We’d anticipated a difficult adjustment to life with Covid-19 for New York City and potentially other large American cities. A new Wall Street Journal story confirms our take and if anything, may be more grim. Restrictions of office workers returning to their posts end tomorrow, but the Journal’s sources estimate only 10% to 20% will return.
And for the most part, this isn’t a short term “Get the bugs out of getting them back” phase, with many more expected to return soon. This low level looks likely to the new normal for at least the next few months, with increases from these levels expected to be measured.
Before looking at the impact on New York City and other dense urban centers in the US, the fact that work from home has worked at all calls into question many heretofore unquestioned norms of office like, like the true utility of having workers on premises. How much of formal and informal information-sharing is actually productive, as opposed to gossip and political jockeying? For instance, the pre-Carly-Fiorina Hewlett Packard was cognizant of the potential for meetings to be time-wasters, and required that they be held with all participants standing up.
Conversely, even though in-peron collaboration is usually more efficient (think of programmers sitting next to each other looking at the same screen), how much will actually be possible with new distancing rules?
Rethinking the utility of a day at the office isn’t just a New York City issue. From the Journal:
But many firms say having employees work from home has been better than expected and are in no rush to get back to the office. In a recent global survey by trade group CoreNet Global, just 15% of companies said their office occupancy will be back to pre-pandemic levels within six months and 38% said it would take more than a year for everyone to be back.
Of course, a potential negative is that if remote work continues to be common after Covid-19 has been tamed, it’s not hard to imagine that most employers engage in more intrusive worker monitoring. But you might also see some interesting side effects. Harvard Business School for decades analyzed what personal and demographic factors correlated best with starting and career pay. One factor was the biggest predictor: height. Hard to project that over Zoom.
But back to Covid-19’s effects on New York City. The Journal article describes how traders are particularly eager to get back, and how real estate firms are keen to project that it’s safe to get in the pool by bringing their full contingents back. Particular CEOs also volunteered that they believed in the value of having employees present:
[Citigroup] CEO Michael Corbat has said he is a believer in office culture. Citigroup pre-pandemic had knocked down walls in its offices to encourage collaboration and chance meetings, what Mr. Corbat calls “constructive collision.”
Yet Citi expects to have only 5% on premises in New York as of July 1.
Banks are more eager than other concerns to get staff back on deck. What is striking is that some industries that are perceived to be social, like ad agencies, have put themselves in the slow lane. From the Journal:
Twitter Inc., which last month told employees they can work from home indefinitely, said it won’t reopen its New York office on Monday. Ad giant Interpublic Group of Cos., whose agencies employ nearly 10,000 people in New York City, has told its employees they would continue to work from home until at least Labor Day. Omnicom Group Inc. said it would wait between two and four weeks to begin the return to work. Even then, employees won’t be required to return to the office if they aren’t comfortable, said a spokeswoman for the ad giant.
In our previous article on New York City, one reader asserted confidently that the wealthy who had fled to the Hamptons expected to be back in the fall on a “business as usual” basis. It appears that not all rich people think the same. From Peggy O’Neill in the Journal’s comments section:
My daughter works in the Art business in NYC. Many of the gallery owners, executives at Christie’s/Sotheby’s have migrated to their second homes in the Hamptons. A sizeable percentage of them have enrolled their children in schools there. Many will not return to NYC for the foreseeable future, if ever.
There are many virtual art showings.
Oddly, the article does not mention concerns about commuting as a reason to be reluctant to turn up; the story is employer-focused, discussing new office place practices, like plexiglass separating work stations and fewer chairs in conference rooms. But it also gives an early reading of the hit to New York City finances. Recall that we’d warned that emptied out office districts would result in a lot of closures of restaurants, coffee shops, and retailers that served their workers. Again from the Journal:
New York City stands to lose 475,000 jobs over a 12-month period starting in the second quarter, the New York City Independent Budget Office estimated in April. It projects sales-tax revenue will drop 36.4% in 2021 compared with its pre-pandemic projection.
Note that sales taxes were projected to provide $8.3 billion out of a total $69 billion in New York City revenues. But bear in mind that it isn’t just sales taxes that will take a hit. Property taxes are the biggest source of income, and major commercial landlord are aggressive about negotiating (and suing) for lower appraised values when their rent rolls fall. The New York City general corporation tax is based on business revenues, which will fall. So the expected percentage fall in sales tax revenues is dramatic, but don’t think this is the only hit the city will take.
