It's gonna look different.
Obviously, people have gotten used to working from home.
Home does give us an environment that, you know, people should
spend at home maybe a day or two a week.
I don't think there's any way we're gonna go completely back.
We are seeing people adding jobs. But it's not exactly the
same job that got suppressed that got, that are now
restarting.
There will be much more hybrid work, there'll be people working
in offices, there'll be with people working at home, it's
going to be a much more fluid population than it was before.
And it's going to evolve, I think a lot of people are going
to discover that hybrid workplaces are not that easy to
run. And we're going to have lots of changes in the way work
is done.
You look at Silicon Valley, for example, you look at these tech
companies, they tend to be on the cutting edges of a lot of
things, not only technology, but also human relations. And
they've been much more willing to allow people to work remotely
that's been going on for some time. But I think that they are
a symbol of what's going to happen. And, you know, if if
people really want to work from home, more, more of the times
during the week, companies are going to have to adapt to that.
You know, that's just that that's just the force of
economics, if they want key employees. And this person says,
I really don't want to go to that office in San Francisco or
New York or wherever, every day, I've got another offer, I don't
have to do that. That's what people are going to do. And that
puts pressure on companies to adapt.
Coordination is incredibly important. Like if you think
about traffic lights, they coordinate, there's lots of
things that are coordination devices, and working from home
and from the office is important. And there's another
bias here imagine somebody works in New York and for COVID, they
move to Vermont, and they forgot what it's like to work with
people and feel close and working in a team. That person
might say to themselves, I'm perfectly happy in Vermont, not
realizing the benefit that you would have from working from the
from the office. So you know the behavioral economics perspective
is a little bit paternalistic, because it says sometimes people
make mistakes. In the cases where people make mistakes,
maybe we should try and reduce those, or prevent them. And I
think one mistake is people who work completely remote. Not
saying 100% of these people are wrong, but I think a lot of them
don't realize what they're giving up. Right? And after a
year and a half of not working with people we forgot. And the
second is that if we don't coordinate work from home and
work from the office. We're going to get it wrong.
I think it's good for the employees. They're obviously
making a choice and they're taking advantage of you know,
lower cost of living, cheaper housing, lower taxes, shorter
commutes, so they're gonna be happier. I think employers will
figure it out as well. I mean, there's some, you know,
adjustment pains here, people have to figure out how to adjust
and, you know, there's some niggling HR issues, human
resource issues, like for example, you know, say I worked
in New York, and decided now I want to work in Vero Beach,
Florida. I don't want to go back to New York, I can do my job
here. No problem. I can catch a plane from Orlando or from Palm
Beach, get to anywhere I need to go. I'm on the computer all the
time anyway. But if I'm living in Vero Beach, should I get New
York wages, or should I get Vero Beach wages? The answer is
probably Vero Beach wages, but that's going to be a trick to
get from here to there. So businesses will figure it out.
And they'll adjust, but it'll take a little bit of time. But,
you know, I think we'll adjust to this and it will ultimately
improve productivity, and that that's, you know, obvious key to
the success of businesses and success economic success as
well.
You cut out a lot of the expenses of of commuting,
whether it's by car or by public transit. And, and also, of
course, you have a decided shift continue, which is already there
where people are buying larger houses in suburban or rural
areas. They're getting out of a big city apartments in New York,
San Francisco, etc. Where they're really cramped and
expensive. And of course, the need for office buildings is not
going to be there either. If people are working from home,
the techniques, that already exists in some places where
people in effect share desk, you may have one desk that's
occupied by two or three people at different times during the
week. That should probably be a lot more common. So, I think
you're going to see a continuation of the trends we've
seen with emphasis on single family houses and suburbs and
rural areas, a lot less interest in city, big city, expensive
apartments, and office buildings, I think are going to
are going to basically suffer as well.
Now there is a reasonable debate, you know, I haven't
quite figured it out, in my own mind, about space per employee.
