How Remote Work Is Destroying Manhattan & New York City

The pandemic has led to a huge shift to remote work, helping workers but hurting small businesses and landlords that relied on foot traffic. This shift is causing cities like New York to lose out on billions in revenue, but may also lead to a drop in rent prices and allow more people who enjoy the cities to move in. Every change has winners and losers.

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LONG DESCRIPTION: In this video, we're going to discuss a big change that has been brought about by the COVID-19 pandemic, which is the shift to remote work. Every big change has a group of people that it helps and a group of people that it hurts, but the idea is if you consistently make changes that help a lot of people and hurt very few, then on average over a large period of time things will get better for the population at large.

The people this change helped are largely the workers, especially the ones that weren't paid as highly. The people that this change hurt were industries like landlords and small businesses around office buildings that benefited greatly from the amount of foot traffic that people going in and out of the office would create. In places like New York City, there are little stores everywhere, and much like you might make an impulse buy of a box of cookies at Walmart, residents of cities like New York might make an impulse buy of something they saw in a window or some food from a nearby vendor that happened to catch their eye. But it's, of course, impossible for a food vendor to catch your eye or for you to see something in a window that you want to purchase if you're never even walking past the window where the vendor is in the first place. And that's what's happening with the huge shift to remote work as people leave the city because they don't need to be there anymore to go into the office in person.

Doubtless, this shift to remote work is a great thing or a terrible thing, depending on how you want to look at it. If you're someone that is now remote and much happier because of it, you see this as a huge win for the workers who don't have to pay huge rents anymore, don't have to live in a loud city, and are able to work from the comfort of their homes. But then again, if you're someone that really enjoyed the city and appreciated all the great things Manhattan had to offer, and now there's a chance that that city may shrink or the culture of it might start to die away, you might see this as a bad thing.

This story of the big city shrinking because remote work is now making people able to leave and find cheaper residencies in nearby suburbs or different states entirely isn't unique to New York but rather it's something that we're seeing across a lot of metropolises. Just look at this chart. This is a measure of how well downtowns have recovered since the pandemic and it uses mobile phone data to estimate foot traffic of downtown areas of large cities. And while some places as you can see like Columbus, Baltimore, and San Diego have completely or almost completely recovered, as we go on down the list we see some places like New York, which is only at 78%, Jacksonville, FL, which is only down to 74%, and we keep moving down and we see places like Chicago, Portland, and San Francisco that are only about a third of the foot traffic that they used to be.

You can imagine how devastating this is for small businesses or any business really in the area. Think of the nearest mall to you and now imagine that the foot traffic in that mall drops by 60 or 70%. Most of the stores would be forced to close as it's probably no longer profitable to operate there. And this is causing some areas like New York City to lose out on $12 billion a year in revenue workers in the area just chose not to spend.

But it's not just the private businesses that take a hit from this. You also have to think about the fact that with New Yorkers traveling less and spending less money, the income tax is also much lower, so now public officials have the issue of trying to find ways to maintain subway systems and invest.

Some other things we discuss are remote work, new york city shrinking, the effect of remote work on cities, remote work hurting cities, people leaving cities due to remote work, and more!

Тэги:

#finance_news #business #business_news

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