How uniquely bad is New York City’s situation? On the one hand, it has (or had) the biggest daily commute of any US city, and is physically incapable (both from a road and parking standpoint) of handling a big shift from the Metro North and the Path to cars at anything dimly approaching its old level. Boston has a much smaller but also driver-unfriendy central business district, and its colleges and universities will take big budget hits near term (Harvard is already offering early retirement packages).
As we indicated before, other cities may wind up in similar places via different routes, such as ones like Memphis that made a big strategic bet on tourism. I also what happens over time in states where Covid-19 cases are relentlessly rising yet the citizens aren’t masking up or adopting much in the way of other safe habits. For instance, from Alabama Political Reporter last week:
Since the first case of COVID-19 arrived in Alabama in March, Dr. Donald Williamson, the president of the Alabama Hospital Association, has said he’s confident the state’s hospitals can handle an influx of coronavirus patients.
That changed Tuesday morning, when the state recorded the most COVID-19 patients ever being cared for across the state and, on the same day, had the fewest available intensive care beds since the pandemic began.
“For the first time, I would have to say, I’m growing worried about the system,” Williamson told APR. Before Tuesday, Williamson has expressed concerns about individual hospitals or cities, but not the state as a whole.
Yet Montgomery, the city first to run out of ICU beds, has been stumbling all over itself to put a mandatory mask ordinance in place. It was defeated in the City Council last week, only to be implemented on a temporary basis by the mayor as an executive order until the City Council can meet again to reconsider its vote. Expect similarly stop-and-go reactions across the rest of the South, which also means it may become a disease reservoir for the rest of the US
As grim as the picture is in Montgomery, the part of the state with far and away the highest per capita infection rate is Lowndes County, with all of 11,000 residents: rural, poor, lacking in access to medical care.
And in this part of the US, the big disease vector isn’t commuter trains or meetings but church. And unlike office life, you won’t see many give that up.
So even though Covid-19 may seem to have a happy home in cities, it’s a mistake to assume that being in the boonies will save you.
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Your last sentence is very true historically: “So even though Covid-19 may seem to have a happy home in cities, it’s a mistake to assume that being in the boonies will save you.” I’ve mentioned it before, but The Masque of the Red Death is the story I think of whenever I read about the rich running away to their 2nd homes. Or in the case of the UK, people trying to leave London to live in the commuter belt.
You also mention the traders going in and I can confirm that is certainly happening in my asset manager. They are going in on a rota right now, but will certainly be there full time once the execs push the button. There seems to be a push to figure out how they will get 50% into the building by September / October. But London has the same issues with parking as New York (might be worse). People like me can get in by using “active” transport (walking, cycling, and shortly e-scooters!), but how they heck even with the 1 metre rule in place they would be able to get those in the outer-bouroughs / outside of the M25 into work, I have no idea.
Another issue: Work acting as a reservoir of Covid-19. So lets pretend you can get into work and not get infected. You then have to hope your firm is doing more than what the government is telling you to do (especially in the UK). For instance in the UK, there is no requirement to wear masks inside offices or shops. Where I work, even the minimal staff isn’t wearing masks inside. They have to wear them only to enter / exit the buidling, which takes “mask security theatre” to new hieghts. So when they do get their 50% into the building (which I can’t believe will be easy), you still have to deal with meetings where random people have masks and other don’t. And you can’t tell me that people won’t feel like they don’t want to be different, so that will keep mask usage down to the eccentrics, such as myself. I feel like the firm (after speaking to a board member about it recently) is going the libertarian route of – “whatever makes you feel safe” – without taking into consideration social cues from the high ranking people and social pressure mean we’ll never get a huge % using masks. And that will turn the office into a reservoir or super spreader nexus. My area of London has one of the lowest infection rates in London (and in the bottom 1/3rd of the UK), so I feel confident they will be the ones infecting me…They think it’s over and can’t spread again…
I’m wondering if you have experience on this, but i think promotional prospects could become an issue with more home working.
My employer experimented with home working about 15 years ago when it was finding it hard to recruit specific professionals in Dublin. About a dozen people were hired, with their contracts specifying that they could work from home, with a visit to the office once a week. Their contracts however were specific to their level – it was set out specifically that if they went for promotion, the ‘work from home’ element would be null and void. For reasons best known to senior management, the experiment was not considered a success – I think the mid-to high level of management simply found it too difficult to manage the differing work requirements of staff in the office and those working from home.
later, a number of staff managed to negotiate themselves similar arrangements, but on a much more informal basis. They could in theory be told to be in the office at all times, but it was understood that as long as they hit certainly targets, they could stay at home and just come to the office once a week. But again, the unwritten understanding was that they would not go for promotion, or if they did, that informal agreement would be null and void.
