There is no recovery for office space. The number of people going to the office has declined over the past four weeks.
By Wolf Richter for WOLF STREET.
The explosion on the scene of work-from-home in reaction to the Pandemic, as measured by people suddenly not entering office buildings, can be tracked by collecting data from access control systems for offices, such as keycards, key fobs, and access apps. And that’s what Kastle Systems – which provides these types of access systems for 3,600 buildings and 41,000 businesses in 47 states – has done.
After the collapse in office occupancy – as people stopped going to the office in March and early April – there was only a slight recovery through mid-June. And then it all came unglued again, and in cities now grappling with a renewed outbreak, such as Dallas, Houston, and Los Angeles, a renewed decline from already abysmally low levels in office occupancy has set in.
From early March through early April, the number of people going to the office collapsed on average by -85%, according to the office access data tracked by Kastle. This ranged from around -70% in Dallas and Houston, to -80% in Philadelphia, to -90% in San Francisco and Chicago, and to a near-total -95% in New York City.
The return to the office, already stunningly slow, has reversed.
Work-from-home is now proving resilient, as is the virus. Since the low point of office occupancy in the beginning of April, there has only been a small rise in people returning to the office. But in late June, progress stalled. And in July, the occupancy rates started regressing in three of the 10 metros tracked by the index: Dallas, Houston, and Los Angeles.
The chart by Kastle Systems shows daily office occupancy in terms of how often access systems were used, as a percentage of the pre-Pandemic era. The percentage for Dallas of 32.2% by July 8 (green line at the top) means that office occupancy was still down by 67.8% compared to the pre-Pandemic era; and New York’s rate of 10.1% (blue line at the bottom) means that office use is still down by 89.9% from the pre-Pandemic era.
The average of the 10 metros (red line) has dropped slightly over the past four weeks, from 22.7% in the week of June 17, to 21.6% in the week through July 8. I added the black horizontal line for reference.
The metro names on the right can be hard to read – so here they are from the top down: Dallas, Los Angeles, Houston, Austin, Philadelphia, Washington D.C., Chicago, San Jose, San Francisco, and New York (click on chart to enlarge):
The chart above shows data per business day. On a per-week basis, which irons out some of the day-to-day fluctuations, the top 10 metros in the data are aligned similarly for the week through July 8. The average of the 10 metros, according to Kastle, shows office occupancy running at 21.6% of the pre-Covid era, down from 22.7% four weeks ago. The current rate represents a decline of 78.4% from the pre-Pandemic era.
In its prior report a week ago, Kastle expressed its disappointment with the absence of progress in getting people back to the office:
“We originally thought late May would bring a meaningful return to the office, as occupancy started to tick up in Austin, Houston, Los Angeles and Miami, but then saw a brief decline as protests spread across the country and offices remain closed. Cities like Chicago and Philadelphia are now picking up, though Western and Southwestern cities continue to lead the nation in terms of reopening.”
This assessment — “Western and Southwestern cities continue to lead the nation in terms of reopening” — has now been obviated by events as Houston, Dallas, and Los Angeles are now grappling with renewed outbreaks. And office occupancy is dropping.
Work from home gets entrenched as an option.
Some of the factors that keep people out of their offices may be temporary, but there are an increasing number of reports that some of them are becoming permanent – that for at least part of the companies, work-from-home or work-from-anywhere is becoming a permanent feature and even a selling point for new hires, and a way to cut costs for the company.
Numerous well-known tech companies have made announcements to that effect, including Facebook, Twitter, Okta, and Box. Google, which has committed to huge office leases around the world, has switched to work-from-home during the Pandemic, but has remained ambivalent about using that strategy in the future. Apple, which completed its palace that needs to be occupied, and with its penchant for secrecy, will likely buck the trend of work-from-home for many of its jobs during the new normal times.
Many smaller companies have quietly and successfully switched at least part of their office workers to work-from-anywhere and are operating under a remote-first policy.
Credit Karma – now being acquired by Intuit – is, or rather was, headquartered in San Francisco in an office building where it occupies six floors. But in April 2019, it signed a lease for 106,000 square feet of office space in Oakland, and was going to move most of its employees over to the new site, starting in 2020, with some of the people continuing to work in its San Francisco office.
But once the Pandemic hit, Credit Karma shut its San Francisco office permanently, and consolidated everything in Oakland. The company is now trying to sublease its space in San Francisco until the lease expires. And its employees who were supposed to be able to continue going to the San Francisco office will likely be switched to work-from-home even after the Pandemic.
And the longer the Pandemic drags out, the more people and companies are forced to fine-tune their work-from-home methods, which will make work-from-home – or rather work-from-anywhere – ever more entrenched at least as an option, if not a primary choice for many. And the entire office segment of the commercial real estate sector is in for some major upheaval.
