This article describes the real reason behind the push back to the office. It’s about rich people gambling on real estate and now office buildings are empty.
These same people own newspapers and media channels which is why their crying voices are being pushed.
"You know what they want?
They want obedient workers.
Obedient workers.
People who are just smart enough to run the machines and do the paperwork and just dumb enough, to passively accept all these increasingly shittier jobs, with the lower pay, the longer hours, the reduced benefits, the end of overtime, and the vanishing pension that disappears the minute you go to collect it." – George Carlin
David Graeber’s book on bullshit jobs blew the myth of office productivity wide open several years ago. The elites have been promising us shorter work weeks for more than a century now. We have the technology to make it happen. As we speak, they’re bragging about their new AI minions.
Of course, that article even admits that onsite employees aren’t more productive. They just find different ways to “goof off,” like shopping online or scrolling their phones. The real ire seems to stem from envy, that remote workers are capable of meeting their responsibilities while also doing healthy things and taking care of themselves, like taking a walk in the middle of the day or (gasp) even a nap. Ironically, wellness articles have been telling bosses to let their employees take walks or naps in the middle of the day for almost 20 years.
Many news outlets finally came clean last year and reported that a big chunk of companies might simply be using office return mandates as an excuse to lay off employees and “restructure” their workforce.
Anywhere from 12 to 20 percent of office space remains vacant. It’s worse than the 2008 recession. If these landlords can’t find a way to make money off their corporate real estate soon, they’re going to start defaulting on their loans. The landlords will go bankrupt, and banks will wind up with giant office towers they can’t sell. More than $1 trillion will go poof.
According to a piece in the Harvard Business Review, the $1 trillion will come due between now and 2026. That explains why CEOs keep making these edicts, and newspapers keep trying to trash remote work. As the piece explains, “The damage could metastasize into a full-blown financial crisis if scores or even hundreds of small and midsize commercial banks fail simultaneously.”
The Federal Reserve’s misguided war on inflation has made everything even worse over the last couple of years. By raising interest rates, they’ve motivated more companies to ditch their office leases. Now commercial real estate is in a death spiral that could tank the economy (again).
Major cities have spent the last several decades catering to these corporate landlords. Now their entire downtowns rely on workers for commerce. We’re talking about all those restaurants and coffee shops that serve breakfast and lunch to white-collar workers, and all the bars where people used to go and complain about work before they spent an hour commuting home.
Once again, the elite have gotten themselves into big trouble. They want the rest of us to bail them out. If they don’t want our tax money, they want us to give up our freedom and autonomy. They want us to sacrifice ourselves on the altar of capitalism to protect their fortunes.
seems like it would behoove the average worker to try to hold out until after 2025. let’s let the axe fall on these billionaire property owners. in my experience, poor people benefit from rich people hitting hardship. things get cheap when they need to come up with liquid capital. i know so many people who were able to buy a house during the 2008 collapse. a lot of properties were auctioned off for pennies on the dollar, and a lot of hard-working people reaped the benefits.
Much as I hate bailing out the rich, I also hate recessions.
We should be pouring money (yes, taxpayer money) into buying and demolishing these office towers, and building housing instead. Apartments and condos. The downtowns that are thriving now are the ones where people actually live there.
Yep, we should bail out the rich by using the people’s taxes to buy their properties off them, with an increasing price tag thanks to the invisible hand of the market
I’m not really jazzed about it, but the alternative seems worse. Maybe if we could boost the rest of the economy enough that the real estate crash would be counterbalanced - but if we do that we risk inflation again.
I thought we knew that from the get go?
Is it the Mandela effect? I feel like there were articles talking about this in 2021.Edit: to be clear, I read the article, it’s quite well written, and definitely worth a read. Wasn’t bashing it.
Yes, we’ve known this for ages already, it’s nothing new. Return to office is about the office, not about the people.
I think most of us who had worked in city centers and had dealt with the price of office space knew it was mainly about real estate from the beginning. For others, the steep price of recently built buildings like Salesforce Tower ($1.1b) or Apple Park ($5b) would’ve been a big hint.
The problem with these real estate driven return-to-office mandates is that at the core they are each a textbook case of the sunk cost fallacy. Those office space leases were signed, but no amount of people in the office is going to help get that money back or help the companies bottom line.
My company painted it as “We’re keeping the janitors and the cafeteria staff employeed!”
Which I get. But if you really cared that much, couldn’t you just…pay them to not come in?
You could shut down locations entirely and use the rent savings to fund retraining programs for the affected staff and still come out ahead.
What an excuse. I don’t think they could care less about those workers.
Yes I think the problem here isn’t with the tenants but whatever property owners they’re renting from aren’t prepared to make payments on loans taken against the property without having a renter to offset costs, and no one’s buying so they’re left holding the bag. Hence all the talk about defaulting.
Also, real estate holding funds are going to take a hit when the cost of those towers decreases. All in all it will be financial market value that is lost in exchange for increased human wellbeing. Good for the little guys, not so good for The Man.
Office space leases are hellaciously long. Not like a 1 year apartment lease. Like decades
Yeah I knew it too, just making sure more people know the real reasons. :)
The media goes on and on about the fake reasons like collaboration and other bullshit.
It was always about control.
Totally, one of the boomer managers at my company was ranting about remote work a few months ago, saying stupid stuff like, “If somebody is remote working, how do I know they are actually working and not just mowing their lawn or cleaning their house?”
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That’s the point, it’s better for people to have free time in their day to actually take care of life stuff.
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If your management method requires you to constantly monitor your employees to make sure you’re squeezing every last ounce of “productivity” out of them, you’re a shitty manager.
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How do you know your employees are working now and not just idly clicking their mice and staring at their screens zoned out? How do you know if an employee is deliberately sandbagging you and pretending they are at 100% capacity when they are actually at 75%?
