You're listening to the Bloomberg Opinion podcast. Catch us Saturdays at one and seven pm Eastern on Bloomberg dot Com, the iHeartRadio app and the Bloomberg Business App, or listen on demand wherever you get your podcasts.
Welcome to Bloomberg Opinion. I'm Amy Morris. This week we look at working from home for working moms. It looked like a new way for working mothers to strike a balance between a career and family, but now it may be turning into a dead end, and one senator has
placed a whole non military promotions. We're going to look at what this means for the Senate as a whole, and we'll discuss the incredible shrinking office not just that more people want to work from home, but office space itself is dropping, a trend that actually started before the pandemic. But we begin with the big disconnect of twenty twenty three, at least where the economy is concerned, because many predicted that the big economic story for this year would be
a recession. President Biden's top economic advisor, the Director of the National Economic Council, Isle Brainerd, is a former vice chair of the Federal Reserve. In last month, she discussed the risk of recession in the near term.
We are seeing strong ongoing growth with inflation coming down. We're seeing unemployment staying below four percent twenty months in a row now with inflation coming down, and so those data which have been sustained now for a relatively long period of time, suggests that there's ongoing resilience there.
So we haven't seen a recession. There is no expectation of a recession, and the resilience of the economy has economists and analysts believing that if there is a recession, the recovery will be swift. So the story, the disconnect is between the consumer sentiment and consumer behavior. Let's bring in Betsy Stevenson, a Bloomberg opinion columnist and an associate professor of public policy and economics at the University of Michigan.
She was also on the President's Council of Economic Advisors and was the chief economist at the Department of Labor. Tell us what is going on? What is this disconnect?
Well, you know, when a lot of people hear this, they're like, of course, people are mad. Prices are high, They're higher than they were in twenty nineteen, and they don't like that, And the fact that prices are high and that makes people mad is not the puzzle. It's that they are spending more than they were spending in twenty nineteen, and not just more as in you know, they have to spend more to make up for inflation,
but they're buying even more stuff. They're you know, treating themselves a consumption spending adjusted for inflation is very very high. So they're spending as if they think it's good economic times. But then when we ask them, how do you feel about the economy, they are in the dumps, you know, as low in this period as they were in some parts of the two thousand and eight recession.
Be more of a reflection of a political affiliation. If you're complaining about the economy and at the same time you're spending more money than you've ever spent before, not because of inflation, but because you want more stuff.
So economists tend to believe in what we call revealed preference. So this is where this disconnect is very puzzling to economists, because you're telling me you think things are bad, but you're spending as if you think things are good. So which is it? Is it? What you're saying out loud
or is it your behavior. One of the things that could explain that kind of difference would be if actually you think the economy's fine, that's why you're spending like it's fine, but you're telling people who ask you what you're telling the pollsters that you hate the economy because you're a Republican and the Democrats in power, and that you know, makes you hate the economy no matter what's happening.
And in fact, there's recent research that's come out that shows that that can explain about forty percent of the disconnect. So we do have a partisan veil that affects our perceptions. Luckily, that partisan veil doesn't affect our behavior.
So we have seen disconnect like this before. That's an historical perspective that would go along with this.
Such a good question. You just ask, what we see is not as big of a disconnect as we're seeing right now. That's why it can only explain about forty percent of the disconnect. But what we do typically see is if I ask you how the economy is doing, and then I look at your your spending on average, those things have been pretty well lined up. But if I then also had asked you, you know, what party
do you identify with. What you'll see is that the Republicans are more optimistic about the economy when there's a Republican in power, you know, even when the economy is doing sort of poorly, and that Democrats would be less optimistic about it, and the reverse would be true if a Democrat was in power. So, you know, we don't see is the kind of disconnect we're seeing right now on average, but we do see that there is somewhat
of a disconnect. And so some people have argued that it's the increase in partisanship that has caused this big disconnect.
And we are talking with Bloomberg columnist Betsy Stevenson about the big disconnect between consumer sentiment and consumer behavior. The money illusion, which you mentioned in your column. What is that? How does that apply here?
