If Remote Work Is Our New Reality, Is Boston Still Worth The Trouble?

This week, we entered phase three of Gov. Charlie Baker’s four-stage plan to reopen Massachusetts.

But I’ve been mostly thinking about phase five: “Is Boston still an attractive place to live?”

With so many white-collar employees now able to work from home (or anywhere), the governor, and Boston Mayor Marty Walsh need to start thinking of Massachusetts, and Boston in particular, as a product they need to sell, not only a location they need to govern.

I grew up in the Boston area, went to school here and founded a company now headquartered on State Street. Now, I live just 11 miles outside the city. I should be a supporter of the Hub of the Universe, but these last few months made me realize that the business case for keeping a company in the Boston area is not as strong as it once was.

The realities of these past few months have dramatically increased the ability of companies to support their employees in working remotely. And that’s the problem.

For my company, a global provider of technology research and advisory services, the move to remote work was a non-event. We already had a robust cloud-based technology environment and our employees can work from anywhere in the world.

OK, but Boston is a “world class” city, isn’t it? That’s worth something. Today? I don’t believe it is

The technology to support working from home is relatively easy to deploy and in the past few months most organizations have largely worked out the kinks. With the support for remote work in place, business leaders quickly realized they have greater flexibility — and with employees working from home, companies may not need the same amount of office space they’ve had in the past.

So that begs the question: Where is home for an employee? Does it need to be near the office anymore?

You can thank the complex taxing environment in the U.S. for driving advances in automated payroll processing. For some time, payroll services have made it easy to add employees in other states (and pay the appropriate taxes). Even a small company, with just a few clicks, can manage the taxing issues of an employee located in any state.

So, if employees can be anywhere, why Boston (or New York City, or San Francisco, etc.)?

When I graduated in the 1980s, I stayed in the Boston area. I wanted to maintain the friends and connections I’d developed in school. There was an ecosystem here. Recent graduates stayed at the companies they’d worked for, the companies grew around those graduates, and on and on.

That’s no longer the case.

Research from the Brookings Institution shows that Boston now retains just over half of its college graduates, barely edging out Baltimore and Pittsburgh but trailing Detroit, Houston, Chicago, San Jose and Atlanta by large margins.

Every “world class” city needs a reality check -- and to prove they are offering businesses and residences a positive ROI on the product they are delivering.

Increasingly, where an employer is headquartered doesn't matter as much. Post pandemic, more people won’t even go to a job. We’re already seeing it happen with major tech employers like Twitter, which recently announced their team can work anywhere, forever. Google and Facebook are already telling their employees it will be 2021 before they go back to the office (Facebook expects half of its employees to work remotely, forever, too).

OK, but Boston is a “world-class” city, isn’t it? That’s worth something.

Today? I don’t believe it is. Before the pandemic, Boston faced a “transportation crisis beyond repair” — the country’s worst traffic coupled with a crumbling public transportation system. Throughout the 11-year economic boom Boston experienced, little was done to improve or maintain its infrastructure. The cost of living is astronomically high (and the weather is also, largely, terrible).

Inertia means cities rise and fall in slow motion. It took years of bad decisions to drive Detroit, for example, into decline and job loss, before its more recent signs of revival fueled by private investment. Boston won’t die overnight either, but the negative return on investment (ROI) trend line is hard to miss. Every “world-class” city needs a reality check — and to prove they are offering businesses and residences a positive ROI on the product they are delivering.

Boston is filled with knowledge workers. And many of them, in just the last couple of months, have discovered that they can work from anywhere in the world — and their employers will let them. Bad roads, high taxes, terrible traffic, unreliable subways and overpriced housing are terrible product attributes. When all work requires is a reliable internet connection, every city is in direct competition with the sunny beaches of Miami, the high tech vibe of Austin, the southern warmth of Charleston or the great feel of Jackson Hole.

We may be shut in today, but with the rise in remote work the entire world just opened up. Each employee will eventually ask themselves if they can work remotely from anywhere in the world, would do they still live where they do?

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