Shrinkage in survival mode instead of V-shaped recovery – that’s what airlines face. “It will be more than two years before we see a sustainable recovery”: Delta CEO. Read… Delta’s Passenger Revenue -94%. How it Plans to Stay Alive till “Demand Returns.” Confirms United’s Warning About Newly Waning Demand
Enjoy reading WOLF STREET and want to support it? You can donate. I appreciate it immensely. Click on the beer and iced-tea mug to find out how:
Would you like to be notified via email when WOLF STREET publishes a new article? Sign up here.
The Home Office can be anywhere, in Cool And Hip Manhattan or Bay Area, or Bangalore or a barrio in the Philippines that has a DSL line.
I can’t even begin to describe the amount of business done over lunch, dinner or drinks.
Or at 11 pm on a Sunday night, working with your customer to get a show stopper problem fixed by Monday morning.
Business, big and small, runs on relationships and trust.
You don’t build that in a zoom call.
In my experience, and in may situations, reputation for delivering is winning out over relationships developed in person.
You also don’t get as much experience as you gain working closely with the best people in your field. Sometimes just watching the best in action is a career changing activity. You don’t get that from slack or zoom.
For “office workers” the proximity to co-workers makes things significantly more efficient- going down the hall, talking in the break room.
For manufacturing/physical goods economy- it’s even bigger.
That’s why it’s so important to have manufacturing in your home country for anything that is related to “national security” (which is a lot). A lot of knowledge is empirical/learned by experience/not “known via theory”.
What will probably happen is the way my life in the military ran. Whenever I went out to the field, they always paired me up with a junior to train them in how I did things, which didn’t bear much resemblance to the way they were taught in school. People can pair up, or even have perhaps a small group, at a home or local rental space.
^ Above is all true.
But, working from home is a prelude to massive layoffs resulting from automaton. Also, alot of work will instead be given to gig workers. Working from home is the first step. Finally, the older generations are going to experience the joys, I.e. “wonderful pay”, no benefits, but, some sense of freedom, the gig life has to offer. Also, alot of office work will be outsourced.
Even if, it’s highly automated bringing back manufacturing will keep us economy alive.
America’s government spends more per capita on healthcare than any other country, despite, not covering everyone. If America did cover everyone (would require a complete overhaul of healthcare system, not just Medicare for all), and the number of hours each people worked in a year was forced down, and actual competition existed in the marketplace, America could come out ahead.
National healthcare is a big must, because, the current system is collapsing, and going forward alot less employers will provide healthcare coverage.
This is ideal for younger workers, but, good for economy overall.
Most companies, should only be allowed to pay you with money and perks. No benefits.
It’s certainly difficult to do manufacturing of physical goods like cars etc. from home.
“Most companies, should only be allowed to pay you with money and perks. No benefits.”
Why stop at just setting pay? Lets set up govt committees to determine who gets hired, what work gets done, how the work gets done, what people do for fun, how they travel, what they wear and who they are friends with- lets eliminate all decisionmaking because people make bad decisions.
Thomas you can be in charge of everything since you already know how to compensate employees.
Happy Man
You forgot about having Thomas pick the beer we drink and the movies we watch. ;-)
nick kelly,
Obviously, that will require people actually there. Even if most jobs don’t come back, bringing back manufacturing is important, because, it keeps money in America. Also, it prevents other countries from having leverage over America. It also prevents other countries from stealing your factories and IP.
happy_man,
The current healthcare system is doomed to fail and is costing businesses a fortune. It’s better to fix something before it fails catastrophically.
As for preventing benefits, this is needed, because, nearly all current pension systems are guaranteed to fail, the sooner the plug is pulled the better. Most benefits that companies pay are a subtle way to screw over younger workers. Paying just cash is better for workers, as it will give you more control over where your money goes.
Perks are fine I.e. work for the cable company, get free cable.
I’m sure all the above will make running a business easier, not harder.
@Thomas
I’ll tell you what to do with the US Health care system- just avoid it and stop feeding it.
Did you know if you need medicine you can travel to many other countries and just buy almost anything without a prescription? No you really don’t have to pay one of the US nannies who call themselves doctors $250 for a 7 minute appt that involves you waiting in their front room and back room for an hour and a half for a stupid prescription for a drug you already knew you needed. And you don’t have to pay $1500 a month for “insurance” that gives you the privilege of paying a US physician $250 for an appointment for that stupid prescription.
And did you know if you are sick you can usually figure out a lot of the problem yourself on this thing called the internet? And if you develop healthy habits you can avoid most health problems anyway?
And as a matter of fact, if you stop giving your hard earned (or govt bequeathed cash) to the US health care system, you will discover you could spend the same amount of cash for an endless travel budget! How cool is that!
