Didn’t Happen

Jobs burgeoned under each of these strides toward greater efficiency in the workplace, and AI will do the same. As college grads booed last month at commencement speakers who mentioned AI, it is apparent that, like the generations before them, they have the benefit of joining the workplace economy at a time when AI will soon start creating more jobs as the nascent technology matures.

And now an important new study by the New York Fed has issued, supporting my claims. The report clearly explains the prevalence of remote work may be largely to blame for the uptick in unemployment among recent college graduates, not AI.

The report says WFH arrangements, which surged fourfold since the outbreak of the pandemic, can explain an estimated 64% of the recent increase in joblessness among young grads, with some employers finding it more difficult to train new workers from afar. That trend bucks the prevailing assumption that AI is displacing entry-level workers, and it is especially concerning since a tough labor market early in a worker’s career can scar their earning potential and career progression.

As of March, the unemployment rate for recent college graduates was 5.6%, compared to 4.3% for all workers. The report found that unemployment rates in recent years have increased particularly fast among young workers in occupations that can easily be performed remotely, like software engineering. Unemployment among older workers in the same roles, on the other hand, has declined marginally.

‘Unremotable’

For jobs that are considered “unremotable,” meanwhile, unemployment increased briefly in 2020 as COVID tore through the economy, but returned to baseline soon afterward as workers returned to the office.

Digging into proprietary data from an unnamed Fortune 500 company, the researchers also found that people who had worked next to their colleagues received more feedback and more mentorship. In a remote work environment, those employees also performed better than those who worked primarily away from their co-workers during their careers.

Perhaps understanding the pitfalls of distance for worker development, the company hired fewer less-experienced workers when its offices were closed during the pandemic and consistently opted for more experienced workers when hiring for positions on distributed teams, even after reopening.

Today’s young workforce needs to hear this message. They will only prosper by integrating into the office environment at their jobs and take advantage of the growth that only hands-on mentorship and collaboration offer.