Is the whole WFH cultural shift threatening cities a NA centric problem?

[jmecklenborg]

Originally Posted by 10023

This has certainly been the case for most of the past 30 years or so. Unfortunately the Brexiters and current government are trying their best to stop or reverse the flow of talent from Europe that has been primarily responsible for this. Europe’s loss (in terms of dynamism) has been London’s gain, but now that is being diminished greatly.

I'm not an expert but it appears that London's position as Europe's financial capital is ensured as long as its financial services enjoy the advantage of the independence of the British Pound. England's former EU membership was incidental to the ability of its banks to coordinate with the Bank of England on interest rates and other matters. France and Germany gave up all hope of one of their cities challenging London the moment they established the Eurozone.

Switzerland is still independent of the Eurozone, of course, but it does not seem to have a large enough domestic economy or the advantage of a former empire that speaks its language.

My company here in the U.S. occasionally buys things from companies in Switzerland and they send us quotes in Euros, not Swiss Francs. England never does this - the quotes are always in pounds.

[iheartthed]

Originally Posted by jmecklenborg

I'm not an expert but it appears that London's position as Europe's financial capital is ensured as long as its financial services enjoy the advantage of the independence of the British Pound. England's former EU membership was incidental to the ability of its banks to coordinate with the Bank of England on interest rates and other matters. France and Germany gave up all hope of one of their cities challenging London the moment they established the Eurozone.

I don't think that's it. I think London was Europe's financial capital despite not joining the Eurozone because the U.K. was still allowed all the benefits of joining the single market. London made more sense than Paris or Frankfurt because it was inside the single market and because of its strong ties to, and shared language with, other large former colonies in Asia, Africa, and North America (particularly the U.S.).

[hipster duck]

Originally Posted by iheartthed

I don't think that's it. I think London was Europe's financial capital despite not joining the Eurozone because the U.K. was still allowed all the benefits of joining the single market. London made more sense than Paris or Frankfurt because it was inside the single market and because of its strong ties to, and shared language with, other large former colonies in Asia, Africa, and North America (particularly the U.S.).

There is some evidence that countries that practice British-derived Common Law have more developed financial markets than countries with other legal systems. English-speaking countries are just so much more financialized than the rest of the world.

[iheartthed]

Originally Posted by hipster duck

There is some evidence that countries that practice British-derived Common Law have more developed financial markets than countries with other legal systems. English-speaking countries are just so much more financialized than the rest of the world.

That seems hard to conclude based on the evidence and alternative explanations. There's London, New York, and Hong Kong, which all benefit from proximity to large markets, but I don't see evidence that English-speaking cities without that advantage have more developed financial industries than anywhere else.

[hipster duck]

Originally Posted by iheartthed

That seems hard to conclude based on the evidence and alternative explanations. There's London, New York, and Hong Kong, which all benefit from proximity to large markets, but I don't see evidence that English-speaking cities without that advantage have more developed financial industries than anywhere else.

Singapore is a major financial centre. Toronto is a major financial centre, given that Canada is kind of a medium-sized economy. This is not me being a homer; I wish Toronto's economy actually diversified a bit more away from finance. Sydney is important, if a bit far removed from the consciousness of most Americans and Europeans; their national pension fund alone has $2T in assets. Then there is the "shadier" side of finance, in places like Cayman, etc.

[Crawford]

Canada has really big banks relative to size, though. And I wouldn't call Toronto a major financial center.

Frankfurt is a major financial center and obviously not an Anglosphere nation. And New York's financial might has Dutch roots. London's financial might was really flagging prior to EU entry and establishment of English (vis a vis U.S. hegemonic status) as global business language.

[Obadno]

Toronto is a secondary financial center.

The big global ones are New York, London, Hong Kong and Singapore. Maybe Frankfurt and Tokyo make the cut depending on how you want to do it.

There are plenty of secondary and of course regional ones as well but the big four have been the big four for a long time.

Places like Switzerland, Cayman's, Bermuda, Monaco are tax havens not really "financial centers" in the traditional sense.

[mrnyc]

Originally Posted by Obadno

Toronto is a secondary financial center.

The big global ones are New York, London, Hong Kong and Singapore. Maybe Frankfurt and Tokyo make the cut depending on how you want to do it.

There are plenty of secondary and of course regional ones as well but the big four have been the big four for a long time.

Places like Switzerland, Cayman's, Bermuda, Monaco are tax havens not really "financial centers" in the traditional sense.

and don't forget delaware and south dakota for your ill gotten loot.

