Catastrophic Plunge in Jobs & Labor Force in Los Angeles, San Francisco/Silicon Valley Smacks into Housing Bubbles

Holy cow, Los Angeles. The economy is gradually opening up. But the exodus has started hard and heavy. And the influx has stopped.

By Wolf Richter for WOLF STREET.

A little anecdotal thingy before we get into the horrifying data: I was on a call with a guy from Google – they want my WOLF STREET media mogul empire to spend money advertising on Google. He was working from home, and since he no longer has to go to Google’s office in Redwood City, he moved home to his parents in St. Louis, Missouri. One more soul gone from the Bay Area housing market, and he still has a job.

Coastal California is an expensive place, and if you lose your job, and you’re not rich, and maybe your stock options didn’t pan out, why stick it out? And if you can work from home, why spend a fortune on housing when you can spend a lot less elsewhere? These are the questions bedeviling millions of workers and former workers.

A housing market as inflated as California’s needs a constant influx of people to keep it going. And when people leave – either because their jobs have evaporated or because they can do their work-from-home somewhere else – well, then the housing markets, both renting and buying, head into trouble.

In Los Angeles County – with a population of 10 million – jobs fell off a cliff. This is where California’s largest and most intense outbreak of Covid-19 was threatening to spiral out of control, New-York-City-like. A lockdown and social distancing brought it under control and prevented a New-York-City-like tragedy. But the job market imploded.

The number of working people collapsed by 23%, or by 1.16 million people, counting from December last year, to just 3.79 million workers, the lowest number in the data series going back to 1990.

Until today, the lowest number of workers in the data series – released today by California’s Employment Development Department – was 3.83 million in January 1994, during Southern California’s Aerospace Crisis. Until today, the lowest this century was in January 2010, during the Financial Crisis, with 4.26 million workers. Back in December, there were still 4.95 million workers.

The labor force – and that’s particularly important for the housing market – plunged by 8.3%, or by nearly 400,000 people, to 4.76 million people, the lowest since 2003. The labor force plunged because people left the county, retired, or stopped looking for work. The unemployment rate shot up to 20%.

The chart shows the labor force (black line) and working people (red line). Note the Aerospace Crisis, the Dotcom Bust, and the Financial Crisis. In the prior downturns, the labor force only seriously shrank during the Aerospace Crisis, dropping by 480,000 people over a four-year period. During the Dotcom Bust and the Financial Crisis, there were some wobbles and dips, but no wholesale shrinkage in the labor force (the straight vertical red and black lines on the right are not the frame of the chart but the data lines):

Bay Area hit catastrophically, but less catastrophically than Los Angeles.

San Francisco, Silicon Valley (the counties of San Mateo and Santa Clara), and the East Bay (the counties of Alameda and Contra Costa) are the biggest drivers of employment in the Bay Area. Together, they’re somewhat smaller than Los Angeles County. They’re fused, with many people living in one county and working in another county.

The number of working people in those five counties combined (red line in the chart below) plunged by 13%, or by 545,000 people, to 2.93 million, taking it back to November 1999. It was the largest plunge in the data. The chart below shows the Dotcom Bubble and Bust, compared to which the Financial Crisis was puny. Then came the epic boom of the Everything Bubble, and now the most epic bust.

The labor force (black line) plunged by 192,000 people to 3.36 million, the lowest since August 2014. But labor force movements are slower than changes in jobs. During the Financial Crisis, the labor force barely dipped. During the Dotcom Bust, the labor force continued to drop for two more years after jobs had started to stabilize and tick up again:

Clearly and hopefully, many of these people that have been laid off will get their jobs back. But many won’t. The uncertainty is huge. The entire startup field has been disrupted. That started early last year, and has continued to get worse, with numerous layoffs and shutdowns taking place throughout last year and into this year. Then came Covid. No one knows for sure what’s left over once the dust settles. Many of these jobs will be gone permanently.

In the Bay Area, Big Tech has largely switched to work from home, and their employees have jobs, but it doesn’t matter where they do those jobs, and the exodus, particularly among the younger workers – like my counterpart at Google – has begun there too.

Other people who have been laid off cannot afford to live in the Bay Area for long. For them, the state unemployment compensation and the federal Pandemic Unemployment Assistance help but are not enough to fund the high costs of living. If they haven’t already left, and if they don’t get jobs soon, they will leave. This is precisely what happened during the Dotcom Bust. But it wasn’t all at once. It took years to play out. The average rent dropped 25% during those four years.

Mortgage forbearance and the refusal to pay rent – with evictions on hold – will slow down the process. People can stick it out as long as they don’t have to pay for housing. But this is not a permanent feature. And then the floodgates open.

And there is another driver of the housing market that has evaporated: The influx of people from other countries – in the Bay Area, that’s largely educated people from Asia – has stopped cold.

No one knows how all this will shake out, how many companies will survive this, and how many people they will retain, and how many of those people they retain can work from anywhere, even from St. Louis, and they don’t have to rent or buy a home in the Bay Area.

This will take a long time to sort out and get through – countable in years. The startup shakeout was already underway for a year before Covid had arrived on the scene, but Covid compressed this dynamic into the shortest possible amount of time.

This labor force and jobs data is based on household surveys collected by the Census Bureau in the middle of April. The next set, collected in mid-May to be released a month from now, will likely be even worse. But hopefully, it will stop getting worse after that.

California’s economy is now gradually opening up – the businesses that are still around to open up. Big Tech has continued to work throughout, shifting work to home. What’s left of the startups remains a mystery. Uber, a large employer in the Bay Area, has gone through round after round of layoffs before Covid and doubled down after Covid. Macy’s shut down its tech center in San Francisco early this year before Covid became an issue, and laid off 1,000 people. Charles Schwab announced last November to move its headquarters from San Francisco to Texas. This has been a litany for a while. But the turmoil now is cleaning house.

The turmoil in the housing market and its impact on the “median price.” Read…  Median Home Price Does Classic Head-Fake as Home Sales Plunge and Condo Sales Collapse

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  285 comments for “Catastrophic Plunge in Jobs & Labor Force in Los Angeles, San Francisco/Silicon Valley Smacks into Housing Bubbles

  1. William Smith says:

    “The entire startup field has been disrupted” : move fast and break things. That virus pan-panic certainly did that. Maybe it is a unicorn virus ;-)

    • Thomas Roberts says:

      William Smith,

      Silicon Valley better hope, it’s not a unicorn virus. They are gonna need a lot of magic, if they even dare, if they can even think of daring to lose so much fu**ing money to be able to justify the existence of those startups; both current and future.

      Silicon Valley may have to introduce the 25 year future unicorn bond, which, involves a proprietary secret formula of investing in non-existent future unicorns with a variable negative interest rate. To be clear the unicorns you are investing in won’t exist until after the bond appreciates. It’s based entirely on the hypothetical value those unicorns could have. After the bonds have appreciated the banks, which, issued the bonds, will take the left over money and invest it into startups, thus justifying the bonds value.

  2. 2banana says:

    Oh, it matters.

    “We’ll adjust salary to your location at that point. There’ll be severe ramifications for people who are not honest about this,” Zuckerberg said, hilariously saying that the adjustments were necessary for “taxes and accounting”
    — Mark Zuckerberg

    “Big Tech has largely switched to work from home, and their employees have jobs, but it doesn’t matter where they do those jobs…”

    • Josh says:

      I don’t understand why people are making a big deal out of this. I work for a tech company with multiple locations and having a salary adjustment when you go from the bay area to austin (as an example) has always been the norm. You still end out ahead between the reduced taxes and cost of living. I don’t have a problem with your pay being based on your location.

      • Debt Wazoo says:

        Cost of living is based on salaries. If salaries are based on cost of living, it’s circular.

        Also, how does a tech company benefit when one of their workers moves from a lower-cost to higher-cost city if that worker’s location doesn’t matter to the company? If the company doesn’t benefit, why would they pay more?

        All these tech executives, Zuck included, own overprised tech-city real estate. They’re afraid of popping the bubble before they can cash out. That’s what this is all about.

        People are “making a big deal about it” because Zuck got caught nakedly admitting to this.

        • RepubAnon says:

          I’d guess that it’s more a fall-out of the “our headquarters is in an expensive area” problem. If one lives in the SF Bay Area, Manhattan, etc – you need to be paid more to have about standard of living as someone working in lower-cost areas. Hence the reason for moving headquarters elsewhere – lower salaries for the same talent by eliminating the need for a “cost of living” boost.

          Now that management has been forced to go cold turkey treatment for their “gotta come to the office” habit, I expect more decentralized work from home policies to take hold. There’ll be incentives to move from cramped apartments in high-cost areas to spots where one can rent homes with enough space to have a home office.

          If this trend continues, and high-speed Internet spreads to small towns and rural areas, we could see another retreat from big citie living similar to the 1950s – one that skips the suburbs and goes to small towns and rural areas.

        • rankinfile says:

          He has enough money now to live well for the rest of his life,and his descendants lives for the next 10,000 years.That is if we even last that long.
          When we reopen too soon the spike in deaths will be enormous.When the deaths of Americans reaches to near a million people will want their pound of flesh.World War against China will send those that remain into the stone age.War with China isn’t like Afghanistan or Iraq,it’s the real thing.

        • CZ says:

          Zuck’s real estate holdings are the smallest part of his wealth.

          You have to assume that FB and every company that can do it will start to push jobs to lower cost areas.

        • Thomas Roberts says:

          RepubAnon,

          Personally, I would most of the new cities to be about 200,000 people and well laid out. Somewhere between 200,000 350,000 if very well laid out, would result in peak American cities. I’m thinking.

        • char says:

          @robertson

          200k. That is to small for a mall in todays world. A small movie theater. 1 real theater plus some high schools. Education after high school is probably not possible outside some 2 year college for the local industry. Hospital only for the most generic. For everything else you need to leave the town. Only a 737 airport if it is a tourist destination. 200k is a city to become poor. Double so for any kids that grow up there.

      • Yes but it reduces the wages earned component in the aggregate. We ALL get a little poorer.

      • andy says:

        Josh,
        why not move to India and save even more? You will fit right in, depending on your cast.

    • FinePrintGuy says:

      Why would they even ask? If my browser can figure out my zip code then Facebook can surely know from where it’s employees are logging in for work.

      • MiTurn says:

        My browser indicates that I live in the Seattle area. I don’t even live in Washington state!

      • RepubAnon says:

        State taxes are calculated based on where one lives. If you live in California, and log in via a VPN that shows your location as in a state with no income tax, sooner or later the tax man will get grumpy.

      • Implicit says:

        My Tor Browser right now says I’m from the Netherlands.
        A worker could hook into a server set up in San Fran. and live in Timbuctoo, and pay a friend a small rental fee for placement of the server.

        • 728huey says:

          Or you could be living in Manhattan, Kansas (K-State university) but pay a small server fee to set your residence in midtown Manhattan, NYC.

      • fajensen says:

        Because, They want you to explicitly lie. To better nail you later.

        Using technology, there is no solid proof because all of the tracking tech usually involved is chunks of best-effort services, more or less.

        Those are used for localisation of date-time and languages on web pages and such, so it doesn’t matter much that my IP address according to ‘ip2location.com’ is located in Stockholm, which is 700 km from my Location.

        Using a VPN, I can be anywhere at all. With a good VPN provider, that doesn’t log anything, there is no evidence saying I was’t exactly where I said I was.

        Of course if I am also a total retard and install the FaceBook App …. Especially on Android …. Then They are going to get my real location and the microphones+accelerometers will even pick up that I am taking a shit during an online meeting so that Google can sell me some laxatives! HR no doubt have policies about taking a shit while the boss is talking,

    • Tony22 says:

      Oh, like use a friend’s old address in San Francisco while living in Omaha?
      FukZuck and his people, they are the ones who have ruined the Bay Area for the working class.

    • Canadian says:

      So if I move from, say, San Francisco to Birmingham, Alabama, I’m supposed to become cheaper despite doing the same work I did before (and with the same amount of value).

      I just checked pricing, however, and Silicon Valley products like iPhones still cost just as much in Alabama as they do in San Francisco. Seems to me like this logic doesn’t hold.

      Ultimately, wage deflation and arbitrage leads to massive deflation in pricing too. Apple is learning this the hard way as their overpriced Chinese-designed-and-built $800 to $1,500 phones are being displaced worldwide by Chinese brands that sell similar or better products for $100 to $400.