You know, when you get a raise, everybody wants to think that that raise is because of your hard work, and so you want your income to go up. You want to get that raise, but you don't want the prices to go up. Now, sometimes we get a raised because of our hard work, but a lot of the times we get a raised just because of inflation, and inflation is when all prices in the economy are going up on average, and that usually includes the prices of workers. So that that's one of the reasons why we can
never reverse inflation. And that's something I think people really hate.
But if we wanted to take all prices in the economy, you know, down twenty percent on average, we'd all have to take a twenty percent pay cut to do it, as well as as cutting the prices of the things we paid for, because it get you know, it's that idea that you know, if I walk into a grocery store and I hand over one hundred dollars for my groceries, well that's one hundred dollars of revenue for the grocery store, and the grocery store uses that money to pay its workers.
So think about a mom and pop store. You know, they're they're paying themselves and they're paying for their they're paying their suppliers. So if you're paying more, somebody's getting more. Is it the supplier, is it the mom and pop? What money illusion is the fact that we focus on what are called nominal prices, that's the sticker price for some things, and we tend to try to think about
real prices, meaning adjusted for inflation for other things. And that means that we can we can be angry about the prices while not being angry about what that has meant for. Say, are our house prices right? And I have yet to hear somebody in this economy say inflation is out of control, my stock portfolio is up too much, my house price is up too much. It's this ridiculous inflation. That stuff needs to come down. My house price better
fall twenty percent. Right. Nobody's saying that. People who want to buy a house who aren't in the market are saying that, but not the people who who own a house. So we tend to focus on the way inflation harms us, and then we try to ignore the way it benefits us.
I'm wondering how long this disconnect can last, or does it matter how long it lasts. Is it something that's sustainable? Is it something that folks will eventually grow out of, the pendulum will swing.
Even that's such a good question. I think there's a there are two distinct things, which is how long does it keep distorting people's behavior? And I think people would eventually, you know, get used to too higher prices. You know, I think my grandparents probably never stopped complaining about the fact that, you know, they used to only have to
pay five cents for a coke. But I think that they probably were buying as you know, they were making buying decisions about coke at the in the late you know, and at the end of their life, as if they didn't have money illusion, But they certainly were still complaining about it. So you know that money illusion can affect our perception that things have gotten worse, I think, for
a long time. And it probably depends a lot on sort of how old you are when these things happen and whether to be To be clear, inflation hurts some people while it benefits others. It tends to be very redistributed, redistributative, and if we look in our economy over the last couple of years, the people who change jobs got huge wage increases, So those were some of the people who who won, but not everybody wanted to or could change jobs, and the people who stayed in their jobs ended up
really losing out. Their wages didn't keep up with inflation. If you look at union members, their wages weren't keeping up with inflation. That's why we've seen so many big union battles like the UAW. Their wages had eroded really substantially due to inflation because they didn't have a cost of living adjustment in their contract. So people who are hurt by inflation may feel angry about it, you know,
for the rest of their lives. The question will be really around when people sort of adjust to the new price level and go about making decisions without giving a lot of thought to the fact that prices are higher today than they were ten years ago.
Thank you, Betsy. Betsy Stevenson is a Bloomberg Opinion columnist and an associate professor of public policy and economics at the University of Michigan. Coming up, we look at how working from home has shifted from a new path for working moms to possibly a dead end. You're listening to Bloomberg Opinion.
You're listening to the Bloomberg Opinion podcast. Catch us Saturdays at one and seven pm Eastern on Bloomberg dot Com, the iHeartRadio app, and the Bloomberg Business app, or listen on demand wherever you get your podcasts.
You're listening to Bloomberg Opinion. I'm Amy Morris, and you might have thought that remote work or work from home would make things easier for working mothers, but more often we're finding more workplaces retreating from remote work options and now a push of course to get more people back in the office. Let's talk about what this all means with Beth coo At, a Bloomberg opinion columnist covering corporate America. Beth, are there more flexibilities now for working moms?
