Adams, by Letting Municipal Workforce Work Remotely, Sticks a Fork in New York’s Recovery

New York City officials just announced another bone-headed move sure to delay the Big Apple’s recovery. No, I’m not talking about the Clean the Slate proposal, which would conceal past criminality from landlords or prospective employers, potentially putting lives at risk. With rampant crime chief among New Yorkers’ concerns, that seems a poor idea. I’m talking instead about the decision to allow municipal employees to work remotely. What on earth can they be thinking?More than anything, New York needs people to come back to work. More employees mean safer streets and more revenues for the city, as well as the delis, hair salons, shoe stores and all the other gazillion businesses that keep New York afloat. New York’s leaders should be doing everything possible to make that happen, instead of setting a very bad example with its own workforce.Mayor Adams has reached a deal with New York’s largest public sector union which will allow employees to work remotely two days a week. The pilot program has already begun and will run through at least May 2025. The agreement involves city workers who are members of DC-37; that union has about 150,000 members. Not all employees will be eligible — lifeguards and zookeepers, whose unions are part of DC-37, will probably not be working remotely.Why is this such a terrible idea? Because New York, like several other blue cities (think Chicago and San Francisco) is bleeding residents. A combination of high taxes, suffocating business regulations, unmanageable living costs and soaring crime has driven people out. New York State’s tax base shrank $24.5 billion last year and the Democrats in charge have but one idea to salvage their sinking ship – hike taxes even more, creating a death spiral. New York City already has the highest combined state and local tax rate in the country at 14.8 percent. We have seen this drama before. In the 1970s, New York suffered a similar fiscal crisis, brought on by overly generous union agreements, excess spending, a bloated municipal workforce, and an exodus of residents due to high crime and rising taxes. The city actually neared bankruptcy, was rescued through a series of draconian budget measures, and over the next decade recovered its former glory.Today is different. In the 1970s and 1980s, most high-earning New Yorkers had to live or at least work in the five boroughs. Remote was not an option.In those days, finance was essential to New York’s prosperity; advertising, publishing and entertainment were also important economic contributors, as was manufacturing. None of those occupations allowed people to work from home; now, practically all do.Some financial firms, like JP Morgan Chase and Goldman Sachs, have tried to enforce five-day-a-week attendance; they are the outliers. Most companies have settled for four days, utterly giving up on Friday, while others have settled for three. The upshot of people continuing to work remotely is continued tough times for the thousands of businesses that cater to office workers, record high vacancy rates in office buildings, and sub-par employment. The city’s unemployment rate is 5.4 percent, 46 percent higher than the national average and far higher than the 4 percent recorded pre-Covid.Office occupancy in New York is now roughly 50 percent, considered by many analysts the “new normal”, and has not moved meaningfully higher in recent months even as the city appears busier. A study done in February for the Partnership for New York City, a pro-business group, showed that only 9 percent of workers were in the office five days a week, unchanged from the preceding September. That, in spite of a gradual increase in people returning to the office. Worse, researchers estimate that the ongoing work-from-home phenomenon will cause the value of New York’s commercial real estate to plummet 44 percent by 2029. Those losses will spread to banks and investors deep in the office building lending pool. Concerns about such forecasts will stall new investment and building, causing a downturn in construction and further depressing employment. Martha Stewart recently slammed remote work in an interview, concluding that the U.S. will go “down the drain” if people don’t go back to the office. New York City will lead that decline.

Adams, by Letting Municipal Workforce Work Remotely, Sticks a Fork in New York’s Recovery

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