So I can see in many sectors this is going to create a significant problem, with a sort of two level staff – one in the office, one set working at home, but only the former being permitted to go for management or other type promotions. Whether that is sustainable or not, I don’t know – in my own office, there has certainly been some internal political issues arising from this – especially when it comes to the allocation of unpopular types of work.
I’ve been thinking about this too. My previous observation has been that political jockeying happens in person, and it’s hard to defend a position remotely against in-person attack.
I discussed this with my son who’s worked in government and the private sector. Though now virtual, his current team is local, but otherwise the corporate hierarchy (for software development anyway) is very distributed, with managers and executives scattered across the country, interacting through conferencing tools. And he praises the quality of decisions in this environment, but notes that the worst decisions come from the very top, from c-suite execs who interact face to face.
In the UK there would be actually a relatively simple solution to that – external contractors. Especially, if WFH would allow them to avoid the dreaded IR35 rule, it would fit very well. Except of course, mass-move to external contractors would not be what the permanent staff would be keen on.
Yes, that sounds familiar. It jives with the remark by Yves about “gossip and political jockeying”
I can imagine that in the short run, gossip and jockeying went genuinely down during the corona-WFH. I also imagine that they will return, with or without work from home. If Teams meetings are not a decent channel for gossip and jockeying, them people will build new channels. It just takes a while. Those new channels can be easily worse than the existing ones – more cliques, even more time-wasting.
In general, I think that a lot of corona-WFH is coasting on the pre-corona period. For example, I am in ongoing projects where I know most people well. I can hear subtleties nucamces in their voices in remote meetings. I am also in new projects, with people I only know from Teams meetings. It’s not the same.
“In general, I think that a lot of corona-WFH is coasting on the pre-corona period.”
I am transitioning between positions (with some continuity) and agree that it can be hard to get new work up and running over Zoom.
But on the other hand, I’ve found that the meetings themselves are slower to start and slower to finish with the familiar faces. Budget some amount of time for chit chat at the beginning, and then count on a few extra questions or interjections at the end. A lot of this is just people responding to drastically diminished social webs and reduced interaction with people outside the household. I think I do it too. I wonder if we get used to it.
That smells like something that could happen. The CIO is making a statement by coming into work every day. The COO is having meetings with senior staff at work as well at least once a week. And there is the fact that the people who have stated they will just continue working from home are the people who have been in the same job forever and just want to do the same job going forward. So, yes, it feels like the political will win over the sensible. Especially since several of the c-suite (and other Exec members) have always disliked the emphasis on caution. They won’t say it, but I know that people will know: If you want to climb the greasy pole, you need to come into the reservoir…
Reduced promotions, wages, career advancement opportunities for the work-at-home versus in-the-office sounds very like the outcome in US 1980’s business ‘accommodations’ for young women called the mommy track.
An interesting local aside: My uni finds itself suddenly in hard times. Everyone who can was ordered by uni to work from home to prevent spread of Covid this spring. Everyone’s salaries are being cut a few percentage points to help the budget. That won’t be enough to offset the fall in revenue. No layoffs yet. However, a memo was sent out saying that layoffs may become necessary; if they become necessary then the work from home people will be the first pool of employees considered for layoffs. Work from home is a double-edged sword.
From my observations, the main activity of the corporate upper echelon is primarily political. Boosting your organization, finding weaknesses on your rivals, etc. The day to day tasks of running the organization are handled by the layers below. It’s 80% castle intrigue, 20% watching the business. I don’t think castle intrigue works very well virtually.
I’m wondering if the big banks, with their obvious ties to the commercial real estate market, have an ulterior motive in pushing their workers back into the office.
Can’t have all that class A office space empty … CMBS seems like the next major financial crisis. I don’t have enough of a grasp on the complex financing schemes to know how long they can keep “see through” buildings on their books before they have to mark them to market.
I don’t believe many banks have CMBSes on their balancesheets.. (at least not directly). The whole point was always to originate the loan and then flog it off to someone else.
Absolutely.
But there is a wider point which I think is true for both CMBS, and CLOs. The fact that Banks don’t own it doesn’t mean there isn’t some horrible stuff associated with problems in those markets.
For CLOs, the owners of those securities appear likely to get stiffed in debt restructurings. So recovery values look like they will be very poor. Victims of the distressed debt funds rather aggressive maneuverings.
