Taps Coogan – November 26th, 2020

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Wolf Richter, creator of the great site Wolf Street and resident of San Francisco, recently spoke with Howe Street’s Jim Goddard about the widely reported exodus from major metropolitan areas like San Francisco. Mr. Richter says that the exodus is real, at least for San Francisco, and points to sagging rents and real-estate values in San Francisco versus spiking values elsewhere, the exodus of major employers like Charles Schwab to more competitive states like Texas, and the increase in work-from-home.

Also of note, Mr. Richter describes how work-from-home has become a significant cost reduction strategy for companies: reducing office costs, middle management, and employee services like food and facilities. In certain ways, the structural cost reductions associated with work-from-home are reminiscent of the automation driven cost-cutting push that followed the Global Financial Crisis and contributed to the hollow labor market recovery that ensued.

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