So this is a really interesting question because I think we did see during the pandemic a lot of companies started to offer more flexibility and remote work for everybody, and that was a great, a huge perk, a huge boon working moms all of a sudden could kind of juggle their lives in a way that was a lot easier. But I think the issue here is the way working from home is perceived. So the perk might still be there, but it's the perception I think that is really the issue.
The perception being that if you're working from home, you're not really working exactly exactly.
So I think what everybody was working from home, it was like, great, this, we can do this, this is fine. Every It was kind of kind of leveled the playing field. Now that companies have started to call people back to the office, people who have sort of continued to take advantage of working from home, are you know, outraging called lazy by big corporate America CEOs. You know that they're not working as hard, that they can't really be leaders.
So so even though the option for them still might be there, it doesn't do them a whole lot of good. If this is kind of the stereotype that's continuing to be perpetuated, is.
That the only stereotype that you might be encountering as a working mom, specifically obviously working from home. There's that stereotype that's always kind of been there. If you're working from home or remote working, you're not in the office, the manager doesn't have eyes on you, so there's some question about your productivity. Is it worse if you are a working mother?
I well, it's sort of a double edged story for working moms, which is often the case.
Right.
So on the one hand, if you're at the office too much, people are like, well, where I wind you with your children? Like, I think that is actually a question that people ask, and you know, are they good?
How can they possibly be a good mom? If they're here all the time.
And then on the flip side is if you're not there, if you are trying to juggle and make it work and work flexible hours, then the question is are you dedicated? You know so, I think it's a really fine line for a lot of women.
Didn't We learn during the pandemic that working from home does work. A lot of places were able to transition quite seamlessly.
One would have thought that.
You know, we saw record profits, but a lot of companies during the pandemic. It seems though, that this really was a perk that companies offered in a tight labor market, right we saw you know, employment, unemployment was record low. We just it was such a hot job market. And now that things have pulled back a little, it seems that this was really not some big structural change, that it really was kind of a tool that companies used to lure workers, and a lot of them have walked it back.
Is this also a generational thing? As younger workers are coming up through the corporate workplace and they become managers, will they fall into that trap of believing that people who are working from home aren't really or will that be where we start to see more working from home actually come to fruition and help those working moms.
Yeah, I do think there is a generational shift here, right.
A lot of the people who are at the top kind of grew up this way, coming into the office. This is how they learned to do their jobs, and it's hard for them to see another way. So I do think that a shift in leadership as a next generation rises could really help this.
You know, one thing I didn't notice.
Is that a lot of women are kind of cutting their own paths right rather, they're leaving those jobs. They're saying this isn't for me, and they're starting their own companies. They're they're becoming independent contractors. And you know, in the companies that these women start, maybe there's.
An answer there too.
Maybe they will kind of, you know, implement some of these policies that we know really do help women.
And we are talking with Bloomberg Opinion columnist Beth Kelat about the push to return to the office and what that means for working moms. Let's get a historical perspective here, Beth, How is this different than it has always been for working moms?
So I think, you know, it's always been the juggle, right, it's always but there was no flexibility, so you had to you had to be at the office nine to five and you kind of had to be available for twenty four to seven. And this is I should be clear, this isn't for women really climbing the corporate ladder, right, And a lot of women then chose, you know, either you opted out, it was too hard, you couldn't make it work, or you know, you just kind of slugged it out you thought through it.
And I think, you know, we know, even even in.
Households where both both you know, husband and wife are really but you know, partners are both working and in really competitive fields, very demanding fields, it's still women who end up doing more of the household work.
So I think that hasn't changed.
We've seen that men have definitely taken on more household work, but still women are doing more the majority of it or.
More of it.
So you know, I think here we people thought working from home maybe could be a solution, and it really has helped. Like we we know, this research shows us that when women can choose how and when they do their jobs, that is a huge tool in closing the gender cap.
When companies are able to accommodate working moms. How does that help them?
Well, First of all, turnover is a huge issue. Right, If you can retain your employees, that's a big deal, and I think it it also. I mean, just because someone who's working from home doesn't mean they aren't as dedicated and or working as hard as anybody else. So, you know, I do think being able to keep these incredibly hard working women in the workforce is.
