Stanford Economist Attributes US Productivity Boom to Remote Work, Not AI

A Stanford economist, Nicholas Bloom, argues that the recent surge in American productivity is primarily driven by the widespread adoption of working from home (WFH) rather than artificial intelligence. National data indicates a 2% annual increase in non-farm business output since 2020, doubling the rate seen in the 2010s. Bloom attributes this growth to time saved on commuting and reduced office distractions, which also expands labor supply. Despite these findings, many major corporations, including Amazon and Home Depot, are enforcing full-time return-to-office policies, often citing collaboration benefits. Bloom contends that a hybrid model, with two days in the office for collaboration and three days remote for focused work, is optimal. He suggests that strict five-day office mandates may reflect CEO preferences or layoff preparations rather than productivity needs. While AI usage is rising, its impact on productivity is considered recent and less significant than the structural changes brought by remote work arrangements established during the pandemic.