  3. Tom Stone says:

    Wolf, ouch.
    This will, as you have mentioned, take time to play out.
    Home prices are traditionally sticky on the way down, rents less so.
    A 25% drop in rents could be here ( In SF) by next spring and I wouldn’t be surprised to see a greater drop than that in marginal areas.
    How many Condo’s have been built recently in SF, or are under construction that were projected to sell for $1MM or more?
    That’s where I see a glut of supply coming in the city.
    For Sonoma County it will be the low end that takes the hit early and hardest, some types of Country properties may hold up pretty well but a repeat of the last cycle would result in a 50% drop in the median price over 3 years.
    Ouch.
    It’s likely to be faster this time due to a number of factors.
    This is more likely to be a depression than a recession simply because the USA does not have a functioning National Government.
    It’s going to get real interesting before November comes…

    • Adrian says:

      Tom,
      I would like to discuss more in-depth your thoughts on what is going to happen here in Sonoma county, and real estate in general. I currently build affordable housing for Burbank, but I have also been an agent/ broker since 86. I agree with what you say, I was one of the few who called the last downturn. Perhaps we can put our heads together and figure out what the future holds.

      • Tom Stone says:

        Adrian, I would enjoy that.
        I don’t think putting my contact information here would be appropriate, but you can find me through the MLS, the DRE or a simple google search.

      • gary says:

        If I may offer my two cents into your conversation.

        I believe real estate will continue up after a brief dip. This is inevitable since levels of immigration will only increase. Don’t believe me? Just watch.

        There is simply no other outcome. The economies of western countries are based on real estate values, and they will be pumped up by any means necessary (a kind of neo-feudalism). In fact, the entire “tech bubble unicorn” phenomenon can be considered an indirect pumping of real estate.

        • RagnarD says:

          what?!?!
          That jig is up. Remember it’s a democracy.

          The people here are pissed and voting. And COVID19 is an A-O-Excellent excuse to shut down immigration. They (Fed/govt) will print money to try and save housing, but they aren’t doing “lets bring in Chinese folks to buy houses”.
          Or do you have a preferred country from which we’ll be bringing in workers > home buyers?

          And from which companies will these farang be obtaining their HB-1s?

          Oh, I can’t wait for your reply….

    • Dave Chapman says:

      Tom,
      When prices in Sonoma County have gone down in the past, Graton prices fell harder than Sebastopol prices.
      Similarly, the percentage increase during good time was much higher in Graton.
      This is usually described as “more desirable areas have more price stability”.
      [Similar comments for Palo Alto prices versus East Palo Alto prices.]

      I have a question: Why do you think that low quality housing will be hit so hard? For this to happen, we would need a both a collapse of jobs and a collapse of lending.

  4. Petunia says:

    All those workers leaving California to work in other states don’t have to pay CA state and local taxes anymore. It’s a big win for them to make CA money and live in a lower cost state.

    Facebook is trying to adjust the salaries of remote workers to account for this. If they move to a lower cost area, they make less as well.

    • MCH says:

      You have to admire the Zuck, he knows how to adapt and roll with the punches… well, not him personally, but you get the idea.

      He can still live in Palp Alto at least. I am waiting for him to buy out the rest of his block and turn the area into his own gated community.

    • Kessler says:

      Which brings a question – wouldn’t it be more lucrative for Facebook, for it’s workforce to not be in high taxes state, if they can save up a lot of money on including local taxes in their employee compensation.

    • Debt Wazoo says:

      > Facebook is trying to adjust the salaries of remote workers to account for this.

      “This” is the high cost of living caused by high salaries.

      So you’re saying that they’re adjusting high salaries to account for high salaries.

      It’s circular. That’s not how markets work.

      • Kurtismayfield says:

        The real truth is that a company will pay you whatever it can get away with in order to keep you. If you are in Tulsa instead of San Fran, your high paying job options are limited.. so pay cut.

        If they can get away with a dollar per hour, they would.

        • JFP says:

          This is not new. Facebook has always adjusted salaries based on location. The reason they do so, is that if you allow workers to move from high-cost, high-salary areas to lower-cost, lower-salary areas without adjustment then what happens is you end up paying the other workers in that office more, because otherwise you end up with a two-tiered workforce which causes all kinds of HR issues.

        • RagnarD says:

          IMO / experience, the goal of the company is for you to be mildly disappointed with your total pay package. If you’re happy, they over paid. If you’re pissed, you’ll leave, and assuming you’re a good / valuable worker, that incurs too much cost on their part.
          That’s the dance they do..

      • RepubAnon says:

        It’s more adjusting their salaries to account for the salaries paid by other companies in that area.

        Two markets:

        * Market for workers with the applicable skill set (Employers competing with each other for workers)

        * Housing market for workers within commute range of those jobs. (Tenants competing for available housing in times of scarcity, landlords competing for tenants during economic downturns)

    • David says:

      Facebook et al have always paid less for personnel in inexpensive locations such as India.

  5. CCC says:

    I’m a manager with about 50 people working from home. And yes we are hitting our deliverables still. It’s OK.

    But me and the most senior people in our organization who still come to the office everyday, are starting to wonder why our staff “working from home” take 3 hours to call us back when we ask them to call us. They must be on really important other calls?

    So please put this glorious “everybody is going to be working from home” thing on the back burner. Nobody at work trusts anybody doing that. It’s politically correct to say it’s fine. But it’s not fine.

    • WES says:

      CCC:

      I see two conflicts of interest here!

      Your 50 employees are telling you to leave them alone!

      Being a manager, you need employees to manage to justify your job!

      Maybe it is you who might be feeling a little insecure?

      • CCC says:

        One of the best things I ever learned was Perception is truth. I’ll leave it at that.

        • WES says:

          CCC:

          No, your perception is your reality!

          What you perceive is not always correct!

        • rhodium says:

          There may well be one true truth, but people believe the truth to be a myriad of things that are not mutually exclusive, so many people have to be wrong even though they themselves don’t believe it, and that’s no guarantee that even one person is right. In which case since people see and believe what they want to see and and believe, the truth becomes perception. The truth is, if it is the truth, that it is far easier to be wrong than it is to be right, but we never really see our own truth that way, because otherwise we would be tempted to believe that nothing is the truth.

        • 91B20 1stCav (AUS) says:

          hmmm, and here I was thinking that gravity isn’t just a good idea, but the law…

          May we all find a better day.

      • Willy Winky says:

        Try using MS Teams to communicate.

        If they don’t respond with a message ‘on a call will revert shortly’…. when you ping them.

        There are LOTS of good people who have lost their jobs who will…. and who will probably be willing to work for less.

        • brian t says:

          Using the word “revert” like that should be a sackable offense anyway. No, it doesn’t mean “get back to you”, it means to “return to a previous state”. Such as “reverting to childhood” when under stress.

      • Dave says:

        Well CCC: I have been working long enough in tech (my whole working life, not done yet) and see the working remotely pendulum swing back and forth. Companies love saving the money leasing less space. People don’t trust people and want to see their employees so that they are sure they are working. On the other hand, so much work has been outsourced to India and China because of the perceived savings. You can’t see how your outsourced people but the perceived savings are so juicy that you outsource a lot of important and proprietary work.

        At the end of the day I have concluded it’s all about the money!! When it’s financially beneficial people will be told to work from home and when it’s not they will have to come into the office. Money, money, money!

    • Socal Jason says:

      I oversee a mid-sized set of teams with about 20 people. In general, people are more responsive that ever (Slack!) and are 100% in favor of increased working from home. We are all getting much more done per unit of time, while removing completely unnecessary commute time, gas, and carbon emissions.

      Most of the other mid-to-senior managers where I work feel the same way. This is not a bell that companies can un-ring. Many of us will never go back to 100% in-office time. At best, we’ll use the office for a big client meeting here and there or swing by for a particularly enticing happy hour, etc.

      Work from home has always been the future. Covid-19 just made that future arrive a lot sooner. Once the real big guys (e.g. Facebook) are on board it becomes a standard.

      Let’s save the freeway lanes for those who can’t work from home (medical staff, restaurant workers, utility crews, etc.).

      • Engin-ear says:

        Would you say that distant teams are less controllable?

        Would you say that your team benefits from the team spirit built in pre-covid19 times?

        I see this remote work as ecommerce vs brick-n-mortar trends.

        Remote workers are far more expendable and their wages will be reduced by extreme comptetition.

        Look at the small ecommerce shops: everybody is doing it for a very small profit.

        • AlamedaRenter says:

          I’m in the Bay Area.

          Has anyone else noticed that work seems to be from 630am to about 330pm?

          Like instead of sitting in traffic or on BART, people are up and cranking out emails and doing calls.

          Also, my observation, is that working from home I get 6 or 7 hours of super highly productive work done. Compared to the office with people stopping by my office, having long lunches, going for coffee etc etc.

          9 hours in the office equals about 6.5hrs at home.

          I still go into work 4 days a week cause I work for the government. But I really do feel way more productive from 630am until about 1pm. Just running downstairs to fill up my coffee.

        • Bryan says:

          I have the opposite experience as you. At work I work hard. I have nothing else to focus on, work is all around me, and the entire place is conducive to focusing and getting work done.

          At home there are myriad distractions. I am isolated and not in a place where working is the primary focus. There is larger communication friction because there is no substitute for face to face communication. Meetings are mostly one person talking while everyone else barely pays attention with their mic on mute.

          At work I get 9 hours of solid work done in 9 hours. At home I get 6 hours of work done in 10 hours.

        • Lisa_Hooker says:

          @Bryan – Funny, I have a similar experience over many years in face-to-face meeting after meeting. Meetings are mostly one person talking while everyone else barely pays attention with their EARS on mute and their thumbs twiddling the keys under the table.

    • CZ says:

      But when FP&A start to see how much they’re saving on rent, don’t you think they’ll warm to it?

    • Xabier says:

      If they are all hitting their targets, CCC, maybe you should just back off and reflect that perhaps your insistent calls are not so essential after all?

      Maybe it’s a short sharp shock for you on a hard block with a cheap and chippy chopper (Gilbert & Sullivan) sometime soon?

      I do hope so, you sound rather ghastly.

      • KMOUT says:

        Like you know from little to a damn thing about CCC but feel the need to comment.
        People that don’t respond to me when they are supposed to get a note that says…….. “Or else”……
        Then they’re magically cured.
        Weeds out the slackers.

        • Javert Chip says:

          Oh, yea; it’s pretty obvious that all the really talented people in the company fight to go to work for KMOUT.

          Actually, even admitting to the “…or else…!” management technique is embarrassing, I mean unless your “team” is prison labor.

        • Raging Ranter says:

          Micro-managers are in a bind over this work from home thing to be sure. The old “When I say jump, you say how high” philosophy of management can’t be maintained when workers are in the comfort of their own home. There is a psychological effect in which a demanding manager just can’t establish the same power dynamic without the ability to say “In my office. Now!” There will be some slackers who take advantage of this. But there will also be some domineering control freak managers whose skillset drops off rather precipitously after “Demonstrated ability to browbeat and intimidate staff” suddenly finding themselves entirely ineffectual. Their employer will be forced to take note of this. Those “or else” warnings better be done over the phone in person, not over email, Slack, voicemail, etc. You leave a record of intimidating messages behind and you expose your company to lawsuits. Your employer is well aware of this, and your underlings aren’t the only ones eligible for the magic cure. Try valuing your employees for their productivity instead of their ability to respond quickly to feed your management ego. You’ll stay employed longer.

        • Canadian says:

          And then that note finds its way to Imgur and Glassdoor and Indeed, your name is immortalized in the annals of social media, your company is decried as a toxic workplace unable to attract talent, and you get fired for kicking off the whole shit-show.

    • Debt Wazoo says:

      > Nobody at work trusts anybody doing that.

      Wow, the place you work sounds awful. Might want to try hiring some better people. Or better managers.

      Anyways, glad I don’t work there.

    • 2GeekRnot2Geek says:

      CCC,

      Do any of the people you manage have small or school age children?

      The company I work for has been entirely on WFH since mid-march (When all the schools in SE PA closed,) Many of my team members have elementary school children, and while internet based education is in full swing, there are still things my team mates have to help with. They are very proactive with dates/times that they will be MIA for their kids school work.

      It’s not uncommon for them to be gone for 1 to 3 hours for some virtual presentation. And see emails, specs, docs posted at 9 PM or later the same day.

      You may have a real problem, pr you may have a communication problem.

      And FWIW, the first time I did full time WFH, it took me a few weeks to train myself, that my house was my office.

    • Stephen says:

      CCC – I am with one of the ‘big 3’ Accounting/IT shops. We have been forced to do 100% remote for the last 2 months, and before that, most people only worked in the office 1-2 days/week.

      We have global teams (I am on the IT side of the house), so working in an office really is not really meaningful. It does not make sense for me to commute for two hours a day to go to the office so I can remote into a zoom meeting in my office with people from all over the country and world.

      If people are going to ‘slack’, believe me, they can do it in the office as well as home. People working at home generally find more productive things to do with their ‘down’ time. The dirty little secret of the white collar world is that people are not necessarily engaged every hour of every day.