[10023]

Originally Posted by jmecklenborg

I'm not an expert but it appears that London's position as Europe's financial capital is ensured as long as its financial services enjoy the advantage of the independence of the British Pound. England's former EU membership was incidental to the ability of its banks to coordinate with the Bank of England on interest rates and other matters. France and Germany gave up all hope of one of their cities challenging London the moment they established the Eurozone.

Switzerland is still independent of the Eurozone, of course, but it does not seem to have a large enough domestic economy or the advantage of a former empire that speaks its language.

My company here in the U.S. occasionally buys things from companies in Switzerland and they send us quotes in Euros, not Swiss Francs. England never does this - the quotes are always in pounds.

The pound really doesn’t have anything to do with it, except for domestic flexibility to use both monetary policy and fiscal policy to manage growth and inflation, whereas Eurozone countries need to apply a “one-size-fits-all” approach that may not always be optimal (e.g., when the German economy is humming and the Greek one is a mess, but the latter cannot independent loosen its monetary policy to boost growth).

In any event, London’s pre-eminence as a European financial center pre-dates the Euro. There was a strong legacy from the British Empire, but there were other financial centers in Europe. What really made it take off was the so called “Big Bang” under Thatcher in the 1980s, which liberalized rules. All the American investment banks came, started hiring like crazy, and made London their European/“International” HQ. Of course, those American banks were not doing this just because the British economy itself was so attractive, nor were they hiring only British financiers and traders. They couldn’t have done, there aren’t enough of them. The UK was of course part of the EEC, the predecessor to the EU, already.

London will almost certainly continue to be the largest single financial center in Europe for the foreseeable future. It’s got the advantage of language, the best time zone to work with the US and with Asia (though of course Europe is only an hour ahead), and all the infrastructure in place. But the last just means that change has to come slowly.

The risk of course is loss of talent pool if all those Europeans can’t, or more likely don’t want to, establish their careers/lives/families in London anymore after Brexit. This is not at all like American expats coming to do a stint in London, or Hong Kong, or wherever for a couple of years. To be the financial capital of Europe, London needs Europeans to move here in their 20s and stay until they’re retired - and they need to find wives and social networks and cultural touchstones as well. Promises from the government that highly-paid bankers will be able to get visas doesn’t accomplish that, obviously. It has to be a pan-European city.

[10023]

Originally Posted by Crawford

Canada has really big banks relative to size, though. And I wouldn't call Toronto a major financial center.

Frankfurt is a major financial center and obviously not an Anglosphere nation. And New York's financial might has Dutch roots. London's financial might was really flagging prior to EU entry and establishment of English (vis a vis U.S. hegemonic status) as global business language.

That last point is important more broadly. Membership in the EEC/EU really rescued London from post-imperial decline and irrelevance. It was an imperial capital that lost its empire, and then kind of replaced it by becoming the preeminent financial/commercial center of the whole EU.

The problem with Brexit, really, is that the entire project is diametrically opposed to what London needs (or what I would want, of course). An honest Brexit voter who hasn’t been duped by the clearly false claims of economic benefits that even come close to offsetting the drawbacks would say, basically, that they want England to be more English. There are too many foreigners speaking funny languages. It was a vote against multiculturalism, basically. And like Alabama, the least Hispanic state in the continental US, being the most in favor of building the wall, that opposition was most pronounced in the most white English parts of the country (I say English on purpose, because Scotland has different dynamics).

London’s loss is of course everyone’s loss, because it’s so important to the economy and tax base and always will be. Knee-capping London isn’t like harming the NYC Tri-State economy, from the perspective of the provinces - it’s like crippling NYC/LA/DC/SF/Houston/Dallas/Chicago/Boston/Atlanta. Mouth-breathers in MAGA hats would probably love that too but it wouldn’t exactly be good for them in the long run.

[dave8721]

Miami-Dade County and the State Of Florida looking into incentives to encourage more working from home to cut down on traffic congestion

https://www.miamitodaynews.com/2021/...telecommuting/

State pilot study could lead to incentives for telecommuting

A state-funded regional program starting in January to analyze working from home to cut traffic congestion could lead to permanent incentives for telecommuters. First results are expected early in 2023.

Miami-Dade’s Transportation Planning Organization (TPO) and South Florida Commuter Services are leading the charge to see if telecommuting can become a long-term strategy to trim congestion.