With CMBS, the owners would be disproportionately pension funds, endowments etc. If there is a persistent weakness in the underlying asset (i.e. no one needs office space and they start renegotiating rents) the attempts at restructuring will fail I am hearing about will come to naught in the end. There is a bigger correction due in these markets.
Oh, don’t take me wrong – a lot of people (innocent, mostly) will lose a lot of money, as both (CMBSes especially in my opinion were fool’s bet for a while now, CLOs if you avoided PE ones, which was admittedly hard, could have some value)
But I doubt it’s going to be the banks this time round, except indirectly (hedgies, pension funds etc. going down may very well end up with some noncoverable margin/collateral calls, which would ultimately show on banks balance sheets, but we have no idea how).
Vlade, fair point. However I think that just because they don’t own it directly, doesn’t mean they haven’t made loans to entities that do own CMBS (think REITs, which hold CMBS as collateral and get hit with margin calls when the underlying assets get haircut.)
Also there is the possibility that some banks may have written options on CMBS (I am way out of my depth here though.) Remember “counter party risk.”
Banks could lend against CMBSes in REITs portfolio, but on a massive haircut (which still could mean lost money in the current scenario). Say you’d borrow 50% of the face value (if that). You’ll most likely find worse loans (smaller haircut), but IMO there won’t be too many of those (I could be wrong, people working on the desks lending to REITs and the like are often not too smart and more of sales people than anything, and then it depends on the risk dept in the institution).
Options on CMBSes you could likely count on the fingers of your hands, as CMBSes are fairly illuquid to start with, and options on them would be thus extremely expensive. There would be likely even fewer CDSes on CMBSes unless someone had (or believed they had) a natural hedge.
IMO the next banking crisis will come from the same place as all previous ones – liquidity (lack of). But I have no idea what will trigger that particular liquidity hoarding, especially with Fed and co willing to throw any amount of cash (i.e. liquidity on the market).
One place I could see is a medium size economy that is dollarised and reasonably well connected (Hong Kong?) but unable to get Fed Swaps lines in time. HK in particular could be a problem as Fed may loath (or even be unable to in time, if Trump does something silly) to provide swap lines there. It’s one of the reasons why HSBC/StanChart ar never really going to move their HQ and regulator to HK IMO. They could find themselves w/o dollar liquidity way too easily, and it would kill them. Of course, the alternative could be the Chinese gov providing them with their stash of USD liquidity, but that would come in at a price – and may not even work under some circumstances.
It will be over when the globalists can’t get any more mileage out of it and not until. Relax and enjoy the show. Avoid working at all if you can get away with it.
> And in this part of the US, the big disease vector isn’t commuter trains or meetings but church. And unlike office life, you won’t see many give that up.
‘Enter through the back door’: secret church services in Mexico and Brazil defy Covid-19 rules Guardian
How does a pastor pay his bills? By mostly exhorting the congregation (in-person) to be generous when the offering plate is passed.
His name escapes me at the moment, but a French Urban Geographer has in the past done some very interesting work in Europe on how in the past 20 years there has been a hidden shift in urban areas (his work is in France, but it clearly applies more widely) due to the way in which perceived liveability in cities has combined with the greater mobility of professional knowledge workers has led to very diverging outcomes for cities at all scales. What he’s shown is that a few very successful big cities, such as Paris, have spawned a chain of equally successful smaller cities (such as Bordeaux) which are booming at the expense of those cities and towns which are perceived to be unattractive (such as Marseilles or Nice). The later are becoming dumping grounds for the poor and unqualified immigrants, while the former have become very wealthy, but often dependant on a working underclass pushed to the peripheries. The same pattern can be seen in very many countries, although for varying reasons perhaps less so in Asia than in Europe/ the US (although I think there is some evidence in Japan of a shift to smaller cities perceived to be nice places to live). Richard Florida has written quite a bit on this from the US perspective.
I think Covid is likely to both reinforce some elements of this change, while also radically altering its geographical impact. Perception can be more important than actual facts on the ground – so I think its entirely possible that this could be, as Yves suggests, a game changing disaster for NY. It should be noted that the US taxation system is likely to exacerbate any such impact more than in Europe/Asia, where locally raised taxes are usually less important than centralised distribution.
The big change Covid will make is that its possible that cities that are flourishing thanks to a perception that they are a nice place to visit and live, might suffer disproportionately compared to, for example, ‘safe’ sprawling exurb type urban areas such as Albuquerque or Houston or similar. Its very hard to predict, although I suspect that a perception of being able to drive from home to suburban low rise office to drive-thru to home may be ‘perceived’ to be safer than being in a high density city, even if the reality says otherwise.