A boon for everybody.
And figuring out a way to do it that works for them, I think that also does go a long way in terms of retaining employees. Right, It creates a lot of loyalty if you can be flexible.
What are some of the other responses that you have seen from working moms? How are they handling this? How do they manage?
Yeah?
So I do think this is this is a big thing where before I think a lot of women might opt out, Right, we did see that. I think that's not really what's happening. Rather than be opting out or giving up or being mommy tracked or whatever you want to call it, I do think that they're sort of saying, okay, fine, if this, if you're not willing to redefine what the ideal worker looks like. Then I'm going to make up my own rules that fall outside the bounds of corporate America.
So they are starting their own companies, they're becoming independent contractors.
We've seen women who are become very senior say I don't want the time jump, right, this isn't for me. And I think, again, that's not necessarily a bad thing. They're going to go on and start their own companies and that's going to let them make up the rules that really work for them.
Do you find more women are also disappointed because they thought that this was going to be a path forward so they can balance their careers and their families, and now it looks like it's just being taken in a way. It's very hard to give a benefit or to provide a flexibility and then remove it.
Yeah, and I would say this is not just for working moms either.
I think a lot of people feel like they were I don't know that the companies have really kind of turn the tables on them in the sense that this was something that they were being told worked and kind of plan their lives around it, and then it was something that was withdrawn. So I don't think that's actually just for working parents. I think that's a huge issue for everybody that they kind of got used to working.
This way, they did it well, and now.
I think there is some some resentment that this is something that's no longer an option for them.
Any chance it's going to come back. I know you don't have a crystal ball, but.
I do think to your point, I do think there will be a generational shift at some point. No, and again, I don't think this is like never in the office, right. I think this is in the office when it makes sense, not just to tick a box.
Right.
So I think there there's nuance here, and I'm hopeful that as we see a new generation to take over these roles, these top roles in corporate America, maybe they can figure it out.
Bethco It is a Bloomberg Opinion columnist covering corporate America and coming up how one senator's block on military promotions may put a stain on the entire Senate. Don't forget We're available as a podcast on Apple, Spotify or your favorite podcast platform. This is Bloomberg Opinion. This is Bloomberg Opinion.
I'm Abe Morris Republican Senator Tommy Tubberville has a block on military promotions for eight months, in counting a protest move on his part, pushing back against the Pentagon's policy of paying travel expenses for military members seeking abortions. Even as members of his own party are criticizing him for this, Senator Tubberville says he won't budge.
I'm still dug in, you know, I'm you know, I ran on as a pro life candidate. My state's pro life.
But while responsibility for this falls on the senator and other Republicans, what about Democrats. Let's bring in Bloomberg opinion columnist Jonathan Bernstein, who covers politics, and Jonathan as always thank you for your time. What does this do to the Senate?
Well, you know the problem with the Senate is that it has run for years on informal norms and procedures. There are rules, but the rules depend on senators sort of agreeing to do certain things that they don't have to do. And what's happened is that that's falling apart over the years. And so that you know the way that military promotions generally are done is that they come to this Senate has to confirm them for a general to become a you know, one star general to become
a two star general. And what happens is they all come over from the President and the Senate processes them through committee, and then one day the Majority leader says, or the chair of the committee says, you know, I want sent to confirm the following eight items. And they do twenty forty sixty of them at a time. It takes two seconds. They're done. But if somebody objects and forces them to do each one individually, they each take hours of Senate floor a time. And there's no rule
that says you can't do it. It's within the Senate rules to do what Taburvill is saying. But the Senate basically can't work if everybody does it, you know, takes full advantage of what they can do under the Senate rules. And because of that, it means that the Senate doesn't work the way that should for each individual senator.
Do appearances matter in a situation like this? Would this move the needle on election day? Does it send a message to foreign countries? How do appearances play out here?