And in the rare cases when you do get stuck going to a US hospital or physician, you can bargain with them mercilessly to lower their prices and they will. Make it very clear you are looking for a 95% discount or they will have to hire a law firm to fight your lawyer for every penny. And demand to see time studies justifying their exorbitant rates on every line on their bills. “why did you charge $75 to deliver a tray of food to my room?” And tell them you are publishing every thing they send you on social media. Ask them really hard questions like why they bill their physician’s time at $1000-$2500 per hour and how they can expect you to pay for that? I guarantee if you are tough they will fold and slash your account to a reasonable amount. Otherwise they can go to the end of the line and wait for you to pay off your gambling debt from 18 years ago.
Now that we have established that the average jane and joe is perfectly able to handle their own health issues without you being a busybody and imposing your rules and solutions on others, I encourage you stay away from govt unless you are laying off govt workers, slashing spending by 95%, closing programs or eliminating regulations and taxes? I am so sick of govt “solutions”.
Goodbye NYC. Never been to a place that deserved it’s demise more than you.
I would not bet on it. Such big social change never go as expected. Their second order effects overwhelm their first order effects. My expectation is that every American will need to live within 200 miles of the ten largest cities to get a job and that everything else will slowly die.
Mall retail in NY will be decimated but will be gone in Little Rock.
You can be anywhere for your normal office job but need to go to the “office” (read rented wework space) for a few days a year for face to face work. You can do that if the office is in NY and you live in LA. Just take a plane, but doing this from Little Rock is to much hassle as there are no flights.
Then there is 5G which will officise a lot of job. Think of felling a tree, driving a combine harvester or driving a dump truck in an open pit mine. All those jobs will go from onsite to office.
“My expectation is that every American will need to live within 200 miles of the ten largest cities to get a job and that everything else will slowly die.”
Nope. Some of us grow food and it ain’t done in the ‘burbs.
Sure. And when that combine harvester or backhoe breaks down I’ll just log onto Zoom and magically replace the broken parts.
The driver phones a mechanic who repairs the combine harvester. that is how the more difficult things are done. Remote controlled farming also have the advantage that you could do it with more but smaller and cheaper machines. Instead of 1 100 foot machine you do it with 20 5 foot machines and if 1 breaks you do it with 19 5 foot machines. Maybe you even have a spare
And another thing, if you’re wfh does your home office become a physical extension of your employer? If so, do you need general liability insurance to cover risk? Asking for a friend…
You also have interesting questions for the taxman, as well, when it comes to deductions.
Interesting. The IRS doesn’t like home office deductions. I wonder how happy they will be with the massive increase in 2020 itemized deductions in 2021.
NYC, capital of the world.
Mensa Graham…..just bitter.
Nope.
Since SF took over the “Most Human Feces on the Street” title, NYC lost its *last* claim to world preeminence.
Now it is just an insanely overpriced Thunderdome.
And the “Abyss” craters deeper and deeper with more hidden traps……
re: “… or Bangalore or a barrio in the Philippines that has a DSL line …”
Apparently, you’ve never actually used DSL.
G.Fast can do gigabit over DSL. Too bad it’s only for like 300ft.
Im a Federal employee and Ive only been to the office twice since March. My group has been encouraging us to telework as much as possible and there are no plans to change that stance.
Same here (Belgium). I haven’t been in my office since the beginning of COVID-19. Will be working at home at least until the end of 2020, because those who do not need to be physically present to do their job are simply banned from their offices for now and required to work full time from home. I hook up my lap top to my desk top at work an I’m good to go. Saves me two hours a day in commuting time too.
I’ve been wondering what’s going on with that Fabulous Salesforce Tower in SF.
By now it must be someone’s Edifice Complex.
Is it mostly empty? Are the still tenants paying market rents? Who is the owner? How’s their balance sheet or cash flow affected by the present situation.
B.A.C.A.H.,
I’ll just take a crack at one of your questions: Boston Properties owns it.
Salesforce just put its name on it (naming rights) and leases a lot of space in it. Before, it was called the Transbay Tower.
Did the “Saleforce Transbay Terminal”, for commuter bus lines from the east bay, ever open after the cracked girder?
Another San Francisco political insider connected, cost overrun disaster.
WFH will be huge. It’s not without its problems, but the firms that can make it work will have an enormous advantage in terms of reduced overheads, and wider access to talent at a lower cost. The mega city thing was going pear shaped anyway with basically a small bunch of winners making out like bandits and everyone else stuck in a rentier farm.
It will also be hugely deflationary at a time when demand side inflation pressures have evaporated. The fed will have to print like crazy to keep asset prices up as the most lucrative rentier streams dry up.
Yes. WHAT the F#CKING HELL!!, will indeed be the cry across the Realm! I see lots of multi-story ‘hanging gardens’ opening up for ‘repurposing’ as we collectively stair-step down to a new lower accedence – with many a ‘vester swingin forth!
My point is that this global bio-pyscho kerfuffle is going to screw with our human ‘fragilities’ .. real, and/or percieved .. for quite some time. Time to recess one’s priorities for survival, no? If this virus has no containment .. and affects people variously then we, collectively, are in utter new territory – IT’S territory!