I think it will certainly accelerate a process thats already been underway (although perhaps at a lower level than people think) of mobile workers simply choosing to live in the rural area/small town of their choice – or even country of their choice (the internet is full of vlogs of IT workers and translators choosing to live in Costa Rica or Portugal or Georgia or Thailand, and usually finding out its not what they hoped). I think we’ll see a boom in this, although whether it will be at a scale to make a difference, I’m not so sure.
Plutonium Kun: I think that you are referring to Christophe Guilluy.
Here is an enlightening interview that dovetails with the points that you make:
https://www.bloomberg.com/news/articles/2019-06-12/a-french-thinker-diagnoses-u-s-political-anger
Very interesting.
What generates the most income will rule. If business can save bucks with working at home it will happen. They will live with some of the negatives if it make them more money.
Work for a large bank, working on the real estate re-loading, and can confirm we are moving slowly. The biggest issue we have is that we need time to think through how to reconfigure our spaces for the new normal. We might load our buildings at 10% to start, and we ultimately have goals to reach 50%+ but we need time to complete massive space transformation, resulting not just in changes to the office floors but also to lobbies and shared spaces (e.g. we are dealing with a surge in bike usage, resulting in the need to increase bike storage and shower facilities, etc.)
We are undoubtedly going through the most significant commercial real estate transformation in a generation. There is no going back to normal. Also: we are setting policies at the company level and the biggest challenge I’ve faced so far is the human behavior element. Many people are ready for the “new normal” but a minority of our workers still think they are going back to the way things were.
I am one of that minority. This pandemic will pass eventually – if pandemics didn’t peter out on their own we wouldn’t be here chatting about it over the interwebs. And if this one doesn’t peter out, well then we have a lot bigger problem than worrying about our mostly BS office jobs anyway.
My office is also setting policies for a return to the office and considering social distancing at work, wearing masks, temperature checks, etc. That to me says that it isn’t really safe yet to start sitting in closed spaces for long periods of time in close proximity to other people, but management is willing to take the risk to get those profits back up as long as enough precautions are taken to keep them from being sued when the inevitable happens in their office.
There is always a risk of catching an illness from another person. Before the pandemic we didn’t worry about it all that much. During the pandemic, obviously extra precautions should be taken – stay at home and limit contact with other people. Once it has passed, I see no reason why we should still all run around like a bunch of chicken littles.
But who knows – in a capitalist society concerned more with the bottom line than the health and wellbeing of its citizens maybe our corporate masters really can for example force us all to sport PPE in perpetuity whether it’s necessary or not. The capitalists that sell PPE have gotten used to their new higher incomes and we can’t just take that away from them can we?
I live in a NYC suburb. Many inhabitants work in the city. They commute by
bus to the Port Authority, which is the least expensive option; take a train into Penn Station, I learned the hard way that Newark has a Penn Station too;
and for the very well off, take a personal vehicle.
One additional incentive for taking a bus was the free parking proximate to the station. For the past few months those parking lots have been empty. Starting last week only a small number of cars were sitting in the lots. This indicates to me that a lot of lower income work in restaurants, hotels and retail is not starting back up any time soon.
I do not pal around with any landlords but my suspicion is there is a good bit of uncollected rent here. Without any further personal cash distribution by the federal government something ugly has got to give. The seemingly daily executions by police are not going down well. So far the discontent is expressed in peaceful protests which our little police force is not crushing. But when the money runs dry, my goodness, what will come next?
Our farmer’s market has been open the past few weeks but I think its doing about half its usual business. People lack the cash. I wonder if Dollar Tree, Dollar General, and the Dollar Store will have to close (one can hope) due to a lack of business.
One of the ceos of those brands pointed out they wouldn’t be expanding if the economy was doing well, but since those stores largely peddle in daily “necessities” I expect them to run longer than most stores.
Better headline: Corporations Exploit Crisis to Shift Billions in Expenses to Workers.
What are the odds that companies will compensate office workers for the utilities, wear and tear and maintenance on their residences? How many of these newly liberated workers actually a) have enough space in their homes to set aside a place for “regular and exclusive” use and b) make enough money to itemize and take advantage of the home office deduction?
What are the odds that companies will pass the wonderful “efficiencies” of lower commercial rent, utilities and maintenance on to their workers in higher salaries? Never mind compensating them for continued spiraling increases in residential rent and mortgages?