[pdxtex]

American cities are having a games of thrones moment; lots of subplots and societal conflict. WFH culture is probably here to stay. Corporate America's reluctance to go back to the office is probably more cost based than safety based. Couple that with the political community's attempt to squash every single case of covid and their attempt to cure all civic inequities all at the same time and thats the perfect recipe for suburban ascendancy. Im staying put for the meantime but downtown Portland is still looking a little under the weather.

[Steely Dan]

^ meanwhile in chicago, a construction loan to construct a new 73 story luxury apartment tower in the south loop just closed last week.

and a new west loop 300- 500 footer seems to break ground every other week for the past handful of months.

i'm actually considering finally cashing out my downtown condo because its never had a higher value since i purchased it way back in 2007!


"The reports of the death of America's cities have been greatly exaggerated."

[pdxtex]

Well maybe its just us. Portland is definitely having a come to Jesus moment. Its nearly 2022 and the apple store downtown has a 20 ft steel barricade surrounding the store. Ive seen some pretty good condo deals downtown tho.

[Jasoncw]

Previously some companies spent a ton of money on high profile desirable locations and buildings, because attracting talent and the office culture were important to them. Those things will still be important to them, even if employees work at home some of the time.

And then some companies found space in the cheapest suburban office parks possible because their employees physically need some small amount of space to do their jobs. These companies are going to save money and make people work from home.

So I think high end office space will generally be fine. Dumpy office space will be in trouble.

[pdxtex]

Your first paragraph is definitely my company, a Berkshire Hathaway power company. We were probably one of the first big companies to go back to the office. Theyre also spending a boatload of cash to remodel our building. Also controversially, we're allowing full time remote work but those employees have to take a ten percent paycut. Whoa. Yeah the expectation around here is definitely butts in seats.

[C.]

Originally Posted by pdxtex

Your first paragraph is definitely my company, a Berkshire Hathaway power company. We were probably one of the first big companies to go back to the office. Theyre also spending a boatload of cash to remodel our building. Also controversially, we're allowing full time remote work but those employees have to take a ten percent paycut. Whoa. Yeah the expectation around here is definitely butts in seats.

I'm hearing something similar where I work. Permanent work from home, but it comes with a pay cut. There is a hybrid option being proposed, where you keep your current salary and are expended to come in two days a week or so. It's interesting as a lot of people have relocated, but very few are willing to entertain a permanent pay cut in order to permanently WFH. I would take that deal in a heartbeat. Some of the higher earners are talking about flying in when they have to, getting a hotel, then flying back since it would be more cost effective.

[iheartthed]

Originally Posted by C.

I'm hearing something similar where I work. Permanent work from home, but it comes with a pay cut. There is a hybrid option being proposed, where you keep your current salary and are expended to come in two days a week or so. It's interesting as a lot of people have relocated, but very few are willing to entertain a permanent pay cut in order to permanently WFH. I would take that deal in a heartbeat. Some of the higher earners are talking about flying in when they have to, getting a hotel, then flying back since it would be more cost effective.

I'd be surprised if any company is still holding this line right now considering how tight the labor market is currently. I don't know if this is sustainable long term, but this is a great time to get a NYC or SF salary while living in a lower cost metro.

[Obadno]

I heard an interesting thing somewhere about the whole new WFH paradigm and I think it put it a very good way.

Im Paraphrasing as it was from some talk I watched:

It isnt that suddenly a New York banker is going to move to Nebraska but more often somebody form Nebraska that would have had to move to NYC to become a banker can now stay where they are.

And I think thats correct. There are people who only moved to or live in cities because they desire the income but don't prefer the living conditions. But if your an ambitious person that also likes where they are from or desires to stay close to family or whatever the new way the world works allows for a lot more flexibility in that. And again it only takes a few households in smaller cities and towns to make a world of difference economically and the lack of said persons in NYC or wherever wont even be noticed.

Again this is a trend already occurring but just sped up by Covid

[Obadno]

Originally Posted by iheartthed

I'd be surprised if any company is still holding this line right now considering how tight the labor market is currently. I don't know if this is sustainable long term, but this is a great time to get a NYC or SF salary while living in a lower cost metro.

I think almost everywhere that can will offer something hybrid, three days a week in office, full remote when and where appropriate seems to be the general path most companies are taking.

I'm also seeing lots of companies that have offices in multiple locations allowing for resources and talent to be shared across regions. My office in Scottsdale now has support staff for our offices in Denver, Kansas City and Salt Lake because there was a need and these people don't need to move to those places to help.