Evolving Markets Drove the Remote Work Revolution

Back in 2020, I noted, “The dramatic rise in telework amid the pandemic is a radical experiment, but its effects will be long-lasting.” I was right. Rates of full-time, in-office work plummeted during the pandemic, and while many employers have since shifted from fully remote work to hybrid work schedules, hybrid work levels have remained stable since 2022. In 2025, 78% of full-time remote-capable U.S. employees are either hybrid or fully remote, with hybrid as the most common arrangement.

What is sustaining this transformation of the workplace? The inconvenient answer for those who see government action as the source of progress is that this transformation is thanks to freely chosen, mutually beneficial decisions by employers and employees rather than any top-down mandate.

The proof is in how durable these patterns have been. Millions of workers and employers continue to choose them because they work. Roughly half of the U.S. workforce consists of employees who are capable of working remote or hybrid jobs. The most common arrangement sees workers commute two days a week and work remotely the other three. Most workers appreciate the flexibility, with a mere 6% of remote-capable workers saying they prefer to work on-site full-time.

An analysis from the Bureau of Labor Statistics found that across industries, the rise in remote work and total factor productivity growth may be positively correlated, and many employees report higher productivity at home. Some research also suggests that hybrid and fully remote work may have positive effects on individual employee productivity, satisfaction, and physical health, as well as employee retention.

Historically, most improvements for workers have followed a similar pattern—wherein the market dictates employer-employee relationships, not government—despite a popular narrative to the contrary. The economist Benjamin Powell observed that legal labor standards, working-hour limits, and the introduction of a minimum wage in the United States and other wealthy countries after industrialization largely mirrored policies that employers had already implemented of their own accord. Legislation merely codified preexisting norms instead of prompting a change in industry practices.

Economist Price Fishback similarly noted, for example, “State laws limiting the number of working hours for women … passed after many employers had substantially reduced hours for women. Recent studies have found that the laws had relatively little effect.”

A century ago, the Ford Motor Company pioneered limiting the workweek to five days. Ford’s example soon inspired manufacturers across the country and around the world to adopt the Monday-to-Friday workweek. That occurred because employers discovered that productivity increased, while employees valued the extra leisure time. As the economist Ludwig von Mises put it, “The nineteenth century’s labor legislation by and large achieved nothing more than to provide ratification for changes which the interplay of market factors had brought about previously.”

Today, remote and hybrid work often benefits both employers and employees, and this work flexibility rise occurred in spite of many outdated government rules that hinder such arrangements. These rules are in desperate need of reform. For example, various federal tax rules discriminate against remote work arrangements, while differing state rules can subject remote workers to double taxation, and occupational licensing rules limit workers’ options to move between states. If anything, the government has stood in the way of the great workplace transformation toward remote and hybrid work.

Calls to legally mandate remote or hybrid work are a misguided attempt to give the government credit for a shift that has already happened independently of government action. Premier Jacinta Allan of Victoria, Australia, announced that her state government will enshrine a legal right for employees, in both the private and public sectors, who can perform their job from home to do so at least two days a week. The law comes into effect in September.

The legal change will benefit few employees, as 65% of Victorians are already hybrid or remote, but it will create more bureaucratic headaches by adding unnecessary red tape for employers and employees alike. “WFH [work from home] is already happening, and there is no reason to legislate a one-size-fits-all approach,” cautioned Andrew McKellar, the chief executive of the Australian Chamber of Commerce and Industry.

This represents perhaps the first example of a legal entitlement to work from home, coming long after the market has already made such arrangements widespread. “If you can do your job from home, we’ll make it your right—because we’re on your side,” said Allan. In reality, it is employers and employees exercising their freedom in the market, not political mandates, that have made the flexibility of remote and hybrid work widely available today.