The laptop classes

living in la la land, it's messed up to assume that this

they have to go to work. But you don't. It's not just a

productivity thing. I think it's morally wrong. Listen,

it doesn't work for young kids. It doesn't work for spontaneity,

it doesn't really work for management.

And this is how the corporate world felt about remote work in

2020, during the height of COVID-19.

The biggest advantages I think, are access to large pools of

talent, who don't live around the big cities and aren't

willing to move there. Since

we've all been forced into being remote now for nine months, I

think we've realized that if you have somebody in a particular

location who's willing to work the hours to be able to

collaborate, you can do it very effectively. So it's changed

that we thought about hiring. Let's

pause here, notice something in fewer than three years,

corporate leaders have reversed their approach to remote work.

And it seems like this tactic has been working, the latest

data from the Census Bureau found that fewer than 26% of US

households still have someone working from home. That's down

from 37% in early 2021. So

the reason we're having this entire conversation about remote

work dying is first of all, because we kept thinking that

we're going to bounce back to quote unquote, normal when the

pandemic started, and we had people working from home. The

idea was, this is very temporary, and we were all going

to come back. So

really what's changed the discussion about remote work is

the slowdown in the labor market. There are a lot of

employers out there who had suspicions about remote work

from the start. And you can see that kind of by the timing of

when people actually went to being remote during the start of

the pandemic. So the concerns that employers had about remote

work were present all during the Great reshuffle. But they didn't

really have much of a choice. But with the emergency orders

expiring for the pandemic this year. Now, they can actually

start to bring people back and address some of those concerns

that they might have about productivity.

remote work was brought upon us basically by the pandemic,

before the pandemic remote work was pretty rare. So about 5% of

days, were forced to work from home, you know, all managers and

professionals were basically fully remote from March of 2020.

And then it turns out, it's worked really well,

such as no commute work in in your sweatpants doing your

laundry between zoom calls, but also just the savings in terms

of time in terms of money in terms of your commute in terms

of being able to spend more time with your children or pick them

up from school, people quickly

found ways to be productive, to continue communications together

and to keep collaborating together. And whatever tools

they could invest in to support that work and that teamwork.

As the world slowly started to open up, corporate America began

to change its tune on remote work, so much so that some firms

now even threatened to fire their employees, if they don't

show up at work,

zoom the company this is now throwing in the towel on fully

remote work,

even zoom, the video conferencing company that helps

make the remote work boom happened in the first place, is

also taking a hard line on return to office. It's an

abrupt shift from last year, when I suggested a majority of

its employees would work a hybrid schedule of just 2%

working in person full time.

So some of the pushback remote work is driven by concerns about

productivity. There have been some experimental studies that

show that there's some productivity impact potentially

from remote work. But those studies are also experiments,

right? It's unclear how they applied to the broader labor

force,

the United States does have a productivity problem. Before the

second quarter of this year, the country had experienced five

consecutive quarters of year over year declines in worker

productivity. In fact, a major study that Professor Nicholas

Bloom co authored found that fully remote work led to

productivity declines of about 10 to 20%, when compared to

fully in person work. Now, the

other important thing in this study is we pointed out, look

what firms care about, ultimately, is profitability.

And it turns out that if you have an employee that's remote,

you also save a lot of costs. So you're saving about 10% less

overhead because you don't have an office and then you could

have these folks, maybe nationally or internationally

and maybe save another 20 30 40% remote workers they may be 5

10% less productive, but they are so much cheaper that is

profitable for firms to have many teams many employees remote

if you're coming with the stat to protect yourself to put the

positive narrative for people to return to work. I like to think

what were the productivity like when people were all working

from home what you're not allowed to have any face to face

worker at all right? So now you're spinning it in your

favor. So I'd like to challenge that

if the employee can perform their their duties and handle

their responsibilities. They should be encouraged to work

from wherever makes them feel as excited about life as possible.

