A Crisis in the Making: How crime and 'return to work resistance' hurts low-wage workers, minorities and union members
After more than three years of pandemic-related remote or hybrid work, many employers are beginning to mandate that their workers return to the office. Some workers—as well as some unions—are resisting, however.
That resistance, if successful, will likely have a spillover effect that will negatively impact other workers, including union workers, who work in and around office buildings, whether they are street vendors, building maintenance workers, or hotel, restaurant and retail workers.
The economic costs of working remotely
In September 2021, according to a Gallup survey, 45% of full-time workers were either working partly or fully remotely. Of those surveyed, “nine in 10 remote workers want to maintain remote work to some degree.”
By February of this year, according to Gallup, the vast majority of remote-capable employees were working in a hybrid or exclusively remote arrangement.
However, by then, employers had already begun pushing for employees to return to the office.
Earlier this month, hundreds of Amazon workers at its Seattle corporate headquarters walked out in protest of “senior management’s decisions on climate change, back-to-work mandates and mass layoffs,” reported Forbes [emphasis added].
At Farmers Group, workers rebelled and threatened to unionize when the company’s new CEO, Raul Vargas, reversed his company’s commitment remote work.
Some Farmers Group workers said on the company’s internal social network that they are prepared to quit their jobs, while others have called for unionizing, reported the Wall Street Journal in early June.
More than productivity at stake
As companies like Amazon, Google, JP Morgan and others mandate their employees return to work, most claim to be doing it for productivity reasons.
“Some executives and leaders believe productivity increases when workers are in the office together,” reported BusinessInsider.com, “while others hope to increase in-person collaboration.”
"Most professionals learn their job through an apprenticeship model, which is almost impossible to replicate in the Zoom world," JP Morgan’s Jamie Dimon, a long-time critic of work-from-home policies, wrote in a 2021 letter to shareholders. "Over time, this drawback could dramatically undermine the character and culture you want to promote in your company."
However well intentioned the productivity argument may be, there is a less-discussed reason for companies to mandate a return to work and that is that many of these companies are paying for office space that is vacant or partially vacant.
Last week, for example, The Kobeissi Letter posted statistics showing that 17% of all office space in the U.S. is currently sitting vacant, with some cities faring far worse than others.
This office vacancy rate has analysts warning of a pending crisis in commercial real estate market.
Critics say the sector is precarious thanks to a potentially toxic cocktail of postpandemic office vacancies, rising interest rates and a mass refinancing of mortgages that lies ahead. [Emphasis added.]
Remote work hurts other workers. And, often, they are union workers.
In most major metropolitan areas, there are often tens of thousands of union workers, employed in a multitude of jobs that depend on thriving downtowns.
For example:
Building Maintenance workers are often members of various trade unions, from the International Brotherhood of Electrical Workers (IBEW) to the International Union of Operating Engineers (IUOE).
Elevator repairs in office buildings are often done by members of the International Union of Elevator Constructors (IUEC)
Telephone system installation and repair is often done either by IBEW members or members of the Communications Workers of America
Office cleaners are often members of difference locals or districts of the Service Employees International Union (SEIU)
Hotel housekeepers, as well as restaurant workers in major cities are often members of UNITE-HERE.
In most cities, many of the workers who work in support of downtown office buildings are minorities, often first or second-generation immigrants.
Government unions push back on returning to work
In the nation’s capital, where the federal government owns or leases one third of the District’s office space, Mayor Muriel Bowser, a Democrat, asked the Biden administration in February “to force more federal workers back to the office, hoping for help in reversing a downtown slump that she says has led to closed shops and depressed property values,” according to the Wall Street Journal.
“We need decisive action by the White House to either get most federal workers back to the office most of the time or to realign their vast property holdings” for other uses, Mayor Bowser stated at the time. [Emphasis added.]
However, the American Federation of Government Employees (AFGE) pushed back, arguing that remote work is better for the planet.
In April, AFGE won a victory of sorts when the Office of Management and Budget’s (OMB) issued a memo “recognizing the positive benefits of telework as part of an effort to establish a new normal.”