So for example, are people going to be workers gonna be nervous
about working in close quarters with their colleagues. You know,
prior to the pandemic, there was this move to bringing everyone
into kind of a common area, having them working together and
kind of like a kind of a bullpen kind of area, because the
thought was this improves collaboration and communication
and generates new ideas and innovation. And that may not, we
may not feel the same way about that, you know, post pandemic,
particularly if there's another pandemic, I think that would
totally change people's feelings about, you know, how they, what
kind of space they want, when they go to work. So that that's
an open question in my mind, you know, my sense is, it's not, the
space per employee is not going to change all that much on the
other side pandemic. But I could definitely be wrong about that,
it could be that, you know, people will want more space,
they want the six feet between them and you know the next
person because they don't feel safe otherwise. So that would
obviously increase the demand for office space. But net net,
you know, I think office space demand will be weakened by all
by the pandemic, and office market will have to adjust to
You want to say, hey, the office is open, we want you to come
that.
every day, or three times a week, whatever it is, you can
come for an hour or two, you don't have to come for the whole
day. But we want you to come every day. Now, why do you want
that? Because somebody would come for a day, and nothing bad
would happen. And then they will come another day. And that
experience of coming and seeing that nothing happened would
reduce their anxiety. So if we think about the transitional
period, I think that the more concerned people are, we
shouldn't say to concerned people, if you're worried stay
at home, we're not really helping them get over it. I
think we should take come to the office, but come for a very
short time, it's fine. And then people would do things and over
time, learn that it's not that not that dangerous.
Maybe we can all work a little bit more reasonable and more
flexible hours. And I think the pandemic might help, might have
helped with that. Because people had to adjust necessarily, I'm
curious to see whether it's gonna stick or not, I think I
hope that the conversation in the media will help it stick
because I think it will make everyone happier.
One thing I have no confidence in is the future of how of
productivity, how fast is work, is the workforce's productivity
going to be able to improve? And you know, this sounds like an
arcane kind of economic concept. In some degree it is. But at the
end of the day, it's our ability to produce more with less effort
that allows us that better standard of living, right, it's
the productivity gains, that drive all of our economic well
being. It's it's what's behind, you know, GDP, it's what's
behind our incomes, it's what's behind corporate profits, it's
what's behind stock prices, it's what's behind housing values,
it's what's behind CRE prices, it's what's behind tax revenues.
It all goes back to can we produce more with less effort.
And, you know, one of our biggest problems, pre pre
pandemic was productivity growth was was very weak, you know, it
was it was 1% per annum, which is half of what we've been
experiencing through most of the post World War Two period. And
so if we continued on that path, that means, you know, our
standard of living would would be significantly diminished over
time. So the question is, on the other side of the pandemic, are
we going to go back to that 1% world of very slow productivity
growth that we felt like we were trapped in? Or are we going to
go to something bigger and better than that? Because of
this learning curve we just went up because of the pandemic, we
all, you know, literally went immediately up a mass learning
curve, to use these new technologies online, businesses
incorporated new business practices, does that mean that
we're going to be able to generate stronger productivity
growth in the future than we have in the recent past? That's
a very significant question, ver big question, and a very
important question for all of us.
What the crisis the COVID crisis did is that it many jobs
disappeared from some places and now many jobs are reappearing
but not necessarily always in the same places. So that is
going to take some time to leave people the necessary
adjustments.
There are lots of things that are being substituted for that
are not going to come back in a major way and I really do feel
sorry for these. But in general, I like to think of it as an
evolution rather than a destruction. That on the whole,
we are opening up more opportunities. And we haven't
gotten to the stage yet, where we look at the silver linings
from this pandemic, we're still very much for understandable
reason, looking at all the costs, or the unintended
consequences and negative unintended consequences. But
there's a lot of silver lining, we can work smarter, and we can
evolve into smarter workplaces. So while there will be a few
segments hit particularly hard, it's not going to be as bad as
people thought in the beginning.