      Our experience at my firm is that the production has been quite good and most people are generally very happy not having to commute. It saves time and money, and believe me, it is much safer as the roadways here in FL are very crowded and very dangerous at times. Btw, managers who are worth their salt know when deliverables are not met. It’s binary: you meet a deadline or not! If you do meet a deadline, who cares if you happen to do your laundry and feed the cats during this time. It’s time for people to stop this ‘boomer’ attitude that we ‘need to see you in the office everyday.’ Technology has moved on and the work force, at least in IT, has become global. Btw, I am a boomer in my 60’s and I have made the transition to the 2020’s.

    • Michael Fiorillo says:

      Thank you CCC, for inadvertently admitting that management is largely about power and control of labor (i.e., your “need” to be immediately responded to) rather than production itself, which workers are usually more than capable of maintaining themselves.

      Your job appears to be organizationally and productively useless, as is so often the case with managerial jobs; perhaps it’s that loss of (frequently non-productive) power you and your fellow managers find so troubling.

    • RD Blakeslee says:

      The U.S. Patent Office went through this “mistrust” period, when they went to telecommuting for their examiners. No solution is perfect, but the Patent Office fine-tuned their methods of measuring production of the examiners. Frankly, their jobs became “piece work”, and it is apparently working well enough.

      For another example, see Socal Jason’s post, above.

    • Paul says:

      STOP acting like a child! STOP bugging the employees so they can work!!!

    • Kurtismayfield says:

      Just have them all on a messenger program like we are doing.. if they don’t get back to you in a small amount of time, you know they aren’t working.

      I go from working to hone schooling. I post a message telling everyone that I am home schooling and I will be back in an hour. This is the new reality we all have to deal with

      As long as he work and projects are done on schedy, what is the issue?

    • If you don’t know how much work they are doing, that puts you in a awkward position.

      • Javert Chip says:

        Awkward position?

        If you haven’t figured out metrics to manage your group’s work, you’re not really much of a manager…

        …and you (yourself) are probably pretty low value-add…

        …and who needs you?

      • p coyle says:

        marshall brain’s “manna” describes the future for certain levels of management in a work from home environment. those whose duties mostly entail going to meetings and controlling the office culture will be automated, much like the fast food managers in the aforementioned story. the workers, who actually produce things, will abide, most likely with reduced pay. progress!

        • Always wondered in the greater context when automation would get to management. Are we ready for robot bosses? Programmed empathy? Algorithms which know exactly when to trigger incentives? Workers (like stock traders) who know how the algorithms work, and are one step ahead?

    • Sergey says:

      Deliverables hit ok, yet anxious about employees not responding fast enough? I second Wes here – sounds like a manager’s problem. Consider changing your style first and avoiding ad how “call me” requests. It’s 2020 after all.

      (I too have a remote / distributed team across 5 times zones and actively build an outcome driven culture that avoids unnecessary Slack messages and calls)

    • Apple says:

      People still use phones to call people?

      • Anthony A. says:

        Yeah, it actually works pretty well, even without being connected to a wall by a cable.

    • Jeff says:

      Yup, I had the same issue. Glad to be retired and watching it all from a distance.

    • SDub says:

      Countless times since he’s been working from home do I not hear from my manager for two or three days after sending him an email. Meanwhile, even before the exodus out of the office due to COVID-19, employees could spend a couple hours a week in the lunchroom engaging in personal conversation. At the end of the day, who cares as long as the work is done and productivity doesn’t suffer? What might take one employee two hours to complete may take another just one.. And, working from home during the pandemic might also mean home schooling children. What was once a 5 day eight hour day work week in the office has become a 24/7 work week at home.

    • Canadian says:

      >why our staff “working from home” take 3 hours to call us back when we ask them to call us

      They’re likely wondering why you’re wasting their time on pointless check-in calls and endless Zoom meetings instead of letting them crack on with getting their work done.

      Sooner or later, I suspect management will realize the work is getting done despite “managers not trusting employees and being mad they’re not wasting time on micromanaging check-in calls and other wastes of time.”

      Then the management ranks will be severely culled.

    • MissingGeorgeCarlin says:

      I’ve worked in Telecom Site Development (cell towers, etc.) for 20 years and have worked from home for 75-80% of my career. I still work hard and have tough bosses. My output proves I’m working hard.

  6. Jay Johnson says:

    California, New York, Illinois, and I’ve heard others, have been implementing through the proverbial backdoor (i.e. illegally) exit taxes. The various states are utilizing nefarious claims regrading taxes paid or owed to go after high earners (not rich, or connected) that have moved out of state. “No, you were in our state this many days last year, not the number you claim. We found a problem in the last three years of your filings. We are auditing your business’ income and employment tax filings from the past 10 years. Your appointment is at our offices next week Tuesday at 8:00 am. If you are not present…” Etc. They then able to “settle,” extort, their victims because of the legal and travel expenses involved (One reason they don’t go after the rich).

    Expect exit taxes to come out into the open, even become “law” very soon.

    • Tony22 says:

      Jay Johnson, Use credit cards in new home state, pay cash for everything possible in old home exit state so you can’t be tracked back.
      Glad I can help screw over the rapacious bastards that have been milking us for 12% to fund those taking our kid’s jobs and which never provided us with masks, health care or decent roads, in spite of the dollar plus per gallon tax.

  7. Icanwalk says:

    “I’m a manager with about 50 people working from home. And yes we are hitting our deliverables still. It’s OK.

    But me and the most senior people in our organization who still come to the office everyday, are starting to wonder why our staff “working from home” take 3 hours to call us back when we ask them to call us. They must be on really important other calls?”

    No, you’re not. A manager. See above.

  8. MonkeyBusiness says:

    I can’t say about any other field because I know zero, but all I know is that the market for experienced software engineers is still hot.

    I get Linked In messages almost every day including from FAANG and Microsoft. Never going to join Facebook because Zuckerberg is a creep, but every other company is fair play.

    • GotCollateral says:

      I deleted my linkedin over a half a decade ago, and I’m not on social media (only on angel list but hidden from the job search by employers), and I get more emails now for jobs than i did before from FAANG… Wouldn’t work for any of em unless I get to work on what I want in field of interest, I value my time way more than just a check from these folks.

      • MonkeyBusiness says:

        My point wasn’t about LinkedIn. I had feelers out through email as well. And also the ones reaching out to me weren’t bots, I’ve already had a couple of calls with a number of recruiters from those companies.

        I even know a startup (Series D) that’s still planning to hire 60 engineers this year alone.

        There are jobs out there for certain segments for the population.

    • Wolf Richter says:

      Lots of bot-generated LinkedIn messages too.

  9. Phoenix_Ikki says:

    Funny how many of the house humpers in LA still think this will likely only affect housing short term and by next year only couple of % down in price and we are all back in business. Will be really interesting to see how it will unwind after the forebearance are over and white collars are getting laid off due to cost cutting. This thing has long way to go and two months in, this is like first inning and plenty of house humpers and FOMO are already calling the game.

    Wolf, any data on how OC or IE counties are doing? The OC folks seem to think even more so their housing prices are untouchable, I know they have well fewer cases but their job market has got to be taken a pretty significant hit too which shouls translate to home prices at some point.

    • Wolf Richter says:

      In terms of jobs, coastal Southern California, including Orange County, they are in the same ball park with minor variations. But yes, I agree with you. There are lots of people who think that housing prices are “untouchable.” They forget what housing prices did during the Aerospace Crisis in southern California. Or during the Financial Crisis.

      • SoCaJim is rubbing his hands together and raising cash….

      • Tom Stone says:

        Wolf, a headline in Today’s Santa Rosa “Press Democrat” mentions that the county is experiencing its worst unemployment in 80 years.
        This will not “Buff out”, there will be long term consequences even if there is a miraculous cure for the virus by July.
        And I’m more likely to get a date with Halle’ Berry than for that to happen.

    • Tony22 says:

      What’s IE County? Did you mean “Inland Empire”, Riverside and San Bernardino Counties?

      • Phoenix_Ikki says:

        Yup, sorry meant San Bernardino county, which is commonly refer to as Inland Empire. I can’t imagine they are doing any better, last housing crash they were the first shoe to drop.

  10. gwilliard says:

    small correction, from an attentive and grateful reader: <>
    Crisis, of course.

  11. Borderline Millennial says:

    CCC,

    Did it occur to you that maybe it’s time for you to pull back a little bit on micromanagement? Seriously, some workers have young children who are now home 24/7 and they have to entertain them, constantly feed and change them, etc !!!! This isn’t something they had asked for. It happened. What we’re talking about here is if this WFH continues why paying so much to stay in the shabby Bay area. We’re not discussing WFH is fine or not but I can tell you personally that unfortunately I put a lot more hours into my work compared to pre-covid era without the fun of having real people interaction. So have a little compassion…remember rule number for becoming a loving manager that make employees prioritize your calls is to have empathy.

  12. Borderline Millennial says:

    Dear Wolf,

    Thanks for another great article. To add to your data point(s), 3 of my close friends recently left bay area:
    1. A couple with a young child relocated to east coast
    2. A couple and business owner (e-commerce), moved back to Canada
    3. A single tech employee broke his lease of a 400 sqf studio in SF and moved to a coastal city within 1 hr drive of his work place
    4. My family is seriously considering exodus from bay area to another town in CA in early fall. :)

    Sincerely

  13. CZ says:

    We’ll see if this WFH has legs. We’ve been able to do it for years but management has been resistant. Maybe huge savings on rent, meals, gyms and espresso bars will change their attitudes.

    PS: add in all the gig workers and unemployed numbers shoot higher.

  14. Josh says:

    A note of the housing market in Palo Alto. We are seeing more houses in the high $2M (instead of low $3M) but no dramatic movement in prices. The 3 bedroom on less than 8,000sq ft lot I posted about before is still listed for $5M without a single reduction since it was posted 8 months ago. The only reduction I have seen is a house go from $3.2M to $2.8M after only 20 days on the market. https://www.zillow.com/homedetails/1003-Newell-Rd-Palo-Alto-CA-94303/19468600_zpid/ More of that please!

    • Dan Romig says:

      Josh, that $2.8M home is well under $400k in the first ring suburbs of the Twin Cities.

      Location, location and yes, location. The home across the street in my 55406 zip code was listed on May 14, and sold with a pending sale four days later. Asking price was $295k for a nice little 2 bedroom, 1 bath, 920 square foot century-old Craftsman on a 5,080 sq ft lot with a small 1 car garage. It was a second home for a retired couple that had been generating income as an Airbnb until about April of this year.

      A couple of miles outside of the city, this is a home worth $175k.

      I agree that Work From Home should level out real estate pricing somewhat. But it still blows me away that a home where Wolf & wife live costs about six to seven time as much one in Minneapolis does. A year ago, that was about seven to eight times as much.

      • William says:

        In Massachusetts, the school district rating is a big factor. Prices of comparable homes can vary by 300% within a 30 mile circle. There is very little new construction. A $1m home in Lexington could be priced at $300k just 30 miles east of there.

  15. Beardawg says:

    Fascinating article. Thanks Wolf. I lived in So Cal 1986-2002 and felt the Aerospace crunch. Most in my hood just waited it out and re-entered the debt wheel as soon as they could. I cashed out 2002 and moved to AZ (So Cal without smog, crowds, traffic and taxes). Best move ever. Eagles nailed it in the 70’s with Hotel CA. Until you leave, you have no clue you are being stabbed with the steely knives.

  16. Tim says:

    Nope, I’m with CCC on this one. Sorry.

    • Tim says:

      I’m sorry, the bleating above is, just, pathetic.

      If your place is that of an employee, then stop this crap about how your employer should ‘respect’ you.

      You deliver a service, as defined by your contract.

      Grow a pair and think how you can help the F*ck*ng hand that feeds you.

      Jesus..

      • p coyle says:

        if “your place” in that tone of voice is even in your vocabulary, you belong in a dickens novel. sadly, that seems to be the new normal. more gruel please, sir?

      • Huey Long says:

        You know what Tim, I did grow a pair and got a union job and now work under a contract.

        Now my boss shows my co-workers and I respect and has stopped biting the employees’ hands that keep him fed.

      • RenterinNYC says:

        Tim: “stop this crap about how your employer should ‘respect’ you.”

        You are right Tim, that phrase is out of place.
        EVERYBODY has to respect me, not just my employer.
        It’s not optional, non-negotiable.
        If you don’t get it, you are the problem.

      • Canadian says:

        >stop this crap about how your employer should ‘respect’ you.<

        I have, in my time, had the misfortune of working for a couple of employers who had this attitude. In both circumstances, I found an employer who did respect me.

        In situation 1, I was able to attract most of the high performers from the previous employer to my new company and drive the prior company out of business entirely.

        In situation 2, I warned the company that it wouldn't survive because of how it treats its people. 24 months later, they were gone.