New York City’s new hybrid policy
In New York City, which has seen a rise in deadly crimes over the last few years, a deal was recently struck between Mayor Eric Adams and AFSCME’s District Council 37 allowing members of New York City’s largest public employee union to work remotely for up to two days per week, according to SILive.com.
Mayor Eric Adams and District Council 37 (DC 37) Executive Director Henry Garrido announced the launch of the flexible work pilot program for city workers who are members of DC 37, which represents about 150,000 members and 89,000 retirees. The union includes city workers in more than 1,000 job titles, from accountants to IT professionals. Many of these employees perform clerical, maintenance and technical duties to keep the city running.
In other words, workers will be able to work from home 40 percent of the workweek.
No estimates have been done on how many jobs will be affected in and around these City offices with City workers reporting to work only 60 percent of the time.
San Francisco, the ‘poster child for the crises facing downtowns’
In San Francisco, which the Washington Post calls the “poster child for the crises facing downtowns,” the owner of city’s largest- and fourth-largest hotels said last week it is stopping payment on its loans and planning for "the ultimate removal of these hotels from its portfolio."
Both hotels—the 1,921-room Hilton San Francisco Union Square and the 1,024-room Parc 55 San Francisco—are union hotels.
While the workers’ union, UNITE-HERE Local 2, told CBS News that its contract requires hotel owners and operators to retain staff in the event of a transfer and to negotiate with union about an impact on workers, if no one comes in to keep the hotels open, the union staffs at both hotels—from the doormen, front desk, housekeepers and kitchen staff (at the hotels’ in-house restaurants) to the building maintenance personnel—could become unemployed.
Although, as the ‘poster child for the crises facing downtowns,’ San Francisco’s problems are related to a myriad of other issues, like rampant crime—which has been said to be ‘worse than Afghanistan’—and not merely based on workers’ refusal to return to work, they are somewhat interconnected.
As investor and Shark Tank star Kevin O’Leary stated last week:
When we went out for financial services, people in our operating company, the best talent, told us, If I have to come into an office and sit in a cubicle and drive for 45 minutes each day into a war-torn city like San Francisco, which we were trying to hire in, I'm not doing it. I don't want to get shot on my way to work. I mean, this is another problem. Safety in large cities like Chicago, San Francisco, you know, some parts of New York City, L.A. these days, nobody wants to work in these places. They're war zones. So, they want to work where they get their jobs done. [Emphasis added.]
Not counting store closures announced by Nordstrom and Saks Off 5th, more than 17 big-name retailers have left San Francisco’s downtown shopping district since 2020.
Some of these retailers’ employees were represented by the United Food & Commercial Workers.
On Monday, the news grew even dimmer for San Francisco workers when Westfield and its partner, Brookfield Properties, announced they would no longer make payments on the San Francisco Mall and, like the aforementioned hotels, dump the properties back on their lenders.
It is not yet known whether the mall, like so many others across America, will become another ‘ghost mall.’
Thousands of union workers petition AT&T for permanent remote work
Last year, AT&T agreed to a one-year extension of remote work for employees in call centers with the Communications Workers of America. However, reported Fortune, that extension expired in March.
Before the extension expired, though, the company began requiring some employees to come back to work.
That caused Kieran Knutson, an AT&T call center worker of 18 years and local CWA president, to start a Change.org petition that has garnered nearly 8,700 signatures.
Remote work makes workers happier, but at what cost?
For those workers who can work remotely, many attest to being happier due to a better work-life balance.
In fact, one large study found that workers who work full-time from home were 20% happier on average than those who worked from the office.
“Respondents that had the ability to work 100% remotely at the peak of the pandemic,” the study found, “but are now mandated back to the office 100% of the time are significantly unhappier than the average respondent.”
“Having your employees work from an office might make sense in the short term,” states Hugo Huijer, Founder of Tracking Happiness and the study’s author, “But if it results in employee unhappiness, it can result in a drop in sustainability and performance that can be far more severe than an empty office building.”
While, in some cases, the costs of a drop in sustainability and performance may be far more severe than an empty office building, there are other costs beyond those that many workers wanting remote work may not be considering.
Whether it is the cost of empty real estate in hollowed out cities, or the loss of jobs for those workers who maintain the buildings, or serve the food in restaurants, or change the sheets in hotels, the costs are real.