I mean … Think about it ..we humans.. could be This Eon’s waning dinosaurs.
But WE like to think of us as GODS on the highest biological pedestal!
Filling high-rise office buildings may not be possible for a while because the old way of transporting large volumes of people into and out of them are no longer practical. Watch this clip from the movie Wall Street, and try to imagine moving the same number of employees into and out of Manhattan offices with social distancing:
This will require a change in much of the expensive specialty software business. The business model for CAD , CAM, circuit design , etc is for very expensive charges per seat. In my old company our multi-function CAM software was so expensive we had to share the work stations over two shifts, to be cost effective. These software licenses must become cost effective over more users, and the company needs to find a way to bring employees home computers up to the changing standards needed to run high end software.
Software licensing has many levels of insanity, including the per core/socket/seat pricing.
I think its getting better though. Not just from more open source, but from mass market, sanely priced software getting “good enough” for pro use, like Unreal replacing some CGI.
Most modern CAD/CAM/SCM works off a pool of floating licenses from a central license server. Doesn’t matter where/what the workstation is or where that client is located.
Yowzers! Fascinating data. With a probable second wave on the horizon (or simply a contining first wave) fundamental change in how Americans work — better WHERE they work — will resonate for a long while in local economies.
Pain ahead…
It’s a trend that has the potential of repopulating a lot of small towns that have been shrinking for decades. If you can work from anywhere why not choose a quite, pleasant and (relatively) safe small town environment to raise a family in.
I would say more the outer burbs.
You can still get to big city medical facilities or airports within an hour…but far enough away from the insanity and ever increasing taxes to feel comfortably safe.
The rapidly increasing taxes will arrive shortly. :-(
Destination Iowa!
I’m from Iowa and moved to a bigger city as soon as I could. The cities have a ton of things to offer and the culture is radically different. I know people who moved from the Bay Area to my city of 6 million or so and they felt it’s really open, small, well priced, and offers many of the amenities of the Bay Area. Iowa (Des Moines specifically) is unbelievably small. Des Moines is literally the size of my suburb. Barcades in the DM? 2. Barcades in my city now? Like 5. Nightlife has downtown over a single block. There’s one hip hop club, and 1 dance club with a dance floor in it, a country bar with dance floor, and a handful of cocktail bars. That’s it. College life has like 3 bars and it’s all house parties and because it’s all ag focused it’s 65% men and it’s not a party school like Berkeley. Sure it’s for some people but I can see them moving from large cities to medium sized cities.
Berkeley a party school? You could have fooled me.
Live in Iowa. Quad Cities. One of America’s best kept secrets.
Iowa, the only place you can get a Made-Rite. Then there’s… Oh well, after all it is Iowa.
This could benefit small college towns — places with small town advantages and a culture palatable to urbanites looking to downshift — provided they have solid internet access and decent transport links.
College towns might have the same problems as urban centers, replacing WFH with online classes. Last I heard the small university near my location is online for the fall semester. Probably entire year.
Change is in the wind.
Projections are that most private colleges without sizable endowments will not exist in 10 years.
What about the really important stuff, football? Funny how the plandemic affects somethings but not others.
If the college in the college town survives. A lot of colleges will get seriously hurt by Covid and the absence of foreign students. And there is also the possibility that the ivy league will lower its price and massively increase its enrollment while it is only virtual open. And college towns have decent transport links because they are college towns. Those links will be go with a college
A substantial # of foreign students are from China.
Given the continued tensions over trade , Hong Kong, militarization of disputed islands in the South China Sea and Taiwan , there is a good chance that Chinese students will no longer be studying in the US in future years
The ivy league has been outsourcing themselves to foreign countries for years. Many can pick up and restart themselves in their foreign campuses. The asset stripping has been going on for a long long time while we fight over crumbs.
These days with the huge datasets in use across most all the disciplines, solid internet access for a college is near mandatory. Heck, even the humanities have been taking advantage of data science and machine learning.
As somebody from a small town, I know the answer:
The people who live there.
A lot of speculation going on.
Fly over country here. Our business…tied to construction…is swamped.
No speculation, just reality. The wuhan has exposed strengths & weakness
of were we live.
I was thinking about this the other day. A few issues are accessibility back to big cities (easy commute?) Quality internet access is missing from many of them, and when they try to do co-ops and stuff to put in FTTH owned by the municipal govt the local providers usually buy legislation that blocks progress. Lastly the conservative views might not jive so well with modern independent thinkers.
It would be cool. Really, if small towns started saying “Hey we have gigabit internet over fiber, good backhaul” and perhaps offered some of the commercial space to people looking to do cool things, you might have a resurgence?
I know someone that moved to a small town outside of Pittsburgh and was able to rent a large place on mainstreet dirt cheap. He runs a vintage computer museum with running IBM mainframes and stuff out of it (The LSSM.)