        It's the age of empathy. The sociopathic "values" you're demanding are a path to failure. If you don't build community and mutual respect in a team environment, you simply will not survive.

  17. Tim says:

    Oh look, Hertz filed for bankruptcy. How about that.

    Cars to commute in to those tech jobs in California, from wherever elsewhere, may soon be cheaper.

    What’s not to like?

    • Cas127 says:

      Wolf,

      A detailed write up of the Hertz BK would be enlightening – it has a lot of elements (high leverage, high securitization, vast collateral, valuation issues with collateral, under threat by Unicorns, adjacent to vast US auto industry, very complicated corporate legal hierarchy impacting BK, etc.)

      It is an excellent example of how large corporations have tied themselves in financial knots to continually boost returns (via ZIRP enabled techniques) while the true underlying business growth has been…meh.

      So it left them living on the edge (like a *lot* of corps).

      They would have never survived a long sustained 90% decline in revenue in any scenario…but without all the ZIRP-ification (in the interest of unsustainable revenues and stock price growth) they could have lasted much longer than 2 months – they are a major player in a pretty tight oligopoly.

      (Said oligopoly is pretty weird, btw, since auto rental startup capital does not have to be vast…but my guess is that the limited number of airport locations made available may really, really advantage the huge players.

  18. Michael Engel says:

    1) 50K marionettes assemble AAPL in Shanghai. AAPL engineers
    are on the road, to China, 30% of the time.
    2) China teach AAPL engineers how to build.
    3) AAPL engineers are paying PA CA $5K rent, are not compensated for building an office in their private home.
    4) They can work from any other place in the world, cutting RE cost, flying from time to time to the home office and Shanghai.
    5) AAPL have plenty of cash. Since Feb 2020 AAPL cash register in China don’t click much. // SBUX clicked plenty of debt.
    6) Starbuck engaged in buyback and an aggressive expansion in China to water the natives.
    7) Starbuck LT debt/share, Rate Of Change, since Jan 2008, is 34%/ Y.
    8) The Fed had no problems expanding assets from $3T to $7T, but Starback cannot expand its debt forever. That’s not fair !!
    9) Starback Burismas got a raise, for saying “have a great day”. Homeless people can no longer occupy Starbuck bathroom for an hour.
    10) If China & HK Starbuck cash registers will not click bucks, SBUX
    might go BK.

  19. Brian White says:

    I was 60% WFH (200km away from the office) for 4y before this started; 100% now. It’s a lot more difficult than people realize and my unbroken string of excellent productivity reports encountered a significant dip.

    The first months are easy but it gets harder. There are many distractions and nobody watching. Some people thrive but many, probably most, likely a large majority, will have a significant productivity reduction.

    I’ll bet that WFH will be a serious problem for many companies as it becomes clear to employees how much they can get away with and how difficult it is for the company to make a case for termination.

    WOLF, I really don’t care who you use for your advertising… Just please don’t make me read about pressure-washes for my insides!

    • Paulo says:

      The next big investment opportunity. Nanny Cams for home workers. Pinhole cameras. Parabolic mics.

      “You wanta thisa job, youse goona submit to our surveillance protocal. But hey, youse get a free cell phone courtesy of the company which you can take anywhere wit you”.

      Gee, I think of all those solo trades and tech workers driving their vans to fix whatever, without a manager in sight. Micro managing is considered to be bullying, actually. And any worker worth his/her salt knows how to disregard irritating oversight. The first step is to make sure the work is always done when it is supposed to be done…to a high standard. Phone calls? Not so much. Harry Bosch had it down to a science.

      • RD Blakeslee says:

        ” … make sure the work is always done when it is supposed to be done…to a high standard.”

        Amen. That principle served me well, when I was a patent examiner. That was before telecommuting and is universally true, IMO.

      • tom17 says:

        My manager/boss ( wife ) is on the job site with me.
        Though I think most days our PR employee ( Yellow Lab )
        is manager & PR. Easy to bribe & keep happy.

        • Crazy Chester says:

          Sounds like a potential sexual harassment suit in the making. Plus what happens when it is discovered you are also running personal errands for the boss. So watch your step: the Lab will roll on you. Trust me. Seen it happen.

      • Petunia says:

        Most WFH workers do their work on a company owned laptop while logged on to the company network. The companies can control everything on the machine, if they want to, including the camera and microphone. The larger the firm, the more likely they are to have logs showing every thing you have touched in a workday. Same thing with company provided phones.

        • Canadian says:

          Except that a lot of key work doesn’t happen on a computer.

          I often take hours to walk through ideas and come up with inspiration for new stuff. That’s valuable labor and it’s not happening on a ThinkPad.

          At the end of the day, the real question is about trust. My company trusts me to do great work, and I trust them to keep me in the loop. No need for Big Brother.

    • Wolf Richter says:

      Brian White,

      “WOLF, I really don’t care who you use for your advertising… Just please don’t make me read about pressure-washes for my insides!”

      Glad you’re seeing something useful :-]

      A lot of ads I see are swimsuit ads, including my favorite, “swimsuits for busty women,” and I see fashion ads for women, etc. probably because I cover the retail trade and write about it and do a lot of research on it, and so the advertising bots that decide what I and you see have figured out that these ads would be for me.

      Look, internet advertising is done by instant automated auctions at ad exchanges, such as Google’s ad exchange. I have no idea what you’re seeing, or what anyone else is seeing. What you see is in part based on your browsing activity (clear the cache) and sometimes a keyword in the article. I get paid by the ad exchange (such as Google) or ad agency (ad tech companies). Not the advertiser. I have no idea who the advertisers are.

      • Brian White says:

        I can tell the Google ads because they reflect my recent searches. Like trips to Japan (through Feb, anyway) because I’d done research with my mother for her trip-of-a-lifetime (which was supposed to be mid-May).

        It’s mostly Taboola and Outbrain that fill with click-bait garbage ads. I can only surmise that they must pay out more given their extreme popularity among news portals. I understand that publishing, especially News, is a very difficult market these days but it’s hard to take an article seriously when followed or mixed with click-bait ads about casino tricks and what so-and-so looks like now (I’ll be “shocked”).

        Now if you’ll excuse me, I’m going to do some searches for Victoria’s Secret swimsuits…

      • Crazy Chester says:

        I used to click on a few Ads thinking this might buy you a few sips of beer. But damn, all these years and never a busty woman! Instead I’m now at the age, I’m told, of needing to flush out my insides each morning. Just click to find out how. But somehow the recent C19 events reported in your daily posts seem to be working just fine. And “daily” is a conservative measurement. You are absolutely cranking them out with the times. I guess a ‘while the sun shines’ moment.

        • Wolf Richter says:

          Crazy Chester,

          Been running on the same pace for years: 1-2 articles a day, six or seven days a week, with one or two long holiday-weekends off — each usually 3-4 days.

      • Tim says:

        All I get is some tit wanting me to buy funky Shirts!!!!

        …. and kit should I want to go fly fishing…

    • Anthony A. says:

      Years ago, when I worked from home with preschool children at foot, I used to go to the public library to get anything done! It’s hard to WFH and be productive unless you can totally isolate yourself.

    • Cas127 says:

      “how much they can get away with and how difficult it is for the company to make a case for termination.”

      Another argument for management-by-objectives and empirical measurement of outcomes (sales, for instance) rather than inputs (“working” early or late).

      MBO is harder for some jobs…but the more effort/thought put into it, the less significant these problems become.

    • fajensen says:

      There are many distractions and nobody watching.

      Also, some people discovers that maybe 60-80% of ones job is not really needed by anyone. In my case, Nobody seems to complain when one cuts away some of the reporting or a couple of ‘information’ meetings.

      It is quite demotivating when one realises that one wasted 8 years working hard on a ‘career’ about nothing! Won’t happen again, that!!

      With Covid-19 I have begun to think that my true organisational role is that of: “Eremite”. Some faked-up prophet that The Lord of The Manor employs to live in a cave to make prognostications or rants on Risk, Safety, Interface Requirements and Best Practices for his exalted guests, but, mostly there to show off t’Lairds power and wealth!

      The money is still nice at my TBTF. So, I am planning to use the WFH to move to a saner, nicer location, start a private side business and then see if anyone @work notices. Nothing in my contract says I can’t do this, so …

      That sucky bureaucracy that everyone whines about ‘before’ will be an advantage ‘now’ because it will take at least a year before they can spin up HR and sack anyone for slacking or taking the piss.

  20. Anthony says:

    There are lots of different things that change housing needs but there is a brand new one in my area. I live very close to the huge Manchester UK University complex. Overnight 60,000 students disappeared and now they are saying that they may not come back for the new year starting in September. I’ve no idea how large the universities are in LA but I guess if the students don’t come back , then that has to be yet another nail in the LA/ West coast economy…

    • Fallbrook says:

      The YouTube video “Berkeley In Place” by Pedal Born Pictures (@Berkeleyside.com, scroll all the way down) brings tears to this ex-Berkeleyan’s eyes. So sad to see this vital, beautiful, world class little city empty. UCLA/Westwood same same. What is going to happen to all that real estate if students don’t have to go there any more?

    • MC01 says:

      The UCLA (public) had over 45,000 students and 4,000 academic staff last fall, plus 26,000 administrativestaff.
      Loyola Marymount (private) had 9,600 students and 500 academic staff.
      These are just two universities in Los Angeles.

      My take is that most if not all US States will re-open universities and colleges in the Fall, obviously with many precautions. Simply put US higher education is way too critical to the country’s social and economic order to be left in a state of emergency.
      Of course foreign students, especially postgraduates, are not likely to come back right away in large numbers: those from Mainland China may even become personae non gratae altogether.

      Superior education is not merely about going to the Uni to learn how to practice law or to be a chemist: it’s about the exchange of ideas and influences, meeting stimulating people, forging experiences etc. If that weren’t true all it would take to graduate would be a bunch of textbooks and a good memory. That’s the reason why universities will be back soon.

      This emergency is all part of the experience: remember that Newton saw the famous apple falling from the tree on the family farm after he had to flee Cambridge due to the Great Plague. Perhaps something good will come out of this fiasco after all.

      • Xabier says:

        Two days ago the street that runs past Newton’s old rooms at Trinity Coll. had just three people in it including yours truly – as abandoned as it must have been back then.

        It was delightful, if with a slightly unsettling undertone of strangeness: the perfect time to see Cambridge.

      • Cas127 says:

        “Simply put US higher education is way too critical to the country’s social and economic order to be left in a state of emergency.”

        Pfffffbbbbtttt!

        Over time, the bullsh*t to substance ratio at US universities has really soared.

        What you say may still apply to 30% to 40% of university activities but the rest has become eminently disposable – vast swaths of the administration could go to the blade, entire majors (Departments!) could be eradicated, and an ocean of ancillary activity could be wiped from the face of the earth…and the universities would be better/stronger for it.

        • VintageVNvet says:

          Certainly agree with you on this comment Cas. I have been amazed to see all the BS ad infinitum going on at CAL in the fifty years since I was last enrolled there.
          The worst is the incredibly inflated rents versus the wages that students can realistically expect to earn: my great studio apt was $50 per month and I earned $5 per hour, and had all the work I wanted at that rate; today, the apt is $2500, and I have read the students are lucky to get $15/hr…
          That alone IMO, is a good metric of the bloat of the overall situation.
          The ”fees” and so forth are more in line with at least the BLS inflation calculator, but the rents,,, WTF,,, that really needs to change, and I hope if no other good comes out of this current crash, some semblance of reality comes back to the rents, and ASAP.

        • HowNow says:

          Burn the books, Cas. Keep the peasants barefoot and pregnant, or just get rid of them all together.

      • Tim says:

        No they wont’t, necessarily.

        I know a few good Houses and law firms in London that have, for at least the past 10 years, favoured Open University graduates over Oxford, Imperial ,UCL, Edinburgh, Cambridge, King’s, et alia (Russell Group etc).

        ‘They are more prepared to work for it and adapt’ is what I have heard on several occasions.

        Go figure.

      • Tim says:

        Yes, that educating more than the top 15% at university level is a waste of time.

        Sorry, but there it is.

        There was a crash in the Jute market in the 1970’s. Sacks and grocery bags could be manufactured elsewhere more efficiently. The same applies to education.

        The only holding point is the tardy reliance on an old fashioned ‘resume’. That is a useless paper exercise just about everyone other than engineers, doctors and priests.

        As someone once pointed out ‘My company is in the business of delivering holes, efficiently, not drills’.

        It’s time for that to happen to the education industry

        • Tim says:

          By which I mean, that there really isn’t any point in giving a university education to more than the top 15%.

          It just builds an undeserved sense of entitlement. Something that is added to by disgruntlement. Disgruntlement caused by the waving of a flag of success in front of a fee paying fodder that are never going to achieve anything at all.

