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.
They spent millions building a facility or are locked into 5/10 year leases. I've also heard it's because cities are dying, no one in offices to eat 'down the street' at the food shops, people don't stop at the bar on the way home, no impulse shopping trip because you're already out.
Imagine how much space we could reclaim for homes to reinvigorate those bars and eateries! :o
That is exactly what they were saying.
Yeah, sorry, I must have misread that.
What? That’s absolutely incorrect. Cities are the number one most sought after and thriving alternative, especially among young people.
Maybe cities in the US, but that’s because they’re mostly poorly designed parking lots for suburbanites.
Cities are certainly not dying anywhere else on Earth wtf.
wait what? where are cities dying?
Isn't it the opposite, where people move from the countryside into urban areas?
It's probably a uniquely American thing, similar to how many malls are dying here while they thrive in Europe. Cities have been dying a slow death since like the 70s here because suburbs are a net loss in terms of revenue because they're more expensive to maintain than the taxes they bring in, so the only way cities can afford them is to sell more land to developers to build more suburbs, which then cost the city money, and repeat into infinity.
Cities have also had a general decline in the population within urban areas during that time, with people moving out to the suburbs for the "American Dream" of owning your own house with a white picket fence, 2.5 kids, and a cat or dog (and to avoid having to look at any poor people, immigrants, or black people). This was exacerbated further during COVID as people fled denser areas. The house prices in my town that's about an hour away from one of the most expensive cities in the country (comparable to LA prices in the city here) jumped up practically 50% during COVID while prices in the city dropped something like 20% during the first year. Prices in the city have since come back up and are now above what they were before, but prices here never came down.
Cities here also tend to have a business district, sometimes even a "central business district" that's at the heart of the city, which is made up almost exclusively of office buildings/other companies, with workers commuting into the city. Even my town has people who drive every day to their job in the city. With many of these buildings sitting empty during COVID, there's been a push for urban renewal by converting them into apartments, but that's easier said than done. Offices simply don't have the same infrastructure that apartments need in terms of basic things like plumbing, and would need to be entirely gutted, but it would be a much needed fresh supply of housing that would probably help reinvigorate these city centers.
What's the penalty for a big Corp to break their lease? I can't imagine they care about credit rating.
I mean good? There is far to much concentration of people in cities and shit is too expensive.