Return-to-office orders look like a way for rich, work-obsessed CEOs to grab power back from employees::White-collar workers temporarily enjoyed unprecedented power during the pandemic to decide where and how they worked.
Return-to-office orders look like a way for rich, work-obsessed CEOs to grab power back from employees::White-collar workers temporarily enjoyed unprecedented power during the pandemic to decide where and how they worked.
Seems like the commercial real estate collapse has a lot to do with it too.
Eh, that may play a role for the big firms, but most of the small to mid sized businesses just lease their real estate. They’d realistically come out ahead by downsizing their offices.
I think what we are seeing is management really struggling to adapt and find reliable metrics for performance management as well as to promote employee retention and engagement without the social bonds of an office culture.
How so?
Super simplified version: the office buildings are losing value due to low occupation. Owners of those buildings lose money if the value goes down. Those owners do not want that.
And those owners can almost always find a compassionate ear from their loyal rich CEOs who don’t want to upset a however many years relationship of “I’ll scratch your back if you scratch mine” kinda thing.
Highly plausible deduction.
I see a lot of people say this but I haven’t seen real data that this is actually a trend. Though I live in Australia, maybe it’s different elsewhere.
If I’m understanding correctly, you’re saying you don’t see the trend of office real estate losing value? This might be a problem mostly for the US, but Manhattan real estate is definitely struggling. There’s also the company WeWork, which is basically AirBnB for office spaces, which is now on the brink of collapse.. WeWork had bought up so much office space for renting out that US banks are legit concerned over what happens if the business fails.
Thanks for the sources, yes looks like the US commercial real estate market is in trouble. Here in Australia it’s not that bad, though there are predictions that there may be issues due to economic reasons, with WFH playing a small part.
My understanding is as follows: A lot of corporate debt is backed by the real estate. For example, McDonald’s food operations are far less valuable than its real estate portfolio. If that property is now worthless because no one wants it and it’s unoccupied, banks now have assets worth less than what’s owed on them. That in turn means when the loan term ends, banks can’t just re-finance the debt, because the collateral that secured the loan in the first place isn’t worth what the debt is. That means big problems for companies who now need those loans as a source of cash to pay off the old loans. They now have to scrape up actual cash to pay, leading to more austerity. Because corps can’t pay the banks, the banks lose out on revenue, which means they have to tighten their belts, and so on and so on in a self-reinforcing spiral. If the corps default, the banks can seize the assets, but again, they’re worthless, so it’s a one-two punch.
It’s a giant shell game, and from what I’ve read economists are afraid a 2008-style crash may be in the works due to the cycle of debt above.
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A lot of the foreign currency was brought back under the trump years when companies were given a one time reduction in taxes to repatriot their cash. From 35% to 15% tax rate.
https://www.latimes.com/business/story/2019-12-19/companies-repatriate-1-trillion-since-tax-overhaul
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