Have you ditched the big city for a smaller town or embraced the work-from-home (WFH) lifestyle without weighing the downsides? From fewer job opportunities to reduced networking, the allure of a quieter life may have come with a hefty price tag, especially if you’ve recently faced a layoff. In this blog, we’ll delve into the reasons behind this.
The National Bureau of Economic Research recently released a working paper by economists Enrico Moretti and Moises Yi that explores the disadvantages of being outside a large labor market, especially if you become, for example, one of the thousands laid off in 2024 in government, technology, energy, or manufacturing. The paper entitled, Size Matters: Matching Externalities and the Advantages of Large Labor Markets, explores why working in your jammies a traffic jam away from where the action is may not be in your best interests in the future. While remote work offers flexibility and convenience, there are distinct advantages to rejoining the vibrant energy of a metropolitan workplace. Let’s delve into some compelling reasons why Moretti and Yi suggest that returning to a big city office could be a game-changer for workers.
Advantages:Â Jobs, Productivity, and Networking
1. Variety of Job Opportunities
One of the most significant advantages of returning to a big city office is its abundance of job opportunities. Unlike remote work, where job options may be limited to specific industries or roles, many big cities boast diverse economies with opportunities across various sectors. Moretti and Yi term these “large and thick” labor markets. In these, non-specialized skills in office administration, for example, might mean that finding a job with any number of employers in broader fields like marketing or finance can be more accessible. For instance, Amy took an entry-level job in data entry for a law office, and in two years, she was the bookkeeping manager for an entire law firm.
Other metro areas seem to specialize in the number of large “clusters” or heterogeneous jobs available. For example, California’s Bay Area is the largest cluster for artificial intelligence (AI) jobs. You will also find AI jobs in cities like Boston and Washington-Baltimore. From finance (Dallas, TX, and CT) and technology (IL, CA, or NY) to healthcare (MA, CA, TX, FL), metropolitan hubs in these states provide a plethora of careers to explore in your area.
Applying in person to “large and thick” or “cluster labor markets” opens the widest doors to new possibilities and allows colleagues to pursue their passions together in thriving industries. This sense of adventure and exploration can be incredibly inspiring if you’ve been an isolated remote worker, igniting a new sense of excitement and motivation for your career. And let’s not forget the social aspect, particularly the broader selection of restaurants cities offers for lunches out with colleagues!
2. Enhanced Productivity and Innovation
If the thought of a long commute brings on PTSD, reframe the time as a positive way to improve your knowledge. From podcasts to language or skills building, you can use commuting time to enhance your education and productivity. Speak or write a grocery list, catch up on work and personal emails, or use a popular meditation app to calm your mind. In return, you’ll gain the synergy of a big city office, which fosters productivity and innovation in ways that remote work cannot replicate.
Within a metropolitan workplace’s vibrant environment, employees can collaborate, brainstorm ideas, and draw inspiration from their peers. Face-to-face interactions with colleagues spark creativity, facilitate problem-solving, and create a sense of camaraderie and belonging, something many WFH people miss.
3. Economies of Scale and Network Effects
Metropolitan-sized offices benefit from economies of scale and network effects, contributing to their overall success and competitiveness. For companies operating in metropolitan areas, this means streamlining operations and lowering costs by having access to a concentration of talent, resources, and infrastructure all in one place.
For the employee, if you have valuable skills and a great work ethic, your visibility is higher, so your chances for high-paying, longer-term employment are considerably better than in a remote job market. In fact, a Stanford Graduate School of Business study found that though 13% more productive, WFH had only half the promotion rate of in-office employees.
Additionally, if you are laid off, the network effects of being part of a vibrant business community amplify the value of connections and collaborations. For example, Moretti and Yi concluded that “after their firm closes, displaced workers in larger markets experience a shorter non-employment spell, smaller earning losses, and a lower probability of relocation than workers in smaller markets” (p. 28). They likened the larger market size to an “insurance policy” for employers needing specialized labor and workers with specialized skills.
From access to top-tier employers and recruiters to opportunities for strategic networking and alliances, urban-centered jobs offer unparalleled advantages to talented workers.
Embracing the Best of Both Worlds
While the perks of returning to a big city office are pretty enticing, let’s not overlook the upside of remote work. The flexibility and autonomy it offers can significantly enhance work-life balance and cut down on commute-related stress. Therefore, rather than viewing remote work and office work as mutually exclusive, you can often negotiate a hybrid model that blends the strengths of both productivity and in-office synergy.
In conclusion, returning to a city office environment offers remote workers many advantages, including access to diverse job opportunities, enhanced productivity and innovation, networking, and fulfilling the human need for connection. By rejoining the vibrant energy of the metropolitan workplace, professionals can reignite their passion, accelerate their career growth, and thrive in a dynamic and collaborative environment.
Source: Size Matters: Matching Externalities and the Advantages of Large Labor Markets (nber.org)