I wonder how far this might go. Parents work from home, kids go to school from home ( likely this fall), teachers teach from home, kids interact with friends on internet, do e-sports instead of regular sports, get food delivered instead of restaurant or shopping. Pretty soon no one needs nice clothes, cars, sports gear, car insurance, cell phones (use voip instead), grocery stores, restaurants etc, air travel, etc. Pretty soon a large portion of the economy will be of little use. We will have farmers, a few manufacturers and everyone else selling each other insurance and streaming exercise videos from home. Eventually no one will leave home as they will be too weak and pasty to go outside, beyond their security system. Then the real physical world will become the domain of the digital age highwaymen who will extract tolls from the “house people.”
The Machine Stops by E. M. Foster short story 1928, almost a century ago.
Brilliant, preternaturally prescient. Thanks J7915. Actually written in 1909 and anthologized in 1928.
Maybe watch Wall-E as well, for the joys of not going out of the house
Too weak and pasty to go outside….thanks for the laughs.
I guess civilization is over and it’s Mad Max Thunderdome time, huh?
I am afraid the office space reduction reflects the dissapearing of meaningful work.
Two years ago, anthropologist David Graeber claimed in his book that 50% of our work are “Bullshit jobs”.
Not that I am totally convinced by his theory, but there is certainly a part of “pretend working from home” in current situation.
So I am expecting a huge paradigm shift in coming years. Less real work, less purchasing power.
“We pretend to work and they pretend to pay us.”
And Bullshit businesses too. Lots of rich wives running boutiques and fluffy nonsense retail in the Bay Area.
The question becomes , is this a long term trend that will stay after the Covid-19 crisis.?If it is , does that not portend a sharp decline in demand for urban commercial real estate ? And the second derivative of less occupancy of urban commercial real estate is fewer workers living near this commercial urban real estate . This translates to less demand for residential real estate in these urban areas , along with lower rents and selling prices.
My boss has already informed our team that, as the quality of our work is keeping pace with that of the office environment, we will, at most, be in the office one day a week. My best guess is it’s saving me close on $500 a moth in expenses.
If this is a long-term trend, the shift will be huge, and it will change over time what cities look like, including functionalities such as communing infrastructure. I think some of this will eventually reverse, but even if 25% of it is permanent, that’s huge.
It’s becoming evident this is going to be a long term trend. You can find loads of “office” furniture, cubicles, etc, for sale, and even for free, on Craigslist. When they start making physical changes to the workplace there’s a directive and higher planning taking place.
I, for one, will be happy to never see the inside of a conference room again.
I think the infrastructure changes will be huge because of this. There is no end to the problem of slow connections right now. If and when have the office staff has to dial in via VPN, and we have to use some of the older software to do the day to day work, it’s a real pain.
There is no doubt that a degree of structural change will be needed moving forward, 5G, more fiber networks are almost a must to make this work, same is true for data centers and such.
A home office running three video conference at once, and then expanding that out to half the block is a real drain on bandwidth. I can see Comcast licking their chops right now.
Good timing for Starlink eh?
And they recently built out Caltrans, going from SF to, what, all the way to Gilroy? It will be interesting to watch how project goes.
With my family (not all the children had arrived yet), I left Arlington Virginia for Warrenton, in response to the Cuban missile crisis. The odyssey progressed, eventually to the mountains of Appalachia.
Now, the “25% change” or whatever it turns out to be, will be as to another world.
And what does this bode for the numerous “work sharing” outfits, of which WeWork is only the most infamous?
The numbers of such deals in SF was enormous even beyond the multiple WeWork setups.
Former coworking space member here. Place I was a member of went out of business a year ago.
Biggest problem with coworking spaces? The turnover. If you don’t stay on top of it, you’ll be battling a vacancy rate that will only increase.
The vacancy rate problem is probably going to be the death knell for WeWork in particular and coworking in general.
Wework expects to be profitable next year according to a FT article.
If your workers are WFH you only need an office sometimes so that would be a great opportunity for Wework to supply that infrequently used office
Your comment sounds similar to Uber/Lyft’s “part time driver” nonsense.
Which is to say: it does exist but is not the actual basis for that business model.
The 2nd wave will hit us this fall/winter!
Unless the usa gets a vaccine it will be a permanent wave.
When the weather becomes colder , people are inside for longer periods with exposure to airborne particles.Then we have the seasonal flu. Combine these factors with a possible mutating 2nd wave Covid-19 and we have a situation right out of the movies.
Just a reminder , the 2nd wave of the 1918 influenza was much more deadly than the first
In the South it is the reverse – summer is too hot. Everyone goes inside to air conditioning. Probably the current wave of infections in the South reflects that. So Northern states get second round this winter as southern states see cases wane. Though, if office space doesn’t open up and schools go virtual ( and mask-wearing actually takes off) the second wave could be less intense. ( though I’m not counting on it.)
When Goldman, JP Morgan and RobinHood traders are all making money over fists trading from home, who needs an office?