I camped in Key West for three weeks. I was in North Dakota in

February, I've been up and down the coast of California and I've

been to our national parks. For me. That's where I feel best

working. And that's where I've gotten my best work done. I

believe we can work from anywhere.

My name is Sujan Parajuli, I used to work for JPMorgan and

Chase it was all remote. But once they changed their policy to

come to office that was in Plano, Texas, but I live in

California. So I decided not to move out there because of my

kids. So I have two school going kids. I have to manage work life

balance as well. That was the reason why I quit my job. JP

Morgan had given me 45 days of timeframe to find another job.

And I applied for some other companies and found remote

job with Leidos, so I have been working remotely with Leidos

as a senior system analyst.

Parajuli is not alone in his choice to quit rather than

return to an office setting. Finding a fully remote job,

though, is getting more challenging. New research from

indeed found that job postings are declining faster in

metropolitan areas where many jobs can be done remotely. A

similar trend is playing out on LinkedIn as

well. So on LinkedIn last year, we saw that about one in seven

jobs were remote. And now that's down to about one in 11. But

over this time, we've also seen an inversion. Now we see about

one in seven jobs being hybrid coming up from one and 11 last

year. So we're seeing more folks coming back into the office, but

they are not coming back into the office five days a week,

many employers are strong arming their team members, and that

they would love remote work to die faster. As a result, I do

see that remote work is quote unquote, slowly dying and

becoming more competitive to get.

The pandemic induced shift to remote work has raised concerns

about the future of commercial real estate, especially office

spaces. The latest report from McKinsey Global Institute

suggests that remote work threatens to erase $800 billion

from the value of Office real estate in nine major cities

around the world. Other experts say the empty offices created by

remote work in various cities are also leading to what's been

called the, quote, urban doom loop.

The problem does start with the Office demand right then we've

seen with the advent of remote work and hybrid work and

dramatic reduction in office demand over these past two

years, that has led to right to rising vacancy rates and in

fact, all time high vacancy rates in the office market right

now. And that does put pressure downward pressure on the

valuations of these offices, you mentioned that they're down, you

know, probably 20 or 30%. Already, they're likely to fall

by more. And that causes downward pressure on property

tax revenues, because for a lot of cities, office tax revenues

is a big chunk of their tax revenues, often as much as 50%.

Some of that is is coming from office, maybe 20%. So maybe 10%

of overall tax revenues for cities comes from office, if

those offices lose about half of their value, tax revenues fall

and that creates a huge hole in the budget.

So like everything, there are going to be winners and losers

as we transition to a world where we have remote work as a

permanent feature. One of the potential losers is commercial

real estate, in part because offices aren't needed as much or

they're not needed at all. So commercial real estate may be a

loser for remote work. We may also be concerned about

businesses that support workers who come to the office. So think

about your food trucks, your laundry services, all of these

businesses that are centered around folks coming into the

office five days a week, they may face difficulties, when

that's not happening as much

commercial real estate is problematic in a number of big

cities. But there are a lot of people now who are saying that

we need to bring people back to the office because our

commercial buildings are empty, which is a little bit like

saying, we need to have people use the horse and buggy because

cars are going to wipe out that industry, we have to understand

that the world has changed. Our ways of working have changed and

we can't go back to an old outdated way simply because we

are being motivated by commercial real estate,

commercial real estate needs to rethink we've already seen in

some cities, that it's being converted, it's being used for

other purposes, some of it's being converted into residential

housing, and we're going to have to get much more creative about

what to do with those empty buildings.

If you're pushing your employees to come back to the office, you

got to make sure that they're coming back to the office for

something other than me. I

don't think we ever will bounce back to those pre pandemic days.

What I do think we will see and we are already seeing is that

there is a benefit to also being in person and that's why we're

seeing companies first saying come back one day a week

two days a week, three days a week, maybe four days a week

even. But I do think that the old school five days a week, 40

hours on the premises, I do think that's dead. I don't think

it's coming back.