          The UK needs, probably, 11-13 universities. No more.

          The US, 23, at most.

          The question about what is to be done with the rest…. well, that is a question that will not be answered by any politician this side of the next shooting war.

        • Tim says:

          And, sorry to rant, who do you want?

          A kid from an ‘elite’ institution or whatever podonc state facility, who can’t work out the difference between greta and the calorific reasoning behind and an oil-based economy…. or a mother of 2 who, at 26, who has put herself through the Open University and is hard and keen?

          ?? !!

        • Tim says:

          That said a graduate who can accurately and reliably type is possibly more employable than me.

        • VintageVNvet says:

          Used to be that way in USA Tim.
          As an older than boomer guy, I went first to two HSs that encouraged ”college prep” classes for those interested AND willing to work harder at every subject.
          For everyone else willing to work, there was a wide variety of vocational education opportunities, including senior year OJT if students wanted to do that, and many did.
          Those not willing to work in those days were usually out of school the day they turned 16, the legal age to do so,,, and that was frequently a year or more before HS, as there was very little ”social promotion” going on in any of the public schools that I attended.
          Not sure what happened to the very popular vocational programs that used to be in every HS?
          BTW, enjoyed your last in this thread — something we all experience when we cannot edit easily, eh

      • Adam says:

        45,000 students and 4,000 academic staff last fall, plus 26,000 admin.

        Does the admin seem a little top-heavy to you? these guys and gals are making big bucks too!

        The “administrators” are around 1/3 of the campus population by your numbers.

  21. Michael Engel says:

    12) Cyber is top secret. Cyber attacks can be used only once. Cyber inventory must be large, with variations, to stay in business.
    13) Cyber is for the young. Women brains excel cyber. Artists & nihilists do even better.
    14) U cannot build cyber in China, if Iran or NK is your target.
    15) Cyber gang work in one invisible office.

  22. Endeavor says:

    Still holding firm on the inflationist outcome, Wolf? Looks like deflationairy reset to me? Will they allow this to happen and do the Deep Pockets finally have enough money to go on a distressed economy shopping spree? No country lasted too long with the cost of living elevated where the average person couldn’t afford to live. Will globalism really retreat?

    • Wolf Richter says:

      People need to distinguish between:

      1. consumer price inflation (as measured for example by CPI)
      2. asset price inflation, including home price inflation
      3. wage inflation.

      They’re all VERY different and measured with different tools and metrics. So you can have consumer price inflation and asset price deflation, not problem. Wage inflation is what consumers want, but that’s usually the hardest one to get because the Fed gets pretty aggressive when that starts rising.

      • Pedro says:

        Inflation is defined as the growth in money supply. M1. This has already happened. Indisputable fact. M2 is likely stable or contracting, harder to measure but we all see the reality of reduced consumer spending etc.

        The 3 sub categories you list can all be subjectively argued adnauseum as there’s so much to consider with respect to tech or innovation.

        My new belief is that a better metric would be to monitor savings rate as a measure of prosperity. If people make more but have less to save after necessities we’re in trouble. If they end up with more savings than we’re doing ok. Obsessing over Nominal prices is too hard to do accurately imo.

        But yes inflation in necessities could be our undoing if there’s insufficient supply to meet demand. Food and services come to mind. But possibly offset by declining housing. That’s why it’s tricky. No one really knows honestly. Maybe Facebook can measure rates of depression.. that might be most accurate.

        • Cas127 says:

          “If people make more but have less to save after necessities we’re in trouble”

          Keynesians (and their political familiars) *hate* private savings – it is “wasteful” slack in a non-optimized system.

          Much better that private savings be taxed/ZIRP’ed away so that the political system can “optimize” GDP through politically directed spending.

          No problem/conflict of interest/historical failures there…

        • Wolf Richter says:

          Pedro,

          “Inflation is defined as the growth in money supply. M1.”

          That’s just one definition of inflation, namely “monetary inflation,” using just one metric, M1. It’s a micro-corner of the definition of inflation. And it’s the least common one.

      • tom15 says:

        I can report that in my area of flyover country, Bar food & supper clubs are facing price increases, and supply issues.

        Tonight was the last night the supper club would be able to serve prime rib.

        Beer & Old fashions…no inflation….yet. May need a few more if I gotta go vegan.

        • Wolf Richter says:

          tom15,

          I went to Costco early afternoon today (well, I mean Saturday). Emptiest I’ve ever seen it. Parking garage was half-empty. There were customers but not many. No lines at the cashier.

          They had everything, including bales of TP and tons of meat.

          Wild Sockeye was $9.99 a pound, cheapest I can remember (due to a well-known issue with restaurants having disappeared and Americans not cooking enough fish at home).

          And a case of my favorite local craft brew IPA was $24.99 … same as before … bought two cases to get me through the comments tonight.

          Seasonal fruit was normal price.

          But a lot of stuff was more expensive than last time I went (pre-Covid).

          It sure was a breeze though: didn’t have to fight the Saturday congestion in San Francisco, no wasted time looking for a parking spot, no wait in the store, no aisles blocked by three-generation family outings … Nice!

          But if I owned the stock, or if I wanted to short the stock, I’d call all my friends around the US to go check on their Costco stores. And if they report the same thing — half-empty parking lots on a Saturday afternoon — I’d sell or short the sucker.

        • VintageVNvet says:

          too ”anecdotal” Wolf.
          According to a cashier/friend at the local natural food store
          ( that also has the best prices on wine in tpa bay area, so very popular,) and another cashier/friend at the largest supermarket chain in SE, yesterday and today have been ”crazy” busy as usual for Memorial Day weekend.
          Thinking folks in CA were hitting the beaches/mountains, etc., yesterday, as that state just begins to open up, eh? Here it’s been happening a while longer, so folks here relaxing back at more or less normal ”after the rush” resulting from the opening.
          Prices both places more or less normal for this time of the year, no advance on my fave ”liquidity” any place, so far!

      • Adam says:

        Wage inflation is whats needed to justify elevated housing/asset prices.

        Why does the fed care how much people make?

  23. doug says:

    I see in the morning news that Hertz has filed BK. Looking forward to that discussion.

  24. A/C in SD says:

    Working from home, what’s not to like?
    I manage 8 offices across CA all of which have been tele working since early March. They love it, for the most part. Some miss the office social interaction and say they can’t professionally function. I get that. But a majority are praising the move to telework.
    From a management perspective our productivity is certainly up as is worker morale. The days of “The Office” mentality are dead along with the 9 to 5 Timekeeping!
    Oh, and did I mention no more dealing with rush hour traffic? Another big plus just about anywhere in pre Covid Ca!
    I’m loving this and feel bad for folks like CCC who aren’t yet able to make the transition.

    • Robert says:

      “From a management perspective our productivity is certainly up as is worker morale. The days of “The Office” mentality are dead along with the 9 to 5 Timekeeping!”

      Unless you have a large home with a private office and a nice view working at home in your bunny slippers soon becomes a living hell. Add onto this a barking dog and two screaming kids. There is no separation between work and relaxation.

      Managers see these things through rose colored glasses because their costs plummet. If you’re in San Diego, the traffic is at times so hellish, that maybe people are relating to the fact that they can use those 2-3 extra hours not in traffic for other things.

      • sierra7 says:

        Robert:
        “Managers see these things through rose colored glasses because their costs plummet.”
        Precisely!
        And, when management wakes up and realizes they have the perfect reason to reduce pay because of all the savings of employees not commuting, etc. to work all hell will break loose!

      • LeClerc says:

        Lots of discussion of WFH from the management perspective. What about the real-life IC worker’s life?

        Many young tech workers in SF live in bunk house conditions, with dividers in bedrooms, living rooms converted to bedrooms etc. And you’ve got 2 guys sharing 400sf studios in high-rises.

        How do those guys manage WFH?

        • Wolf Richter says:

          LeClerc,

          WFH means you can work anywhere. Tired of your cramped studio shared with three people? Well, move back with mom and dad in St. Louis and WFH there. See the Google guy in paragraph one.

        • tom10 says:

          They don’t. That is keeping us busy. No longer boomers fleeing
          high taxes & cost of living. I have noticed the upswing in younger
          clients moving out of urban areas.

          Outdoor activities, home schooling, all on the upswing.
          Kayak sales must be through the roof. Every stream & river in my work area is full of them.

    • p coyle says:

      “The days of “The Office” mentality are dead along with the 9 to 5 Timekeeping!”

      yep. welcome to 24/7 timekeeping. several managerial types have already sung the requisite praises in the comments above. best of luck!

  25. Seneca’s Cliff says:

    Wow between the now shut down movie and tv industry, theme parks and rent flight Orange County will be the new Detroit.

  26. Michael Engel says:

    1) There are 50K marionettes assembling cell phones in Shanghai.
    2) Their cost in US will be well above $150K/ worker, including the pyramid
    above.
    3) There many bank branches in SF + NYC. CV19 proved that 70% of bank
    activity can be done online.
    4) Reducing 15% – 20% of banks branches did not affect business.
    5) The largest banks employ hundred of thousands employees, each.
    6) BAC number of employees = 209,000 in 2019.
    7) By hiring 1,000 high end employees and reducing [200K x 0.20]
    40K employees, BAC can save : 40K x 150K = $6B.
    8) Restaurants serving those employees will lose loyal customers.
    9) This trend have started well before Feb/ Mar 2020.
    10) BAC 40K Bank tellers, on induced coma, might never wake up,
    especially if we enter a deep recession.

    • Tim says:

      We build fighter jets in St. Louis. That Google ad salesman now working in his parent’s basement isn’t a that high tech. Peoplr often times forget that there is life and technology outside of Silicon Valley.

    • Michael Engel wrote:
      > CV19 proved that 70% of bank activity can be done online.

      For me, it proved the opposite.

      I gave the IRS my direct deposit information;
      they sent me a paper check anyways.

      How do I cash the check ?

      US Bank ATMs are inside closed University buildings;
      Non-US Bank ATMs won’t deposit my check.

      Despite websites stating things to the contrary,
      no bank will let me deposit a paper check using
      my desktop scanner/computer, nor will they let
      me use my Amazon Fire Tablet ( an Android ).

      Ditto for PayPal; even if I could, they’d want 5 %.

      I’d rather not get an iPhone just so
      I can deposit a paper check;
      so months go by… and the check is undeposited.

      • Petunia says:

        Go to a check cashing place in the dodgy part of town. Pay the fee, get the cash. This is the cost of being off the grid, regardless of the reason.

        • Ms. Petunia replied ( to me ):
          > Go to a check cashing place in the dodgy part of town.
          > Pay the fee, get the cash.

          I don’t use paper cash for anything.
          Lots of viruses on the paper, don’t you know ?

          > This is the cost of being off the grid,
          > regardless of the reason.

          No one is more “on the grid” then me;
          I’m a Microsoft Win10 v1909 C++ programmer
          with an emphasis on Microsoft Excel automation.

          I use CSS extensively/daily:
          Firefox 77, Developers Edition.

          I’ve been working remotely for “ABA.COM”
          ( in Washington DC ), out of Seattle, since 1993.

          I’ve no need for an iPhone, nor do I desire one.
          Check-cashing apps don’t work on my Fire tablet Android.

          On my PC, I’m constantly scanning documents;
          high-resolution, color.

          My ATA/Win10/VoIP phones do everything I need,
          including SMS text messages; minimum fee:
          85 cents per month; it cost me about
          33 $ per -YEAR- ! multiple lines, many calls.

          I don’t trust the U.S. Mail, by the way;
          my friend recently had a money order stolen that way.

          Besides, it’s so 19th century;
          surely, banks could do better than that.

        • Petunia says:

          Jeff,

          That check cashing place will gladly put the cash on a debit card which you can keep adding to at most drug stores or supermarkets. Or you can simply “spend” the money paying off bills, debts, add to investment accounts, buy bitcoin, etc.

        • Tony22 says:

          “Lots of viruses on the paper, don’t you know ?”

          Microwave your cash for twenty seconds at full power. When its hot on the outside and really hot inside, no virus, no bacteria and no fungi. Coins can be put in a jar for a month then used. Don’t be one of those fear driven anti-civil libertarians giving up your right to privacy based on banker driven fear …..Cash is so dirty!

        • Ms Petunia replied ( to me ):
          > That check cashing place will gladly
          > put the cash on a debit card.

          I don’t want to pay the fees,
          nor do I want another debit card;

          as it is, someone can take my debit card
          and buy whatever they want ( hit “credit” ),
          until my checking account is empty.

          I could switch to a bank that has
          more convenient ATMs.

          I’d like to find a bank that allows
          desktop-scanner check deposits;
          but I don’t think one exists.

          On the web, U.S. Bank says it does but,
          when you call them,
          you find out that it doesn’t.