I’m all for working at home. But I live in the Northeastern US in a small 120 year old wood frame house with my wife and 25 yo son. Running window unit ac all day to keep equipment and myself cool enough to function and concentrate is expensive. My work situation at the office was untenable bf COVID anyway, so I had been working at home a lot. But there’s no real “office”, no real tax advantages. We just eat the expenses. We have two good salaries and can afford it, but multiply that by millions of workers, and someone is making a whole lot of money and a lot of someones ain’t.
Commutes have always been the worker responsibility, though, as well as extra crap added on like city wage taxes. Not to mention that unless you’re a great planner, you at least sometimes eat out at work.
My internet bill is the same. Power bill might be up a little. But I don’t drive anywhere anymore. If I took public transit like I used to, I’d be paying $125/month just to get onto a train that was always late.
If you think for one minute the cities are going to let you get out of paying the city tax while you are working at home, I have a few bridges to sell you. They will press this until it makes businesses leave.
Your internet may be the same, but is your boss snooping at everything you do on your computer? Whose internet is it then?
Well, as far as I can tell, Philly, where I sometimes work, can’t recover the wage tax. https://www.inquirer.com/news/wage-tax-work-from-home-philadelphia-remote-resident-20200408.html
Boss isn’t snooping, thank God, so I’d have much different feelings. But I only know one at home worker with major snooping and that’s because his manager is a real piece of work. They also just furloughed him.
I am so happy to hear about both of those positive things. I still doubt the cities are going to give up the money!
We are not being snooped on yet, but we have to submit a log and keep to a schedule,
If the company has multiple locations, it could easily reassign the worker to one outside the high priced city.
I would have thought most would find the savings in commute expenses would exceed the boost in home costs… plus the great benefit of time savings, it took me an hour each way before I retired. Plus I breathed air from the freeway. The gov rate of .555/mile might be high, but that calculation was 1000+/month for me.
Granted some homes might not have a suitable space.
IMO corps will like spending less, maybe a lot less, on high priced office rents.
People spend less on commuting… and unlike corps, their savings are after tax.
Cars last longer. Less pollution. More leisure time. Most will like this.
Consequences… people move to low tax states. Offices convert to dwellings.
When looking at the actual data and not just reading headlines – Alabama has plenty of ICU beds. https://covid19.healthdata.org/united-states-of-america/alabama.
Luckily, my decision was pushed out until at least the end of July, but it’s not just workers in NY that may not return. With cases spiking in my state, finding out the ‘medical professionals’ that we should be trusting are flat out liars let alone the ‘leaders’ playing political hot potato, and active cases being reported by those in our office who cannot work from home for some reason in the last week or two – i’ll face certain financial ruin, but I’m not sure I’ll be able to make myself go back into the office before a vaccine is developed. And I guarantee our senior management will go back to their ‘no one works from home’ policy as soon as they can. Truly scary stuff.
Are you in a city that’s mandating public mask use when social distancing isn’t possible? That’s what is happening here in Tucson. Link:
https://www.tucsonaz.gov/newsnet/mayor-romero-issues-new-mask-requirement
Could what we are seeing be a case of the way that things should have been? Let me back up here. Back in the 90s with the arrival of the commercial internet, there was a lot of promise on offer. So back then you might have suggested that a lot of workers could do their work at home. The advantages would have been that the workers would have saved hours & hours of travel to & from work, cut down on transport expenses, and made for a less stressful environment. For bosses it would mean that less work space would be needed meaning a smaller floor-print with consequent saving on rent & utilities for a start. For society, that would mean less cars, trains, buses needed due to reduced demand.
But it did not seem to work out that way. Until now that is. Maybe with so many people working from home what we are seeing is how things should have developed. If bosses are having a whinge about it well tough luck. That is why they are paid the big bikkies. So why did it not change before? I may be wrong here but I suspect that it comes down to basically ego. Too many managers wanted their workers on sight where they could keep watch on them and ‘interact’ with them. Sort of like the office version of Amazon workers but without the wearable monitors. If this sounds unlikely, then ask why open plan-offices are so common when studies show that they reduce overall performance but do let bosses watch everyone. Bosses want to show their power by harassing their workers. Why else would they bring in hot-desking? Again, I may be wrong but I suspect that there may be an element of truth in what I say here.
Could be. One wonders if our bosses were selected in part because of their ability to lead the dense corporate environment, and they know it.
Oh absolutely. Most middle management doesn’t play a constructive role. They’re enforcers for HR and the c-level.