I wonder how many will have the option to either return to the office under draconian “new normal” conditions, or remain working at home–and choose the latter. Actually, I wonder how many people will have any kind of job at all a year from now? Perhaps the desperate will eagerly don their muzzles (oops, I mean masks), regularly slather themselves and their cubical in toxic chemical sanitizers, and stay as far away from coworkers as possible–lest the office snitches report them for non-compliance with social distancing regulations. On the other hand, once they roll out the mandatory vaccinations, none of that will probably be necessary, anyway. I’m sure everything will work out just fine…
One way or another it will all end in November.
Petunia- I don’t know what is going to happen in November. I keep thinking everybody is still upset, willing to threaten, demonstrate, etc. (or maybe just call names on Twitter?).
This virus isn’t as bad as the Spanish flu. We have so much wealth, etc., that we can react as we are. It’s understandable as societies get more wealth, but the conclusion is hard to escape.
Everybody is a snowflake.
I would like to see the epithet “everybody” used more discriminately.
The real question you should be asking is “We have so much wealth, why are we reacting so poorly to this?”
Or is 250,000 dead this year too low a number for people to care?
The death rate from the Spanish Flu was about 800% higher than Covid19, if I am doing my math right.
It was much, much worse than this, and was barely addressed by the federal govt. It was addressed a bit by local govts.
I think there should be a government response, but the public needs some better context; not 100% fear all the time.
I had to re-read your comment a couple times, as I wondered if you mean to type “it will all BEGIN in November.” For the past four months we have been in a suspended state of anxiety, but gravity is about to kick in. Jobs, the economy and civil society s we have known them are toast. The election will be the catalyst that ignites this whole absurd tinderbox. I sure hope I am wrong, but that’s how I see it.
Guns and ammo sales would be the leading indicator that you are correct.
“I sure hope I (You) are wrong too, S, but at this point I am certainly not counting on it.
OTOH, IMO all the aspects of society you list as being toast may indeed be a little warmer than bread right out of the box/fridge for a while, for sure,,, but they, along with most of the usual suspects and suspicions will be right back where they were months ago, sooner and later…
To be clear, that includes the hedgies, wedgies, and PE folks continuing their climb to ascendency over the entire economy, SM, RE mkt, etc.
Unless and until WE the PEEDONs stand up and stay up to insist/make some serious changes to our out of date political system, and put USA back on the path/program of ”power to the people” that our founders envisioned and tried to empower, in spite of, or perhaps because of their clear vision of the alternatives.
And to tom, yes, and they are spiking at record levels recently.
Apple Park was full when it opened.
Even at $6 billion, the expense is a rounding error for Apple. They are feeling no financial pressure to pack people into that campus.
Great article thanks for sharing the metrics with us. Kinda neutral on WFH, on the one hand less commute, middle management can go jump, on the other hand workers have to subsidise the employer the office rent
How many WFH know how grow/process at least some of their own food .. besides putting in a panic-induced plot .. assuming they have the space .. without any forethought on the actual planning, planting, and maintenance thereof?? The reason that I bring this up, is that I think that there will continue to be food issues going foward, with supply chain disruptions .. as well as problems stemming from cvid infections in the production line. We’re already seeing some of that now in real time. I don’t think the public has a clue as to how bad things could get. Coding and conferencing alone, from the little house on the not-prairie won’t cut it, in my book.
Food Shortages – It’s what’s (not) for dinner!
How many farmers can produce a crop without genetically altered seeds, fertilizer, and pesticides?
I’m aware of one of the Silicon Valley FAANG employers recommending employees refrain from moving. Lots of empty office space that needs employee behinds in those chairs.
While REIT’s might not fair so well from WFH, I can’t help but think a renewed focus on the environments surrounding the home could result in cities and bedroom communities which are more livable, walkable, and bike friendly with an increase in parks and other recreation opportunities.
This may be a trend but WFH (especially as a company) is no where near as efficient as being staffed up in an office. Especially for maintaining physical documents, etc. And what happens during rolling blackouts?
Whi pays for the home office expenses? When do you clock in and out? What if the work/life balance goes to heck?
During the crisis, cloud providers have proven to be incredibly robust. Backbone ISPs have handled the traffic surge without a hitch. Modern PCs and mobile devices can run productivity/communication apps a workstation couldn’t handle just a couple of years back. Software itself has become more accessible.
I guess my point is that, had COVID happened at a different time, mass work-from-home would’ve been impossible, assuming the internet didn’t buckle, and that technological security required a global, coordinated effort and breakthroughs that put the Apollo program to shame. So, in spite of the incoming office space apocalypse, we barely dodged far worse alternatives.
Try working from home with a three year old.
Don’t worry, the divorce will fix that! And there will be a lot of divorces over WFH.
Trust me, working from home with twin two year olds is being done. Folks find a way.