          They can write an iPhone app,
          but they can’t write a desktop app.

        • Jeff says:

          Jeff – install an Android emulator on your pc and go from there.

        • Some “Jeff” replied ( to me ):
          > install an Android emulator on your pc
          > and go from there.

          Iit’s the cell phone service that’s required,
          not an Android per se.

          I already have an Android :
          the Amazon Fire tablet.

          Apparently, there aren’t enough people like me,
          who prefer (desktop) VoIP over a cell phone;
          so banks can’t see the problem.

      • CZ says:

        Use the USB check deposit app on your phone.

      • Canadian says:

        Get a real smartphone (Android or Apple) and it becomes very simple and straightforward to deposit a check.

        An Android phone can be procured for as little as $150 for a decent one.

  27. FinePrintGuy says:

    If everyone can work from home then why not shift your HQ or at least your HR footprint to a low cost locale? Omaha or Houston or Reno or Jacksonville? My sense is that this will accelerate corporate moves to low cost low tax states. Especially if blue state/ blue cities refuse to allow Main Street to reopen.

    • Apple says:

      Unless a CEO wants to live in a small town, it won’t happen. That’s what happened in Connecticut.

    • Canadian says:

      “Main Street” has reopened in several states (GA, TX, FL) and the smart people are staying home.

      The magical thinking arguing that this virus will disappear and we should all ignore the risks and go back to old ways of thinking and working has been an abject failure.

      And now that the latest numbers show rapid increases in infections in states that said no to science and yes to magical thinking, it may lead to human tragedy as well.

      Something tells me that all those sick red staters won’t mind going to a blue state ICU bed when their underfunded, underdeveloped red state health system runs out within a couple of hours of an outbreak.

      Turns out that taxes actually matter for things like hospital beds and public health infrastructure.

  28. breamrod says:

    my son works from home and loves it. I think the main reason is no time clock. If he takes a break from 3 to 6 and then works from 9 to midnight whats the difference? As long as the work gets done before the next day and productivity hangs in there these managers should back off. They are probably caught in the middle and getting grief from the a–holes above them?

    • Endeavor says:

      I worked from home the last 10 years of my work life. It was deadline driven so I couldn’t goof off. The key to working from home is to try and duplicate a professional work environment. That means a separate area out of sight when you are not working to you don’t have to be bothered by the thought that work is always beckoning.

      • VintageVNvet says:

        The ”out of sight” concept is a very good idea Endeavor!
        Might have helped me when I was WFH from Jan of 17 to May of 19, between 2000 — 2500 miles from office.
        WAAAYY too many distractions at home with natural light on four sides, steps to the well stocked fridge, etc., for this older than boomer guy, but, I was charging an hourly fee to clients, and hence could and did ”edit” my charges down to what I thought I had actually accomplished.
        That helped me keep my focus better, and because I was on the phone or email or even texting with clients throughout the day, they knew I was paying attention to their projects I was working on.
        And, even so, there were still the 16 hour work days to meet deadlines, as well as flying too much some weeks to attend mandatory pre-bid inspections, etc.
        Bottom line, as mentioned earlier on this thread is that it all comes down to proven productivity of quality and quantity of deliverables, no matter where one is actually sitting.
        And although I really did enjoy the various tele-conferences, sometimes with folks on in FL, NY, Nor & SoCal, Asia, and Europe, especially where significant progress was seen in real time as design professionals updated drawings live so all could see, I will always miss the in person meetings that did the same, and the camaraderie arising from/of a successful group/team effort.

    • MiTurn says:

      It’s definitely a paradigm shift. ‘Wow, what do we do with these office buildings we rent / bought?’

      • polecat says:

        They might make impressive ruins someday, creating their own mirco environment as decay has it’s way — straight out of an illustrated cover of some 60’s SiFi novel …

        When the energy resources diminish to the point that conveyances & repairs no longer are justified or seen as affordable, relics they shall become.

    • Kurtismayfield says:

      I used to do this 20 years ago, the problem is “management expectations”. They want to be able to grab your attention when they need you.. so if they can’t they freak out (see CCC above).

      Project and work done metrics need to be used for at home work, not constant attention. If management can’t adjust to this, who is the problem?

      • Dave Kunkel says:

        One of the problems for managers is the difficulty some have in clearly defining a projects goals along with ways to measure progress.

        It used to drive me nuts working as a software engineer when the specs for a project would constantly be changed by managers.

        • Lisa_Hooker says:

          And, as a software project manager, it used to drive me nuts when the specs for a project would be constantly changed by the CUSTOMER. And, of course, I had to pass these changes on to my developers.

    • Olivier says:

      Most places have a concept of core hours. WFH or not, most people work in teams and your teammates need to know when you can be reached. If everybody works different hours or, worse, random hours the friction soon becomes intolerable.

      I suspect the problems at CCC’s company is that some people are confusing WFH with flextime, which may or may not have been part of the agreement.

      Lastly, be careful what you wish. If something can be outsourced to a worker in Kansas while the manager is in SF it can probably be outsourced to a worker in Malaysia. Just saying. I WFH myself but within one hour by train from the office and I am careful to show up from time to time; I can even drop by at short notice if need be. Cutting the umbilical cord completely is a risky move IMO.

      • Lisa_Hooker says:

        Interesting part comes when a manager in SF is outsourced to a manager in Romania.

  29. Augusto says:

    Many young people prefer to work from their computer, and prefer social interaction to go through the computer. So why have an office? Already some companies want people to work from home or at clients offices. These companies still have an office where you can come for meetings, work in a common area for a few hours or use a temporary office for a morning, etc…., but there are very few regular staff on site with space of their own. Makes sense to me, saves companies and employees time and money. Many local economies will be happy, people living locally, spending their time and money there rather than downtown or in the big city. However, for high cost downtown commercial real estate, places with high taxes, auto usage, etc……doesn’t look so good……But change is coming…..

    • MiTurn says:

      Augusto,
      I agree. WFH will evolve into a standardized norm for many industries and businesses. Probably with the hybrid model you described.

    • Just Some Random Guy says:

      This has been the case for consulting companies forever. Consultants go to client offices when onsite and work from home the rest of the time. A few times a year everyone gets together somewhere for in person meetings. This model works great.

      What I’ve found is that tech companies, ironically enough were the most resistant to this type of arrangement. The people who make video conferring, and all the collaboration tools for remote workers also want all their employees sitting together elbow to elbow in an office.

  30. Just Some Random Guy says:

    I posted this exact thing here a couple of weeks ago. There will be an exodus from SF, NYC, LA, Seattle to small cities (or villages as Wolf calls them :) ) like Santa Fe, Boise, Bozeman, Reno, etc.

    Why pay $4K a month to rent a studio went you can pay $3K a month to own a nice home with some elbow room to your neighbors? If income stays the same, or even if it drops 10-20%, which some tech companies are talking about for remote workers, you’re still ahead of the game.

    And this is why in my “village” homes are selling like the proverbial hotcakes. It’s back to 2017/18 when houses would be listed on a Friday and sold by Monday.

    I discovered this arbitrage long ago. Earn a coastal income with flyover state taxes and cost of living. It’s awesome baby!

    • Bet says:

      I am seeing this in my smaller Olympic peninsula town. RE has been brisk here the last few years but I am again seeing houses gone in 2 to 4 days from 350k to 800k. Low inventory as well. Pasture land being. Bought up to develop…. sad ,I don’t look forward to more people out here. The house I bought 3 plus years ago is according to Zillow ( doesn’t mean much) up almost 30 percent. Going to be a very interesting decade indeed

    • VeryAmused says:

      So where it this “village” you speak of so we can all google and see for ourselves?

  31. Ppp says:

    And remember, no one is ever going back to those office buildings. No windows, air circulating through the building. All it takes is one sick one. Goodbye cities!!

    • MiTurn says:

      Someone will develop, patent, and sell some sort of HVAC-centralized virus ‘filter’ — UV ray process, maybe. Then these will hecome OSHA required. Hello cities!

      • Ppp says:

        They can develop whatever they please. People will never trust office buildings again.

      • VintageVNvet says:

        Many such devices are out there MT,,, some for many years, but due to not being the very cheapest thing, are not generally installed except in homes where peeps are either in bad shape and know it,,, and/or have more than average/median/mean intelligence AND the money,,eh
        Even back several decades, some of the rich folks I worked for taught me a lot about the availability of expensive types of filtering devices and others designed to make virus size particles be either killed outright, in the HVAC system, or at least neutralized everywhere in the areas being ”air conditioned.”
        Very expensive then, and still likely to be cost prohibitive unless and until mandated, etc.

    • Greg Hamilton says:

      Ppp,
      People will go back to the cities once the real estate prices drop precipitously and buildings have been bought for pennies on the dollar, then magically the virus will disappear, fortunes will have been made or increased, and the general public will be none the wiser.

  32. ft says:

    In this whole discussion, the term Work From Home is incorrectly being used to describe what is really Work At Home. There is a difference, the difference being that Work From Home is generally productive (i.e. field service tech) while Work At Home is generally expendable (i.e. his boss).

  33. Makes you wonder how BLS will handle this? If everybody but one person leaves the workforce, and that person gets a job is it 100% employment! I smell a phony jobs recovery (in an election year:) The cornerstone of US employment in the Greenspan years was mobility. People went where the jobs were, and it still works that way. Only now you go where the jobs aren’t. The US and Ca have run a brain drain for years, (educated Asians stop coming) Intelligence flows back to its roots. A basement in STL is not the Bay Area. That’s culture shock.

  34. Michael Engel says:

    1) Approving a $100K 5Y loan cost about the same as 5Y $50M loan. Large banks ignored small businesses for a reason. Until Feb 2020.
    2) PPP loans surpassed $2T in 3 months.
    3) Assuming an average loan for $250K, high end bank employees approved 8 million, low interest loans, for 90 days.
    4) Approving crumbs for 90 days, cost a lot of money.
    5) PPP loans headache #2, or #3, might be in repetition beyond 2021.
    6) Banks lose money on PPP loans, that will be deleted from their books, within 90 days.
    7) The banks are trying to improve their bad reputation since they were called in 2008 fat cow bankers.
    8) By approving ppp loans the banks might get new customers. Most customers are very loyal to their banks and rarely switch to other banks. Banks sell mortgages. Banks connect RE agent with investors, and a home builder. The banks are Market Makers.
    9) Banks are Match Makers. They connecting a small undeveloped shop with high tech firms in the area, to upgrade products, to make them more efficient, to sell & compete with others.
    10) There is another secret : the banks are in bed with the gov.

  35. Rosebud says:

    Moving , or relocation, does change you. A different longitude and latitude, perhaps a different altitude. Spend some time studying this, and perhaps consult with a Angel before you decide when and where to go.

    • VintageVNvet says:

      Good comment RB, and SO true!
      Folks who have always lived more or less ”coastal” may and probably will experience just as much ”culture shock” moving to fly over country, especially from the rocky mountains to smoky mountains, as moving to another country far away from USA. There are still many places in USA where you will not be allowed to be part of the community for years or ever, if your granddaddy was not born there.
      Your money will be welcome, and it is usually possible to be able to earn a minimal nod with some serious community involvement and service, but that will still be limited almost as much as always being the ”gringo.”

      • Endeavor says:

        Go to a college town. They will mimic your coastal city enough that your id will survive.

  36. DR DOOM says:

    Being the cynical ass I am I would say the Google guy in Missouri is one easy ,cold email message away from being without a job He is faceless. Worse Google Guy AI : Rev 2 gets releasesd the amazing Zuck will eliminate the human position completely.

    • MonkeyBusiness says:

      There’s some truth to this. My old boss likes to say: “if you can work remotely, you might as well be in India.”

      Also, if you want to rise up in any company, you need to form cliques in addition to many other things. Office politics is just not very efficient through Zoom.

      • joe2 says:

        Yes. I’ve pointed out before that out-of-sight is out-of-mind. I even remember instances from my time in the career barrel. You may work hard in mom’s basement, but don’t expect a promotion. I bet the corporate guys are still in the C suite and not their pajamas.

        Remember anything on the internet is public and forever, but washroom talk is still private.

    • Wolf Richter says:

      DR DOOM,

      Well, wait a minute. He is in sales. There is this ancient corporate philosophy: People in sales are the revenue generators — everyone else is an expense. When you cut expenses, you cut the people that are in the expense category, not the people that are in the revenue-generating category.

      • MonkeyBusiness says:

        Seriously this needs to change. Remember Carly Fiorina, the “legendary” Lucent saleswoman? Using your company’s balance sheet to finance sales is not sales.