Now that the cat is out of the bag, of course middle management is panicking. They’ve gone from essential in an in-person environment to being totally superfluous, since most people will do their work from home or do it from an office, or do it from a cave. Most people like working to some degree and like getting paid even better. Slackers are going to slack no matter where they are, on the other hand, and slackers are probably a pareto distribution.
There is also the matter of bullshit jobs, and of incomprehensible jobs. In the former case, the bosses don’t know what the employee is doing because he/she/it isn’t doing anything; so they want to see the body. In the case of incomprehensible jobs (say, old guy has arcane knowledge of still-critical legacy system; he’s doing something, but no one knows what) the body must be seen because the work product is unintelligible. It doesn’t matter whether the job can be done at home, it’s the political predicament of the boss — something which will change only when the culture changes, like when we get rid of capitalism.
https://www.newsday.com/long-island/suffolk/east-end-schools-nyc-students-covid19-1.44866373
https://www.cnbc.com/2020/06/14/nyc-private-schools-prep-for-enrollment-decline-amid-covid-19.html
According to one source quoted in the CNBC piece (June 14), Manhattan private schools are anticipating a potential enrollment decline this fall of between 10-25%. Correspondingly, private schools in the Hamptons and other 2nd home enclaves are seeing both inquiry and enrollment increases. According to the “Newsday” report (May 24, so almost a month old), there have not been notable increases in public school enrollments. As of that date, increases seem mainly confined to private high-tuition schools., i.e., the super-wealthy.
A couple of interesting takeaways from the “Newsday” article: (1) The private school administrator in East Hampton observed a similar phenomenon following 9/11. Enrollments rose and then “gradually declined in the ensuing years.” (2) The same administrator: “I think parents are trying to wait until the last minute [to enroll] because they are hoping the can go back to the city.”
According to another, “One of the things we’re wondering is if this urban flight will be temporary or more long-term….We’re hearing different things from different families.” My take from both articles as well as my local sources is: temporary, although that may mean through the 2020-2021 school year. There are some interesting variables at play as we know, and these will affect both duration and longer-term outcomes.
As I have said, we shall see. To quote Twain, “The reports of my [NYC’s] death are greatly exaggerated.”
Don’t straw man the post. I have never ever suggested that New York City will go away. But you appear unfamiliar with what the city was like during its fiscal crisis.
Oh come on now, who is straw manning whom here? I neither said nor implied that your position is that NYC would “go away,” whatever that means. Nor did I ever state in a previous comment last week that you proclaimed NY’s “demise,” although your essay on that occasion conveyed I would argue an “end or failure” (O.E.D., “demise”) of at least NYC in its present constellation. You utilized the “straw man” spectre that time as well.
Somehow I get the feeling that you do not appreciate push back on at least some positions on which you stand and for some reason feel very strongly about. OK, you run the blog. So be it. My issue here is not so much one of disagreement as one of respect.
By the way, speaking of the last point, I was both deeply involved and deeply affected by the NYC financial crisis, a subject on which I hold strong recollections and opinions. But perhaps for another day, although I doubt it,
Fascinating!
I’m in the nonprofit sector which suffers from much of the same dysfunction as the corporate world in terms of the propensity for all the little Trumps to rise to the top. In addition, much of corporate and private philanthropy goes to insular groups of “safe” nonprofits that massage the egos of donors and don’t rock the boat in any meaningful way.
I have always loathed the innumerable conferences and “conveenings” with their “fireside chats” and invitation only side events which serve simply to reinforce the hierarchical status quo and the elimination of these events has been a God-send in my opinion.
The execs and status seekers at both nonprofits and funders have been beside themselves and their PR people are now producing innumerable online video events in a desperate attempt to try to maintain the status quo. For some reason, these online events really expose how vapid many of these folks are and how little they actually have to say that has any value – maybe because it’s so much easier to close a browser window than walk out of a room after flying hundreds of miles to get there.
I have wondered if others have seen the same? Does the virtual commerce world undermine the dysfunctional execs hold on power or am I just engaging in wishful thinking? And/or is it possible that Trump is simply laying bare the stupidity and worthlessness of all the empty suits?
Also complicating matters is the issue of childcare. Offices can’t get back to normal if parents have to home school children, which is looking like it will happen again in the fall.
I don’t see working at home to be practical in the long term.
How would one bring new hires up to speed without contact with the more experienced?
Working at home is lonely and inconvenient too. Very few have all the knowledge they need to work in isolation for a long time.
For the rural people, this applies:
And in this part of the US, the big disease vector isn’t commuter trains or meetings but church. And unlike office life, you won’t see many give that up.