You know, I doubt if it makes much of a difference for elections it does. You know, The thing is it may not actually affect voters. However, politicians are paranoid. The only question is what are they paranoid about? And no politician likes to be in a situation where they're not supporting the troops. So, you know what, it actually cause somebody to vote against a Republican senator against a senator because this is probably not would a senator feel
that they were in danger? Very possibly? Yes, So in that sense it certainly could matter. I don't know. In terms of foreign affairs, I would say that, you know, the United States has enough trouble with convincing our allies that were a serious country after four years of Trump before this, and the possibility of Trump coming back that anything that sort of adds to hey, wait, we can't pass our appropriations bills, we are threatening a government default.
We can't promote military officers certainly can't help.
There are also those who say that this doesn't matter at all. Military convention just fine without all of these promotions. Your point is the bigger picture of how the Senate operates.
Yeah, you know, the Senate is not a simple majority party rules institution. The way that the House is Senate has evolved to protect individual senators. They call them the rights of individual Senators, but that that it protects individual states interests as well or the interests of people who live in particular states, so that you know, if something's it's a huge country, right, it's three hundred and thirty some million people, and it's hard to represent the small
interests within that. And one of the advantages of the Senate and having individual senators have so much influence is that they can, you know, if the Department of Transportation passes a rule, or if there's some the majority party has a piece of legislation that would have an adverse effect on maybe something that happens in a corner of Arkansas or a corner of Alasco or a corner of Montana. Their senators can stand up and say, I object, let's
work it out. And something that they have sort of that their constituents have an intense interest in, they have a champion there who has the ability to stop everything and say, let's take into account the weird effect that this good rule overall is going to have on my state. And there's a lot of advantage to that. It's not worth you know, the malaportionment in the Senate, but there's still a good advantage of that. You can't do that
in the House. If one member of the House, because it's a four hundred and thirty five member body, objects, they can't. There's nothing in the rules to allow them to do that. If senators use that power to shut down something that they have no chance of bargaining for. Tuberville's trying to get an abortion rule changed that he's in the minority on, and it's not a minority because he has something in particular people in Alabama. You know
this effects Alabama particularly. This is something that's a national debate, and you know, the majority of the Senate supports the policy, the president elected by the whole country supports the policy. And Tabarilla says, no, I'm going to use my power, which is really there. The justification for the power is to do something to protect particular interests. I'm going to use it so the minority will rule over majority, and
it can't work that way. So if they insist on this, then the next step is for the majority of the center say well, we're going to change the rules, We're going to change procedures. We're not going to allow this to happen, which would take away the ability of senators to use this for a positive what I think a lot of people would say would be a positive center.
And we are talking with Bloomberg opinion columnist Jonathan Bernstein about the risky nature of Senator Tommy Tubberville's hold on military promotions and its impact on how the Senate operates. And you were just explaining about the domino effect that this has as they try to move forward on other issues, It tangles everything up. Why can't Republicans just do something about this one issue.
Yeah, the problem is that and Tuberville is the one who's done this, He has a couple allies might leave Utah. But for the most part, most Republicans think this is a bad idea. Is that while he's doing it with military promotions, the rest of the party is doing the exact same thing on everything else other than military promotions.
Because there are hundreds of executive branch nominations and quite a lot of judicial nominations which also go through pretty quickly, usually district court nominations, judges, non cabinet, non controversial executive branch, though those also go through usually by unions consent or on a voice vote very quickly, no problem. But the Republican Party is holding them up and forcing the Senate
to spend a lot of time on each one. Not because they object to the particular nominations, although they do in some cases, which in my view is fine they should oppose those things, but on a lot of things which eventually go through by one hundred to zero vote or ninety to ten vote, they're forcing the Senate take a lot of time for each one, basically just to
throw a wrench into how the government operates. And the problem for Republicans is if they accept the principle that people shouldn't do these blanket filibusters, then there's they perceive a slippery slope to the Democrats then saying well, okay, we're going to change procedures to get the military nomination
promotion through. Let's change the procedures to get all of our judges through and the executive branch things through quickly without using a lot of and that when Republicans lose that way of using the rules, which they shouldn't be doing in the first place in my field, so you know, fifty six fifty seven, fifty eight senators from a party that also has the presidency and majority of the House. We're going to get rid of the filbuster and it's going to wind up looking governing about the way the
House does. And you know, if you look over at the House these days, that's not exactly a promising idea.