All those questions betray the fact that they don’t actually care about their employees well-being, they don’t actually care about creating intelligent metrics for productivity or work capacity, they just want control. They want to impose the same brutality they had imposed on them.
It’s very similar to the mentality that those anti-student loan forgiveness folks have. “It’s unfair that I had to slave away to pay off my student loans and they don’t. So I want everybody else to suffer just as much as I did.”
“If somebody is remote working, how do I know they are actually working and not just mowing their lawn or cleaning their house?”
By how much work they are getting done. If they are completing the amount of work expected of them what does it matter if they are doing things in-between?
If you’ve got time to lean, you’ve got time to clean!
The cruelty is the point
It’s very similar to the mentality that those anti-student loan forgiveness folks have. “It’s unfair that I had to slave away to pay off my student loans and they don’t. So I want everybody else to suffer just as much as I did.”
I know this is a tangent but I want to bring it up. Some of us are opposed to student loan forgiveness because it’s a one time handout to millennials that does nothing to actually fix the problem. Not just because we demand other people suffer.
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And money.
Yeah but look deeper. Materially. Corporate real estate, billions of dollars of it sitting empty during the pandemic.
Same with abortion. Certainly about control to a point but mainly about US citizens not having enough kids to keep up the meat grinder in the future.
There’s always a material reason.
“Should we build a world that people want to raise a family in? Nah! Let’s just force them to have children!”
The Federal Reserve’s misguided war on inflation has made everything even worse over the last couple of years. By raising interest rates, they’ve motivated *more *companies to ditch their office leases. Now commercial real estate is in a death spiral that could tank the economy (again).
I think a lot of the “article” is on point but what’s with this blaming the Fed for corporations making bad real estate investments? Inflation has been a huge problem over the last several years. The average person, who can’t simply wish more wages into existence to deal with rising costs, has borne the brunt of it. The Federal Reserve has few and limited tools to deal with inflation. The primary tool being the federal funds rate. Raising the rate is one of the only things they could do in this situation. Doing nothing would ultimately have been catastrophic.
Really depends on whether you think inflation or corporate greed is the underlying problem. The average worker tends to disagree with Fed chair Powell that unemployment needs to be very high and profits skyrocketing. The average gambler tends to agree with Powell that power should be solidified at the top. When the average value creator was getting fucked every which way, the Fed said the economy was strong and we are not in a recession. The average rapacious hedge fund took advantage of the slow rise in rates to buy everything under the sun.
Same data, very different conclusions, all depends on your perspective. I can link solid center US publications to back the worker and solid conservative publications to back the corporation. Should the Fed have been raising rates over the last four years? Yeah, absolutely. Where is the disagreement and the complete lack of any other tool plus the root of rising prices as well.
Just to further add, stock buybacks were considered “stock market manipulation” for a reason. Though the rules were put in place to protect investors, not the rest of us. This still has created a situation that most of us would agree on the framework conflicting with the concept of public trust. That being the concentration of wealth at the top and the SEC’s rules having been changed in 1982 through the efforts of lobbyists over the years. Were the SEC’s rules about securities, and the FTC to return to accountability exempt from lobbied interests, exactly what you just described would be flipped on its head, as we’d be having conversations about the Public Trust and anti-trust instead of bullshit about how the Fed does stuff that benefits wealthy vs fucking over the 98% of US citizens.
I’m just firmly in the position that this prime land would be better used for places people want to go
Yes, but that takes effort and creativity. It’s much easier to just force you to go.
I don’t read that section as blaming the Fed per se. Just explaining one consequence of the Fed raising interest rates.
I just got a new job lately. My position is sorta a unicorn position so my new company has been searching for 6 + months. The reason being is that they now require the person to come in 3 times a week in downtown San Francisco. That basically eliminated 99.999999% of people who aren’t walking distance from their office.
To get around the 3 times a week in the office, my manager changed the position into a contractor position. Even then it took 2 months to find me.
So because the CEO was a dumbass, his growth team is not running at full potential. Losing more money than he would have made in his real estate property.
He is probably not a dumb-ass. He’s probably getting kick-backs from the city for making people come to the city 3 times per week. The city makes a fortune off these deals, and the companies save a bunch on taxes.
Damn. TIL.
According to a piece in the Harvard Business Review, the $1 trillion will come due between now and 2026.
So we just have to hold out for 2 more years it seems.
We hold out forever. The cat is out of the bag and the horses have left the barn. There is no going back. Turn that downtown space into apartments and all of those ancillary businesses have customers again.
Duh
Did they just more figure that out?
These businesses need what they do to seem more expensive than it is so they can maintain what leverage their industry thinks they have.
Otoh, not everyone wants to work from home. I did that for 2 years, and while I would like a hybrid or occasional schedule, in burned out from it.
I also feel like it isn’t healthy to go 6 months without seeing another human aside from a 200 pixel wide zoom feed.
I would need to drop at least $50k on a house expansion just to fit a functional home office anyway.
This is why people should be allowed to work from where they want. Of course it’s not healthy to not meet other people for long times.
Some of my colleagues are single and they felt the same during covid, it was very difficult for them. But I had a family and didn’t feel lonely at all. So situations vary a lot.
Damn, it’s almost like this choice should be up to the worker, not the company, or something.
There’s more to it than that. Corporations get massive tax breaks from the cities and States that they’re located in under the contingency that they maintain a minimum occupancy in their buildings. The government offers them this because they themselves profit immensely from all of the tolls, speeding tickets, parking fees, sales tax on gas and vehicle maintenance, tax on lunch, etc. Basically the government and corporations are conspiring together to create a scenario that necessitates you giving them a bunch of your money. It’s quite disgusting.