Nearer my God to Thee /s
London experienced a flood of people leaving in the plague of 1666. After the plague, people returned. The poor died in place.
It is very easy to look at “now”, and believe the current state of affairs is immutable. That’s an error in perception.
It’s not just rural people. Go to Dallas. Church is the anchor of most people’s social lives there, save for the transplants from the North, and they feel under some pressure to join.
Many of the comments here about work-from-home concern themselves with matters of efficiency or profitability. I am retired and perhaps out-of-touch. I believe matters of empire and prestige were by far the greatest concern of the middle-managers — the only managers who work at a level where they are visibly surrounded by and interact directly with their minions. They take pride and comfort in looking out over a sea of desks filled with employees appearing busy and productive.
In the large concerns where I worked any measures of true efficiency or profitability had long ago been submerged into a sea of fudge. In hard times, the middle managers could take comfort in their beliefs about how many heads had to roll before theirs. At higher levels of management, empire and prestige took the form of large offices, huge desks, windows, and dedicated staff attending to their whims. The symbolic empire of a organization chart held more weight for these higher managers than crowds of noisy employees filling a room. For the higher managers politics with other higher managers dwarfed concerns about or comfort from a surround of noisy employees.
I think the middle managers are less than enthusiastic to present shift to work-from-home, while the higher managers are mulling the potential of getting rid of the middle-managers and identifying more tasks they might source from far far away or purchase from easily eliminated workers working on contract. [At one place I worked, a middle-manager stepped outside his lane and tried to start his own contracting firm to source workers to his own work area. This attempt to encroach on a prerogative of upper management of course lead to his demise.]
For NYC I believe many firms will need to create new ways to maintain and project their prestige — probably converting large office complexes to prestigious and enticing facades.
I’m beginning to grieve for the Insurance Industry and various hedge funds who own massive office towers, likely to remain empty for the foreseeable. I once had a ‘vision’ from the top of a Japanese Univ building in Honolulu of it as a constructed island surrounded by the sea. Just call me Cassandra :)
Height discrimination is a form of discrimination that is so ubiquitous it is unseen and unnoticed. Notice the incredible percentage of US presidents who are above average height. (And not bald too, but let’s not digress into baldness discrimination.)
Our society is already grossly unfair and unequal for non-whites, women, labor, non-heterosexuals, immigrants, peasants, and many other groups. It would be utopia, if we could recognize our prejudices and treat everybody well. Nevertheless, allow me to make an observational and anecdotal rant about tall favoritism.
The tall person, especially men, has the inside track for promotions and salary raises. An astoundingly high percentage of C-suite executives for big business are tall, white, male, and unbald. (The astute commentariat should help me source evidence for this percentage.) There are, of course, plenty of exceptions. Things worked well for Lloyd Blankfein and his shiny scalp.
I have zero evidence that the decision makers at a company I worked for or interviewed for gave the nod to a tall person rather than an average heighted person (me) or a short person. I, however, have also fallen for the tall bias. For dubious reasons, we automatically project good qualities onto tall men. They are tall so they must have good vision – in the non-ocular sense.
I saw a tall, white, male, and unbald doctor for five different appointments. I didn’t realize this doctor was completely crooked and greedy until after the fifth appointment. One reason is because of my naivete. A second reason is because judging the ability of a doctor is difficult. A third reason is because I saw during the appointments that he was tall and authoritative. He gently demanded his assistants do things for him, and his assistants would obey immediately. I was biased towards believing that this doctor must be skilled. Nevertheless, there is a real possibility that I will still sue for medical malpractice.
And let’s not forget the additional mating opportunities afforded to tall men. I had an extremely superficial female friend – it’s a wonder that we even became friends considering how un-superficial I am – who would openly tell me during a social gathering how sexually attractive certain men were. Since attractiveness is a foreign concept to me, she would point out a particular man and tell me his [family blog]-ability score is off the charts because of this or that quality. Then that man would stand up, and she would lose interest immediately after realizing his lack of height. On to the next tall man to fantasize over. Or seduce.
Working from home the past 3 months I’ve realized how much stress the daily grind affected me. It’s death by 1000 cuts. My commute is only 4 miles 1 way but I was exhausted every day after work.
When I’m finished for the day working from home (longer hours and with more intensity) I still have energy to exercise, run a few errands without the ‘you have to get up and work tomorrow’ voice in the back of my head.
I do worry about the culture impact long term and how onboarding and acculturation will continue.
But I’ve never had an extended WFH break like this in my career and it’s been a overwhelming net positive for me.