All right, Jonathan, we're going to leave it. Thank you for your time. You're listening to Bloomberg Opinion. I'm Amy Morris. In the decade before the pandemic, the before times, the amount of office space per worker in the US was already shrinking steadily. So fast forward to today, twenty twenty three, offices are still standing empty all across the country, and it looks like office space may actually still be shrinking.
Bloomberg Opinion columnist Justin Fox covers business and economics, and he joins us now to explain what is going on, what is driving the shrinking office space at least before the pandemic and then after two different things.
Before the pandemic, a lot of it was just this sort of mismatch between where the job growth was and where the office space was. Now, though some of those same places, like the San Francisco area, have a ton of empty office space in New York as a fair
amount too. And yet, you know, it's a little hard to tell because most of the measures we have of office space per worker just based on sort of macro measures of how many people work in the sectors that are kind of the office, and when you compare that to how many of those people are working from home most of the time, it may be that you know, per hour that you're in the office, there's more space, but it also means, like on Wednesday, everybody's even more
crammed together than ever. So it's this fascinating phenomenon that there's a bunch of empty space available out there and lots of companies saying, oh, we want to lure people back into the office, But there doesn't seem to be much interest so far, at least in trying to lure people back into the office by saying, welcome to this luxurious new space where you have an office where you can close the door or whatever.
And so, even though employers want more workers in the office in this post pandemic era, the square footage space is going to wind up being smaller.
It's a little hard to measure, but yes, that seems to be the trend. Like I got this chart that's in my article from Costar and talking to guy at Costar, you know, basically saying that all new leases that are being brought in, companies are taking about twenty percent space than they had before. And again in some cases there are twenty percent fewer workers coming in. But at the same time there if these companies are trying to push more people to come in, it's interesting that they're taking
smaller space. I mean, one of the things that's happening is there's this belief that wow, if we have really snazzy office space in the newest, shiniest building, that more people will come in. It's not that they're paying a lot less money for their office space. It's this sort of weird thing going on in the market right now where companies are paying top dollar to be in a certain buildings, especially here in Midtown Manhattan, and then just
totally ignoring others. And I think that's it's just calculation. They're like, well, maybe if we're in the nicest building, that'll be good and it'll impress our customers and whatever else.
I like, how you put it, it's a weird thing going on in the market right now, and there is this trend that it's going to continue at least for a while. I'm just wondering if this is how it's going to be.
I talked to somebody from Leaseman, which is a company that basically just surveys workers, ask them a whole bunch of questions about their work experience and how they get things done, and then calculates a couple of indexes based on that. And then companies, you know, workplaces that have high indexes can put a sticker on the door basically
and say we're a leastman plus workplace. And they I had seen that they had done stuff in the past, you know, because everybody complains about open plan offices, and they just found if you looked at their ratings and whether it's open plan or private offices, there's just no correlation at all. It's like some people really like their experiences in open plan, some people really hate their experiences in mostly private offices. And it's the same way with
office space. It seems there's just no pattern at all in how much office space you get versus how happy you are with work and how productive you are. And you know, and there are other there been, you know, experiments done about whether being too crammed together makes it harder to concentrate, and so there's some evidence that it
can get problematic. But I think for the perspective of companies who are trying to figure out, oh, what's the best situation, there's not any really clear signal telling them to stop shrinking office space. And I think there are other Like in Asia particularly, people already make do with left space per worker than we're accustomed to in most of the US.
Justin Box is a Bloomberg opinion columnist who covers business and economics, and that does it for this week's Bloomberg Opinion. We're produced by Eric Mullow, and you can find all of these columns on the Bloomberg Terminal. We're available as a podcast on Apple, Spotify or your favorite podcast platform. Stay with us. Today's top stories and global business headlines are just ahead. I'm Amy Morris, and this is Bloomberg