        • Phoenix_Ikki says:

          How can one forget the likes of her and Meg Whitman trying to run for public office? They myth of competent business leaders make competent public officials is bad enough as it is but with these clowns, bad business leaders to begin with, last thing we need is for them to bring their philosophy and business “wits” to one that suppose to serve the general public. We already living through this cruel experiment right now at the Federal level, we really don’t need to repeat this again and again same way and expect different outcome.

    • California Bob says:

      Anyone remember a few years ago when the ex-Google gal–forgot her name, she took the money and ran–became CEO at Yahoo? She ended all WFH, only to find out that dozens, if not hundreds of WFH ’employees’ had been collecting a paycheck and doing diddly-squat for years. Great while it lasted, I guess.

      • Canadian says:

        Marissa Mayer. And I know several of the WFHers who were fired. They were very effective workers — one sold over $8 million per year in ads and joined a competitor the day afterwards.

        The ending WFH was an effort to lay off workers without having to pay severance. The rationale was “oh I didn’t lay you off, you chose not to come into the office when we required it.”

        Such brilliant business practices didn’t do so well. Mayer sold off the corpse of Yahoo to Verizon for pennies on the dollar, after torching billions of dollars buying worthless startups and generally delivering negative value.

  37. Ppp says:

    You forgot to mention the drop in income. That shoe is yet to drop.

  38. Sparx 832 says:

    A little exciting in your neck of the woods this morning, Wolf… the fire over at Pier 45 currently looks contained though. Hopefully all is well…

    …cheers.

    -Your Russian Hill Neighbor

    • Wolf Richter says:

      Hi Neighbor,

      Yes, the sirens woke me up – one after the other. They just kept coming. And then after it got light enough, I saw the thick smoke from our window. Then the wind died down to where the smoke drifted to our place, and suddenly it smelled like our place was on fire. I went out swimming to the Aquatic Club beach, and even there was smoke in the air. I swam toward the Jeremiah O’Brian across from which the fire was raging, but police boats were blocking the channel. It looked like there was a fireboat out there too, dumping water on the Jeremiah O’Brian or the pier from the other side. By the time I got done swimming, the wind picked up and started blowing all this stuff to Oakland :-]

      • VintageVNvet says:

        Glad you did not have to breathe the ‘SH8” coming off that fire for very long Wolf!
        Watched some video of that fire, and saw that the fire fighters were all equipped with air tanks on their backs, a very good modern improvement, no doubt accelerated by the horrible effects on the FFs at WTC, so we can think that at least some good came out of that one.
        Meanwhile, a couple simple concepts to keep in mind:
        1. If you can smell ”it” you are breathing it; this includes poop and every other form of pollution.
        2. If it smells ”bad” it most likely IS bad for you.
        3. Not always the other way around; some very bad poisons actually smell pretty good,,, others of course do not smell at all…
        4. Events the last several decades have shown clearly that even though some smelly stuff will not kill ya,,, it is definitely the case that combinations of two or more can kill ya in seconds,,, so be very careful about mixing any kinds of vapors, even, possibly, steam.

  39. Harvey Mushman says:

    Here’s how I seeing the whole work from home thing playing out. Right now it looks pretty good for tech workers being able to work from anywhere. But how long will it take before tech companies realize that they can hire tech workers to work from anywhere? For example if I can work from an office in my South Dakota farm house, a guy in Delhi can work from a home office also. Suddenly we could see a whole new wave of outsourcing.

    • Josh says:

      You do realize they figured this out years ago and are already outsourcing as much as possible right? Outsourcing to India has a number of challenges including the time difference. It’s one thing to “outsource” to a rural area that is 1-3 hours away but 12 hours and 30 minutes (30 minutes? Who came up with 30 minute offsets?) is a completely different story. Early morning and late night calls aren’t that much fun.

      • Harvey Mushman says:

        “You do realize they figured this out years ago and are already outsourcing as much as possible right?”

        Yes I know this. My career started in 1984 and I have seen a LOT of change in my field (Electronics, Embedded Programming).

        I get the feeling we are in for a lot more changes!!!

    • Canadian says:

      At the point that everything is outsourced to the lowest bidder, customers start demanding the price savings for themselves.

      I was willing to pay top dollar for Royal Dalton made in England by craftsmen who are fourth generation trade artisans.

      But now that Royal Dalton is made in some El cheapo Chinese factory, I’m willing to pay about 90% less for it… Directly tracking with the savings.

      Same thing is happening in tech. Apple has slapped its logo on cheap Chinese electronics for years and sold them at an astronomical markup… But now the Chinese manufacturers are selling equivalent product for about 80% less than Apple charges.

  40. Seneca’s Cliff says:

    Won’t this work from home really change the need for H1b visa’s ? If you don’t want to pay enough for a programmer from Mumbai to live in the Bay Area,why pay a little less for them to live in Omaha when you can pay a lot less for them to work from home in Mumbai.

    • Harvey Mushman says:

      Exactly!
      That’s why all of the call centers are in India.

      • polecat says:

        We’re all Mumbaians now ..

        Hey! .. Maybe some enterprising soul can venture cap some Benjamin’s.. to create the newest, the hippest, the hyper-rickshaw!

        The perfect accompaniment to one’s newly reduced lifestyle, where You are the conveyance.

    • Pedro says:

      Why even bother bringing them to the USA?

      ESP for the rank-and-file programmers that do routine work. They don’t need to physically be in the USA anymore.

      The cost differential between India and USA based programmer must be 5:1

    • MC01 says:

      Right now there are literally millions of very bright, hard-working and well-educated folks in Asia desperately looking for a way to leave their countries. Some of them may want to escape a government that betrayed them (China), other may want to escape a government that turned out to be even worse than anybody imagined (India) and others still may want to escape a government with as much brain as a peanut (The Philippines).
      If you want to know what these poor folks have to deal with, here’s one: there are presently 18 cruise ships moored in front of Manila. They brought back thousands of Filipino nationals who worked for the cruise industry worldwide. They have all completed the mandatory quarantine and have the government-issued certificate to prove it but there’s no way to get them home because local authorities forgot about it. Humanitarian organizations such as Mission to Seafarers are trying to help but Filipino authorities seem to delight in interfering: most jeepney and minibus drivers are throughly terrified of the police and refuse to be hired to drive these folks back to their homes.
      Yes, that’s how bad it is.

      In this environment all those bright hard-working folks are ready to do just about anything to get out of their country and come work here: as bad as our politicians are (and they are) they aren’t as horrible as theirs.
      Those “high grade” H1B who previously worked for $150,000 will now be ready to work for $120,000 or even less just to get away from their countries

    • Lisa_Hooker says:

      Reminds me of my favorite 2010 travel poster:

      “Vacation in India.”
      “Visit your old job.”

    • fajensen says:

      They can’t properly suppress wages from India!

      The work outsourced to India is only work nobody cares about because there is – in reality – no way to control quality and no way to get back at someone who, f.ex. steals your code repository in India and builds his business on that. Which they will, they don’t care on bit about you and your business problems.

      The Big-Money work is all done Local, under Local Management control. So they have to bring the salary-suppressants into the country.

      That is all what this game is about:

      One can get better work done at similarly lower costs from the Czech Republic, Italy, Rumania, Ukraine, Greece, Spain …. with dramatically fewer time-zone, immigration paperwork and cultural problems, but NO, its gotta be imported 3’rd worlders to get the 3’rd world working conditions planted ‘Here’.

  41. SocalJim says:

    I am seeing quite a few NY, NJ, MI, and PA plates in the SoCal beach towns. Some of the NY plates are on 200K+ exotic cars. I bet they are wealthy east coasters who noticed how low the COVID mortality rate is in the southwest and are relocating to SoCal beach towns. Furthermore, most tech guys would rather live in a SoCal beach town than anywhere else in the world, although the 200K salary does not go far. Fact is the SoCal beach towns are one of the best places in the world to live and the COVID crisis even made them more attractive. Go long.

    • David Hall says:

      Manhattan residents fled the city. There are 1.4 vacant apartments in NYC. Many are trying to sublet their apartments.

    • NARmageddon says:

      Dream on, SocalJim. It’s over.

      • SocalJim says:

        “It’s over.”

        That is possible, but not likely. I put “It’s over” odds at 1/4, perhaps 1/3.

        Most likely, inflation will save the value of many assets in this recession because the central banks are out of control and the virus changed the game.

        Nothing is for sure in life. If you are broke, but you are alive with reasonable health, you are already won. Everything else is gravy. That is rule #1. Don’t ever forget that.

        • Educated but poor Millennial says:

          Inflation happens when there is demand for something. Do you see people making money here to buy homes?It will take some time to see the demand is coming back.
          Lets see what will happen when people start to put there houses for sale, soon. Flood is coming. I decided to be patient.

      • El Katz says:

        $200K cars with out of state plates is not necessarily a sign of a Socal real estate gold rush. Could it simply be that the car is registered in a cheaper state for plates and taxes rather than pay the exorbitant DMV fees in CA? Simple to do if it’s a company lease vehicle.

        Happens here in AZ all the time…… Ferrari’s and Lambo’s with Oregon plates… MN plates…. TX plates….. just to ditch the expensive license fees in AZ. I can see three such example in the driveways of my year round neighbors from my front courtyard, so it’s not the seasonal folks nor are they moving here (they did years ago).

    • Seneca’s Cliff says:

      Lets see if I have this right Jim. The economic salvation of the SoCal beach towns is that a hardscrabble mining millionaire from Pittsburgh is gonna jump in his Lamborghini, ditch his 15,000 square foot mansion and his front row Steelers and Penguins tickets so he can move to a 3000 square foot cabana in Laguna and watch the Mighty Ducks?

      • VintageVNvet says:

        Why not SC?
        A certain RINO/ rom a nator did exactly so, with plenty of ‘special needs’ he was apparently willing and able to pay for, etc…
        BTW, what happened to all the BS he started or got into?
        Or was that just more of the sick ”publicity” of such folks desperately needing to stay in our eyes?
        OTOH, all the hardscrabble folks of any kind that actually earned their millions the hard way that I have ever known, certainly not including the ”trust fund” babies, do NOT go for the 15K SF,,, 5-7 is plenty enough already.
        BTW-2, who de ducks any less than every thing they can get away with?

  42. fred flintstone says:

    What the rich need to understand…….if you socialize losses for your companies being run by your nitwit sons and daughters…….you have no case for resisting total socialism for all citizens.
    Go ahead and move your companies to India…..just don’t expect the 1st Marine division to die going to save it when the locals take it over.
    Two ideas that the fed and the rest of this generation of marshmallows have not learned.

    • 91B20 1stCav (AUS) says:

      Fred, well-said. Methinks nearing two generations, now…

      May we all find a better day.

    • Canadian says:

      Reminds me of what happened with the cruise lines.

      They came to Washington with their hats in their hand and cups extended for alms…

      …and were told to go to Liberia, the Bahamas and Panama, which were their “countries of origin” for tax purposes.

      The outraged reactions were priceless.

  43. sunny129 says:

    Drop in income will come with the realization of global arbitrage in pay in the tech industry.

    “My old boss likes to say: “if you can work remotely, you might as well be in India.”
    A lot truth in this statement!

    just a matter of time when they look at the costs and the value produced from those ‘working from in USA’ vs those who can work easily in a English speaking world – Ireland,Australia and India+++

    • VeryAmused says:

      Complex enterprise level software systems take an immense amount of constant communication to implement successfully. The places that are actually that much cheaper to get remote workers also have communication and timezone issues. These issues can nullify any “savings” rather quickly for small/medium and highly dynamic/creative enterprises.

      The biggest companies with deep pockets and fairly routine work, our big banks/healthcare come to mind, just move the entire tech department to India/China, etc.

      So the ones that can outsource are already gone and the ones that cannot will not. The ones that cannot lobby hard for imported cheaper labor.

      Your bosses statement was much more relevant 15 years ago.

      • timbers says:

        Umm….NOT.

        Johnson&Johnson has a closed and shuttered office in India that was plastered all over Yahoo not long ago.

        Johnson&Johnson ordered it’s office employees to work form home because Covid.

        It doesn’t take too many brain cells to figure out how J&J can save a boatload of $$$ by laying off it’s U.S. work from home workforce which largely temp for hire already and transferring it to India.

        After all, the U.S. tax code will pay them to do it.

        Shocking you’re so lacking of these facts.

      • timbers says:

        “Complex enterprise level software systems take an immense amount of constant communication to implement successfully.”

        Like Boeing paying $9/hr to Indian software temps? For their “immense amount of constant communication (to fix all their errors)”

    • Canadian says:

      There are a lot of great Indian coders and remote professionals.

      There are a lot more terrible Indian coders and remote professionals.

      Focusing just on the cost ignores the quality component and creates an enormous opening for competitors.