Great points Wolf and by commenters too. A few thoughts:
1. Employers can’t force anyone to come back to work. Doing that will only invite lawsuits should anything go wrong and plenty can go wrong with this virus being out there. I don’t think the virus is going away anytime soon. I actually think there’s a good chance it might stay with us for a long time to come, along with the other viruses that we live with.
2. Some of the WFH shift is definitely going to be permanent. Some companies have been operating very well with this model and even excelling. As long as the long-term psychological well-being of employees and their productivity isn’t worse than pre-Covid, there’s no good reason for employers to want to change that. If anything, they save a whole lot by getting rid of offices as much as they can and only keeping a fraction of office space for meet-ups and other essential activities.
3. Great point by EJ on technological advancement and its part in making WFH possible as a viable alternative. Being in tech, I can 100% attest to it. This makes you wonder why all the fancy business travel in the first place? It’s incredibly wasteful any way you slice it. Sure, it keeps entire industries going and creates jobs but if the function can be done over a Zoom meeting, why continue to destroy the planet with all this flying, driving, etc.? Having been interacting remotely with vendors and continuing to buy stuff from them throughout the last few months, it only affirms this reality for me. Yes, there is some value in face-to-face meetings with clients but until you’re forced to carry the same function out in a different way, you don’t realize that it’s possible or even better with the other method. Covid just forced this realization upon many of us, in many different industries and roles.
Good comment deer, here’s a couple more early thoughts/experiences:
Consider 6-G,,, with just some of the advances mentioned yesterday such as likely 1GigaByteS speeds available, with that coming every where, through starlink and such, it would seem possible for everyone to work anywhere, including the machinist operating a lathe, etc., and robots could eventually if not immediately do most of the other work, including ”set up” of the other machines.
Working from home jan17 to may19 was boring most of the time, partly due to no personal face time with great coworkers, though we did have some good conversations at times,,, also partly due to the fact that with no interruptions i was finishing ”piecework” much faster.
Costs were lower than commuting, even after considering utilities, extra bandwidth, computer expense, etc., all deductions on Schedule C.
After 50+ years in my industry, IMHO some ”balanced” program of in person and WFH will work best for most people in most industries,,, with some, clearly needing to be physically present due to intangibles.
No doubt we as a species are at some ”singularity” the outcome of which will not be at all clear for a long time, at least a decade, possibly longer if this virus is just the beginning, as it appears to be right now.
Lawsuits? Mandatory arbitration has been the rule for many years now.
Wolf must be wrong. And here’s why.
WeWork said they would be cash flow positive next year. These geniuses can’t be wrong right? RIGHT?
These guys must be literally piss*** in their pants right now.
The right accountant with a vivid imagination can make any company profitable.
Companies will find out just as quick that 25% of its work force does nothing. One tearse short E-mail and you are done . It’s so easy to lord over some one unseen. There is no personal burden transmitted from a picture of Tiny Tim and Barffy the Retriever on your desk when Joe Bob the HR Hun clips your ass. 100 people in a conference room won’t say Jack. Put them on Twitter and they will tear each other’s throat out. We have a mean mean streak in us that stays tamped down when are face to face. This will be a god send for head shrinks. Business will boom.
Family law attorneys will be in great demand once the divorce filings start.
Companies will find out just as quick that 25% of its work force does nothing
So? Management needs bodies to manage (and as an expenses-buffer), HR needs bodies to harass with diversity training, IT needs bodies to provide with IT, the IRS needs bodies to tax …. and so on and so forth.
Nobody cares a lot about what people do or not, because, those bodies are simply there as a catalyst to speed up the extraction of value by the various stakeholders :)
– oh, and, most companies are way too thick to figure out who actually are “cash flow positive” and who are not, so, why take the risk of firing the lad or ladette that actually causes the business to run smoothly?
“brief decline as protests spread across the country”
Well! Now we know the market driver!?
While this might be the trend, there are still some companies hanging on to the idea of bringing people back as soon as possible. A friend of mine for a relatively large medical device company in orange county and despite rising CV19 rates in California, especially in LA and surrounding counties. They continue on with their integration plan for office folks. Manufacturing workers I understand since they have to be there and can’t do their job at home. However, bringing people back like folks in marketing, finance or corp support roles in times like this makes absolutely no sense and will only expose their people to unnecessary exposure since there’s still so much we don’t know about this virus such as transmission rate in re-circulated air office space.
This is where you can see stubbornness of company leadership vs doing the right thing by carrying on with remote work as much as possible. It’s funny they can tell you how much they care about their workers but action speaks louder than words and when CV19 is getting worse and yet they are telling employees integration plan is moving forward and they’re monitoring the trend, just kind of makes the whole thing rather tone deaf.
As my friend said, perhaps leadership is trying recoup sunk cost since they are spending some good money in expanding adjacent campus. I am sure last thing they want to do is to spend all kinds of money buying the building and land next door and have a building less than half full.
