I have posted this on Reddit (askeconomics) a while back but got no good replies. Copying it here because I don’t want to send traffic to Reddit.
What do you think?
I see a big push to take employees back to the office. I personally don’t mind either working remote or in the office, but I think big companies tend to think rationally in terms of cost/benefit and I haven’t seen a convincing explanation yet of why they are so keen to have everyone back.
If remote work was just as productive as in-person, a remote-only company could use it to be more efficient than their work-in-office competitors, so I assume there’s no conclusive evidence that this is the case. But I haven’t seen conclusive evidence of the contrary either, and I think employers would have good reason to trumpet any findings at least internally to their employees (“we’ve seen KPI so-and-so drop with everyone working from home” or “project X was severely delayed by lack of in-person coordination” wouldn’t make everyone happy to return in presence, but at least it would make a good argument for a manager to explain to their team)
Instead, all I keep hearing is inspirational wish-wash like “we value the power of working together”. Which is fine, but why are we valuing it more than the cost of office space?
On the side of employees, I often see arguments like “these companies made a big investment in offices and now they don’t want to look stupid by leaving them empty”. But all these large companies have spent billions to acquire smaller companies/products and dropped them without a second thought. I can’t believe the same companies would now be so sentimentally attached to office buildings if it made any economic sense to close them.
There are a few reasons.
2,3,4 sure but I don’t think 1 is plausible
1 is plausible.
Remember the super rich have bank friends.
Ever heard of “If you owe the bank $100 it’s your problem. If you owe them $1mil it’s their problem”
A giant building that’s empty that nobody pays rent on is a huge bill to settle somehow with the bank.
1 is not plausible, you can’t believe that all rich companies are money hungry capitalists that only care about their bottom line, then also say that they are going to spend more money they are greedily hoarding to help out their rich friends. That’s the only way that 1 would be plausible, so you have to have that dichotomy of a thought process to believe it.
Go high up enough and everything is in the same hands. Boards of directors are full of people that own business real estate. Even if they might not own that one building, they have vested interested in that market going up, and that means RTO. People still need a house so it’s not like it devalues the personal housing market either.
Oh sweet summer child.
In an ideal world you’d be correct and I want you to be correct. But there are a lot of people who want to live on both sides of the grass here. They want to say they have no money to pay anybody to certain people and have all the money at the same time.
So, maybe not all, but definitely a lot. There is a reason why economies tank. Wall Street has no morals. Recessions, depressions, inflation, and the like happen. It’s because people get greedy and corrupt.
1 is not just plausible, it’s happening all the time.
It’s not necessarily about being a money hungry capitalist though – it’s not even necessarily about rich friends. Many of these buildings are owned/leased by the company. Problem is, that land value is on a company’s books as an asset. People don’t RTO, the value of that asset drops, company has to post a loss, stock value plummets as shitty traders take advantage of the numbers to turn a profit. In a good number of cases, it’s survival.