  44. Michael Engel says:

    1) The west is moving east to India.
    2) During WWII general Marshall built military camps & factories in the west, to escape potential bombing and because land was cheap.
    3) After Stalin death the west had a recess, but Nikita Sputnik caused
    a new panic. Ike poured 50B to the military complex of the west.
    4) Ike watered the west with money to build hwy networks to the west. High paying jobs to build the suburbs malls and shopping centers attracted many workers who were starving during the depression. The GI bill gave veterans education for free.
    5) LA became more important industrial town than Detroit. LA grew from 1.5M in 1940 to 6M in 1960.
    6) While Hollywood produced westerns, Huges Aircraft and TRW
    produced missiles. DARPA built tiny chips in silicon valley.
    7) Peace with Vietnam shut things down. R/R rejuvenated CA in the 80’s.
    8) Michael Milken gave prosperity to SF and the Nasdaq.
    9) The Nasdaq grew from 160 in Aug 1982 to 5,132 on Mar 2000.
    10) The Nasdaq beat the DOW and became vertical.
    11) PnF Nasdaq-100, weekly, 100 points, x3 reversal ==> indicate that the current NDX is a bubble since 2009(L).

  45. SocalJim says:

    From seattlepi.com

    “Zillow, Redfin predict a ‘suburban boom’ in US real estate market as remote work becomes more common”

    Article goes on to mention less demand in urban cores.

  46. Michael Engel says:

    moderation : the west is moving to the midwest, from Western PA.
    to North and South Dakota, Nebrasks and Kansas.

  47. Merit says:

    I am in tech and have worked at home for 15 years since I refused to move to Silicon Valley. I was actually working to go BACK into an office when the virus hit, because of these observations:

    – Most of these years I was raising a kid, so WFH was mostly good. I had a second job starting 3pm every day, and then became homework helper, Uber driver to sports and so on. When kid went to college the home officing thing lost its usefulness.

    – The spouse worked out of the home, and while home officing was nice at first, all that isolation – even if only until 3pm – really wears down on you after years and years and years (think back 15 years, that is how long I home officed). And I am saying this as an introvert. It got even worse after the kid went to college leaving me in total isolation from 8am-5pm (phone and video calls just aren’t the same). The last few years I was doing the WFH for my kid, not because I wanted to myself. Now with the spouse also home officing the isolation has gone away, but this will not be permanent.

    – As noted in other comments your career will not advance. I am an expert in a very obscure area (and not software) and cannot be outsourced to India, so was secure in my position while I was home officing, but I could have been a senior manager overseeing many people by now instead of a unique expert and individual contributor. It is not about money – I made a boat load of money over the years – it is about learning a new skillset and expanding yourself. I know much more than 15 years ago, but effectively have been doing the same thing all this time.

    – For many years I was pretty smug about not having to commute and deal with traffic, go into an office, and so on, but after a while that solo time and lack of interaction turned into earlier and earlier solo happy hours. I think years of isolation hurts the mental condition in general, and it requires going out and doing other things, doing hobbies and other ways to replace that isolation (I ended up joining my HOA board, did group exercise classes at lunch, and so on, which of course is not happening right now in most of the country)

    The bottom line is that home officing has trade-offs, and I think makes sense for parents for specific periods of time, but I shudder to think of it for singles, and definitely not for an entire career. I regret doing it for so long, but am resigned that I will now be forced to until I retire since my remaining career is relatively short and the current WFH trend will last a little bit. If you are younger I recommend not doing it more than five years or so until this present crises is somewhat forgotten.

    • Stevie says:

      How ironic. I was an individual contributor that in later career was constantly pushed by upper management to take on ever more pseudo-managerial responsibilities that I absolutely loathed, and nowhere an official part of my job description. My last employer dinged me for this enough to end my tenure there. If I had wanted to go into management I would have done so explicitly. Don’t force me to do something I hate and for which I was never qualified!

    • Xabier says:

      A home WORKSHOP, however, is an utter, utter joy.

      Just a step from ones library, painting studio, and garden.

      I got many things wrong in life, but making that move was not one of them. The commuter train on the line to Hell is thankfully a thing of the past.

      • a reader says:

        Xabier,

        Your first two lines are a very succinct recipe for happiness. This is exactly what I’m aiming for in the near future.

        Question: how do you deal with living among locals, who are likely a people much different from yourself? Is there much social interaction to complement your hobby activities?

  48. CZ says:

    Point: corporations will use remote work to slash facility and payroll costs; essentially pushing jobs away from pricey tech hubs, out to low-rent locales.

    Counterpoint: people in demand will still want to live in desirable locations — so there will always be demand for coastal areas, college towns, places with good climate and culture.

    Discuss.

    • Stevie says:

      It seems CEO’s and founders locate companies were they want to live, pretty much regardless of cost of living, taxes, regulations, etc. So glamorous industries pile into fashionable cities despite drawbacks. Which is further evidenced by how back office work may be moved to second or third tier locations, but the juicy jobs remain in overheated first tier areas.

    • VintageVNvet says:

      Possible future distribution of hmn species designed to mitigate minimum destruction of Gaia and other such planetary entities:
      All ”commute” any which way to be only by gravity delta and hmn effort (pedaling, etc.) certainly allowing for simple solar gain to raise local energy gradients, etc.
      Serious Genetic Security Selection and Guarantees of all current hmn genetics must bee completed first and ASAP. Not much of a challenge these days, esp when total accumulation and maintenance accomplished and transparent for all hmn species everywhere with access 2web.
      So, final family friendly future has all genetic possibilities included, with favorable outcomes clearly indicated and intended by all parents, etc…
      Then, and only then, reductio ad minimal/optimal helpful for all species can and should proceed and ASAP.
      This cannot be known at this time, only aimed at generally,,,
      My sorry ass opinion at 75, is approximately one million family homes of approximately 300 hmns of 4 or possibly by then 6 generations, but with very individual and very private (as much as the individual wishes) separate apartments for each person, and a ”grand central” common space with cooking/bathing facilities for all + equal#guests within the most long term space efficient sphere available at the construction of each sphere, the final ones built also including the gravity mirror facility to move it to any known interstellar location.
      At that point, we as a species today can only hope, that our offspring can do the deed of developing and maintaining intra-species cooperation, SO clearly demonstrated by this virus event to be completely lacking at all levels, locally, municipally, county, state, nation, global.

  49. Jdog says:

    If you can do your job from home on your computer, chances are, your employer will figure our you can be replaced by someone in India for $20 a day…..

  50. Paulo says:

    Nice open minded world view about rural living from Pedro.

    Farm animals, really? Could you be more offensive if you tried? Oh well, at least we don’t shit in the street anymore. We gave that up when we got indoor plumbing. What’s your excuse?

  51. Phil says:

    I’m a pretty doom-friendly guy but I think some people are getting carried away imagining how much trends will change in where people want to live, work, etc, as a result of Covid-19. This crisis may go on for another year or two, but in the big picture I don’t see it being enough to dampen our enthusiasm for cultural and economic centers like NYC or LA. People live in such places for a lot of reasons beside a paycheck. The virus will kill way too many people and wreck a lot of people financially, but then it will pass and people will still want to socialize, will still want to be entertained, will still want to live somewhere exciting and vital.

    • Phil says:

      Also in terms of outsourcing, language and culture barriers shouldn’t be overlooked, and if say India was really up to doing all the jobs we need done, why are they still living like it’s the middle ages there?

      I rely on a certain professional media software platform for the majority of my work- and the company that makes it has spent the last 10 years gradually offshoring their coding. The quality of the software has plummeted, the value of that company has fallen with their profits, and it’s become a industry-wide concern because so many businesses and professionals rely on this product that’s being ruined before our eyes.

      My father worked for a major aerospace firm for his whole career and spent the last 15 years as a manager involved in offshoring engineering work to India, Brazil, etc. Over that time they had to do so much error correction and oversight at the American side of the operation that it remained a money-losing proposition when he retired. Perhaps with time it will work out, but again, if say India is really up to the task, why can’t they build their own economy?

      • No Expert says:

        Offshoring is asset stripping.

      • Stevie says:

        That is exactly what happened at a Fortune 500 company I worked for that offshored IT functions. That the few remaining domestic IT folk spent such inordinate effort managing and fixing Indian code made it hard to believe money was saved. I suspect rigid domestic headcount reduction metrics drove this insane policy regardless of any real world cost/benefit effect.

    • Whatsthepoint says:

      I live in London and I have a hobby in the performing arts…atm we are dead in the water, as is the West End, music, festivals, etc. – basically the entire tourist industry, including all those pubs and restaurants, which is huge here. There is a limit to how much art can be online with the ‘Hollywood Square’ format of Zoom!
      Unless or until the collective memory of this virus is long gone, along with the bizarre avoidant behavior and masking, etc., the lifestyle ‘amenities ‘ that make cities attractive will either away over time and drive people away. If it weren’t for a job that keeps me connected here we probably would be looking to leave now…

      • MC01 says:

        Yesterday I went in town to the dentist’s. I expected it to be a post-nuclear wasteland: I had no idea how wrong I was.
        Take away the facemasks and it’s almost back to normal. Apart from spaced tables on the outside bars are in business as usual. I strongly suspect music shows will be if not exactly packed at very least filled to capacity as soon as they are back. I hope to be still around by then. In the meantime I have bought my first “post-crisis” album.

        It’s deeply ironic that after blaming “Covidiots”, bars and retailers for spreading the virus for two months the local media has finally shifted their attention to the true original cause: hospitals. Hospital directors ignored the January 31 directive which officially warned them about the virus and they failed to activate existing protocols to empty packed waiting rooms and to order doctors to wear disposable gloves when visiting patients.
        Implementing these protocols wouldn’t have stopped the virus in its tracks, but it would have much limited the exposure to the virus of those who ultimately paid the highest price: since healthcare here is completely free for all those aged 65 and older (no matter how rich or poor and if they really need it) our waiting rooms used to be packed with these folks. You people have no idea what I have seen when I went in for my regular checkups.

        To be honest the more and more we learn about this fiasco, the more I would much rather be at a packed music show with complete strangers than in a hospital waiting room!

        • Whatsthepoint says:

          Our dentist hasn’t reopened yet nor has our GP or our local…everything is still takeaway. And who in their right mind would come here and undergo a 14 day self quarantine?

        • RedRaider says:

          My experience with the dentist was different. I had an appointment for 5/19 that they rescheduled for 8/21. Due to past neglect of my teeth I’m on a two month visiting cycle to avoid new problems. Having to wait 5 months is endangering my oral health! If I lose teeth because of the delay I’ll not be forgiving the guilty parties anytime soon.

  52. Sven Larsson says:

    I don’t think the Tech Types see what is really going on here. They being Outsourced. They are now part of the Gig Economy. Better be on the constant lookout for that Gig at a lower wage. You can now be fired by Zoom Chat, or mass e-mail.

    Need workers – India, Taiwan, Japan, ASIA in general, is now free to swim the Tech Pool. Look – no Visa required.

    The stock market looks good, housing is going to no nothing but go up, the recovery will be quick, ad nauseum…

    Ya’ all have been duped. They ARE cleaning house!

    • 91B20 1stCav (AUS) says:

      Sven-I believe an alternative term is: “…race to the bottom…”.

      Off to more mowing in advance of the coming heatstorm, and a better day to all-

    • Greg Hamilton says:

      Sven,
      The only thing you left out is population reduction.

  53. Phillip L says:

    So which are the banks most highly exposed to the real estate market in SoCal? What happens to them?

  54. RedRaider says:

    The idea of moving to another state to avoid a state with high taxes is somewhat suspect in my opinion. Consider what happened in Depression/WWII. Imagine you lived in NYC. When Pearl Harbor happened you dropped what you were doing and enlisted. NYC was already suffering 25% tax base decline due to depression. When people enlisted that expanded the decline. And no resolution possible until the war ended an their citizens returned. But a funny thing happened. The former citizens of NYC didn’t return to NYC. Some returned to peripheral areas of NYC we now call suburbia and exurbia. Some returned to upper NY state. Some daring souls even moved to areas in the American west like, let’s say, Golden, Colorado. All these people were outside the grasp of NYC taxing authority. Or so they thought. But through the magic of state and federal revenue sharing programs they got tapped again for NYC taxes.

    My mind naturally gravitated towards such thoughts in the Covid-19 world when I heard state governments demanding to be made whole by the American taxpayer even for non covid-19 related things. I don’t know what’s gong to happen but I think the polarization just got ratcheted up another notch of two.

  55. Shawn says:

    A culture of working from home in the tech world is nothing new. Sun Microsystems was doing this back in the aughts. With Facebook’s announcement that it will move to WFH and recruit all over the country, I guess it is Back to the Future. Other tech companies will follow, the value of office space, rentals and property will decline as you mentioned above.

  56. Todd says:

    Wolf:

    Can you tell me where to look up the same information for Houston, given the triple whammy here (Covid, oil, world’s largest health care center)?

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