Yes, reading the papers real panic is setting in here in the UK too. Yet another thing these dimwits never thought about when they decided to close UK plc for months on end. Oh we will just hose them with taxpayer money for salaries, that ought to do it, right? Nothing else to think about, just salaries. Now the second order effects are surfacing including permanent work from home and all the cafes and lunch spots are cratering.
Peter Hitchens was right all along about the damage the UK lockdown would do.
Somebody should introduce MaxineWaters to Peter Hitchens. I can’t afford all the popcorn that will engender.
The British Isles are at risk of tipping over, what with Global Warming, so yeah, Maxine would have some interesting insights.
Incompetence being allowed, encouraged even (with people like Chris Grayling or Priti Patel as glorious examples of what it possible for a total moron), to reach dysfunctional levels on all executive levels is *the actual problem* in the UK.
They will be spinning the “Wheel of Blame” for the next 3-4 generations!
Check out my comment to PutinOnTheRitz. As always, America has you beat.
Keep in mind, It’s hard to draw universal conclusions how Covid will impact the world’s work place from U.S. experience, if only because the data that the U.S. and it’s capitalist/corporate model has been the undisputed biggest failure world wide among all nations, while the mixed economy and semi socialist nations have wiped the U.S. off the deck in terms of effective performance in containing and treating Covid.
So, just be aware that the U.S. is undisputed world’s worst performer against Covid.
It would best to look to other nations for a solution, as they have proven better than we.
IMO you are ”generalizing on the basis of insufficient data” T.
Still WAAAAYYY too early in the development of this virus world wide to know if USA or anyone else is or has been ”worst performer.”
From what I am reading from many sources, mostly qualified epidemiologists from what I can tell — not always easy to see — everyone is going to get this virus sooner and later,,, everyone. There also seem to be some rational and reasonable folks who consider the possibility of this virus event being the result of either a human error/mistake or deliberate,,, time will tell.
So, while USA guv mint employees, elected and appointed that first of all should have been ready for this virus after clear warning for decades, and then should have been able to put together some sort of cohesive plan to deal with it nationally, both clearly lacking, indicate that the sadness should be focused on our dysfunctional political system, not the economic system.
There was a plan. The group responsible for implementing it were fired in 2017.
The truth about the virus has already been revealed, and certain solutions either deny or obfuscate the facts. This is novel, there is no herd immunity. The most susceptible die first, and later the healthy. The only clear solution is an unproven DNA vaccine. The death rate is proven to be 5%, but if the herd is already healthy perhaps less. The CDC is a bureaucracy whose priority is hospitals. Should the hospital system fail they are a useless entity. Fauci should resign, his efficacy has been compromised, and his position was never one in which he could make much of a difference. He is now a political tool to shift blame. WHO has tried to stay out of the politics. Now CDC data is being shifted to HHS, people will be sent home to die. The dead are harder to count that way.
There’s plenty of data on covid. The medical coders are busy spreading it, for the money of course. Welcome to healthcare in America.
P, in USA it is NOT really ”healthcare”,,, it is medical services delivery system, and I totally agree it is berry berry bad here, even for us who are on the socialist systems, or perhaps even worse for us…
While many folks don’t know that there actually is an almost complete socialized medical services system here, it does exist in both the form of ”walk in free clinics” in most counties, all of the many counties in FL, CA, OR, TN, and AL that I have lived in when I was poor, and now of age, national and state ”elder care ” systems, and VA for those of us who have served. BUT, you will have to wait!
As in England, if you want the best and brightest and quickest, you will have to pay more,,,
BTW, please expedite the meet b/t the characters you reference earlier,,, though I can’t listen, I would really enjoy watching!
While office space leasing is down, warehouse space is in demand.
I started my small business from home in 2003 – outsourced book-keeping/consulting – now 8 of us all working from home across the US. I’ve never even met 2 of my people face-to-face or on video, likewise several of my clients. So far so good.
I certainly agree it won’t work for everyone or every company, but …… it does work and no divorces yet.
The Trend will be work from home until somebody uber cool in about 9 years has this “great new idea” ….
“Hey, what if like the old days, we actually LEAVE home and go work TOGETHER in a COMMON SPACE and do wild things like talk face to face IN PERSON.”
A whole new Trend will start, commercial space will make a come back, the media will eat it up. WHAT A NEW CONCEPT GOING OLD SKOOL AGAIN.
What a world.
My best guess is they’ll find a way to reduce the impacts of COVID, given all the smart people working on it. People will have the opportunity in 2021 to revert to old ways of doing things. Most people will do that because humans are social. It was said that 25% might decide to work from home, with support of employers. That seems a little high to me, but it’s likely in the ballpark.
The future scenarios involving drastic transformation are fun to think about, but they won’t happen in our lifetime. Change happens gradually over multiple decades.
Bobber, as delightful and social as my coworkers are, I doubt that I would want to return to losing 90 minutes of my waking day piloting my vehicle 5 or 6 times a week. And that’s without considering fuel, insurance and depreciation.