AI office boom and CEO mandates

NP R . This is the indicator from Planet Money. I'm Waylon Wong. And I'm Darryn Woods and joining us today , a man who is cooler than the other side of the pillow , one Cooper catch me cam. Thank you for having me. Yes, I'm wearing three Fedoras right now if you can't see. Cooler than cool. Now Cooper, you're here right on time because today is indigenous . It's the day of the week where we talk about our favorite numbers from the news. And today we're covering GLP one's and women's employment . Office space in New York City so hot right now. And is your CEO a narcissist ? All of that after the break . It's an indicators the that week Whale and Wong, why don't you go first? My indicator is twenty six point nine percentage points. That is the increase in the employment rate for women who are not working and then take GLP ones to lose weight. And this number comes from a new working paper by Harvard economist Rebecca Diamond. twenty seven percentage points. That's quite a result. Yeah, I mean, the numbers definitely made a lot of waves among economists this week and there was some online debate about whether these numbers are too high. Okay, so how did Rebecca get to this number? So she used a dataset of about ten thousand US residents and she studied two groups. One is women who have started taking a GLP one to lose weight , the other is women who want to start taking a GLP one but have not yet done so. These two groups are otherwise similar in terms of their income, employment status, their body mass before treatment, and some other factors. And so I guess the issue is whether or not there are kind of unmeasurable factors that might mean that the women that end up going on these GLP ones are different from the ones who didn't. Yeah, I mean, and this was not like a randomized control trial, right? This was two groups of women who have self selected to say we're interested in taking GLP ones to lose weight. But even when you account for that , the analysis produces some pretty dramatic results that people are looking at. Like that twenty six point nine percentage point increase in the employment rate that is a year and a half after treatment. Okay, so this is maybe an unsurprising but still depressing commentary on how society views women of different sizes. Yeah, and there's a pretty rich body of economic research out there showing that heavier women work less and earn less. It's of course, trick, ier to pin down how much of that disparity is due to body weight discrimination. Repa Diamond, who is the economist at Harvard, who did the study, says her results point to something called a first impression ob esity penalty. So if you think about a woman who isn't working, she starts taking a GLP one and loses weight and then maybe she makes a really good first impression at a job interview, you know, a better impression a woman of similar qualifications who is in a larger body. This seems to be a real flesh in what I'm sure will be a rich body of research to come. Oh, for sure. Super interesting , especially given the effects are so large and I will be watching what research comes out on GLP ones and how it affects society to come. Now Cooper, I'm super interested in your indicator. It's about the city that I live in. And also me and also you . My indicator is one million. That's the square footage that AI companies have leased in both of our cities, New York City so far this year. We're only in June, but we've already outpaced the total amount of office space leased in all of last year. I am having such whiplash because I feel like it was just yesterday when we were like, Tumbleweeds are blowing through the empty office spaces in New York. Like no one's in the office. Yeah, so we're actually in Prairie Country, New York now . So tons of companies did can their offices during the pandemic. There was this whole era of people sending workers home, people were remote, they were hybrid, or the company just went under . And the peak actually happened way later than I expected in twenty twenty four when fifteen percent around of office space sat empty in New York City. So not that long ago. Yeah, there were these think pieces about what the empty office space would mean for cities taxes . I imagine local leaders must be happy right now. Yeah, office buildings pay a lot of money in property tax a rep,ort from twenty twenty three says roughly ten percent of the city's taxes come from office space . So during this year of high vacancy, there was concern about a doom loop where empty office spaces would crash property tax revenue force, budget cuts that ruin the whole city and everything falls apart and everything's horrible. Okay, but we did not get the doom loop is what you're saying. Nope, everything's perfect. No, I'm specifically talking about New York here. So, but across the country, the commercial real estate revivals a little more fragmented. But an important thing to note , this AI boom seems to be saving New York real estate for now, but AI is the boomiest boom there is. No one's sitting back and saying problem solved to commercial real estate because there's a chance the better AI gets, the less companies will actually need people. I thought you were going to say the bad scenario is that like part of this AI spending boom is going to be a bubble and then when a bunch of AI companies go bust , then they're not going to need that office space anymore. And we're back to the doom loop. I know. It is certainly front of mind. Tech stocks dipped globally this week. Analysts are saying this could be the beginning of the end, the beginning of the bubble bursting. And the city comproller said quote, I feel like we have a freight train coming down the tracks . In a good way? I mean, it's a win for now, but it's also kind of a hold your breath moment. So thank you for that really interesting indicator Dar,ren Wood s, what do you have? Mine is quite related, which is all about why we're being asked to come back into the office all around the economy . And my indicator of the week is two hundred fifty nine and that's how many CEO 's were analyzed in a recent study on remote work. The study concluded that CEOs who appeared more narcissistic were more likely to resist remote working. Interesting . Okay, so this is like we're like psychoanalyzing CEOs now. Yeah. And we've talked about remote work on this show before. The last few indicators of the weeks over the last month we've talked about it. We're talking about the downsides of remote work, you know, things like worse mental health, hesitance to hire junior workers . But this paper just published in an organizational behavior journal shows another side of the debate , namely that mandates to come back to the office full time can be more about the boss's ego than about productivity. Darian, what if the boss is just lonely? Yeah, what's someone think of the bosses? Lonely and maybe in need of someone to lord over. Maybe there's a boss loneliness epidemic. Have you ever thought about that? Nobody talks about it. Now, of course, for some jobs you need to work in person , a construction worker cannot build a house remotely, but for jobs where people can work remotely, the wider body of evidence does not show that always working in the office increases ivity or boosts a company's stock price. You know, when this is mandated, maybe some workers become more productive , but there's a huge hit to worker morale and the company loses staff. Okay, then how does all of this square with the problems in remote work that you identified like the lack of mentorship and connection and that stuff? So I don't think the papers are in conflict. You know, researchers on remote work are coming to semi consensus, like an emerging agreement that hybrid is the best for many workplaces, ideally with coordinated days in the office, maybe two or three days. So this study shows that full time office mandates are on shaky foundations as maybe fully remote on the other hand all the time. Put me back in the office . I want to house every commercial office space . All right, well, thank you Cooper for joining us on indicators of the week. Always fun to see you on this side of the camera. Thank you for having me with my now five Fedoras . I gotta find a pork pie hat . This episode was produced by Angel Carrers with Engineering by Quacy Lee. It was fact checked Corey Bridges and Emma Ferrara, Kate Cannon edits the show and the indicator is a production of NPR