Elon Musk has significantly lowered his forecast for savings from the Department of Government Efficiency, downgrading his initial $2 trillion prediction to just $150 billion for the year. This reduction underscores the challenges posed by the federal government's recent ban on telework, which impacts nearly 60% of federal employees. Economists suggest that the ban will result in decreased productivity, contradicting the department's aim for efficiency improvements. Studies show that sectors with a higher percentage of remote work during the pandemic saw better productivity growth without increased employee compensation, raising concerns over the government's productivity outlook.
During the pandemic, productivity growth increased in industries with more remote workers, with no rises in employee compensation, suggesting a cost-effective advantage of telework.
Elon Musk revised his savings forecast from the Department of Government Efficiency from $2 trillion to $150 billion, highlighting significant overestimations in expected savings.
The federal government's ban on telework contradicts efficiency goals, as economists note greater productivity growth where remote work is prevalent.
With a significant portion of federal employees previously working from home, the abrupt shift away from this practice is anticipated to be counterproductive.
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