Edward Glaeser: prediction

Transcript context

…That sounds like a very Harvard scenario, having to argue over football or Kant, those two topics. [laughs] Are you predicting lower taxes over the coming decades in places like California and New York, specifically because of how remote work sets a sort of maximum bar of how much you can tax highly productive people before they will just leave? This is a great question. It’s a central issue of our day. Here’s how I think about it. In part, it’s why I wrote my recent book, Survival of the City. It’s because I was worried about this. Two things happened simultaneously. One, as you correctly say, Zoom has made it easier to connect anywhere. I don’t think that Zoom is going to cause our tech startup currently in Silicon Valley to say, oh, you know what? We’re just going to go home to our Orange County suburban homes and never meet live again. I think that’s a low-probability event. But what seems to be a perfectly high probability event is saying, “Oh, we can Zoom with our VCs, we can Zoom with our lawyers. Why don’t we just relocate to Austin, Texas, not pay taxes, or relocate to Boulder, Colorado, so we can have beautiful scenery, or relocate to Honolulu so we can surf?” That seems like we’ve made the ability for smart people to relocate much easier, even if they’re going to keep on seeing each other in the office three or four days a week. That collides with this very fervent desire to deal with festering social inequities at the local level. Be this limited upward mobility for poorer people, be this high housing costs, be this the rise of mass incarceration and police brutality towards particularly minority groups. There’s this progressive urge which runs up against the fact that the rich guys can run away. If your model, which says, “Oh, the local governments are going to realize the rich guys can run away, so they will seamlessly lower tax rates in order to make sure that they attract those people,” that’s running up against the fact that there’s a whole lot of energy on the progressive side, which says, “No! Massachusetts just passed a millionaire’s tax. For the first time ever, we have the possibility to have a progressive tax, which feels extraordinarily dangerous given this time period. ” I think we may need to see a bunch of errors in this area before we start getting things right. We went through a lot of pain in the 1970s as cities first tried to deal with their progressive goals and rich people and companies ran away, and it wasn’t until the 1980s that people started realizing this was the path to local bankruptcy and that we had real city limits on what the locality could do. You cited research on the survival of the city, which said that firms like Microsoft were much less willing to hire new people once they went online because of the pandemic. What do you make of the theory that this is similar to when industrialization first hit and we hadn’t figured out exactly how to make the most use of it to be most productive, but over the long run, somebody will do to remote work what Henry Ford did to the factory floor and in fact, just make it much more effective and efficient than in-person contact just because we’ll have better ways of interacting with people through remote work, since we’ll have better systems? It’s entirely possible. I never like betting against the ingenuity of humanity. On the other hand, you need a lot of technology to override 5 million years of evolution. We have evolved to be an in-person species, not just because we’re productive and learn a lot face-to-face, but also because we just like it. A world of hyper-efficient remote work where you basically are puttering around your apartment doing things very quickly and getting things done, doesn’t sound particularly joyful to me. Workplaces are not just places of productivity; they’re also places of pleasure, particularly at the high end. Remember in 2019 and earlier, Google, and Yahoo, the companies that should have had the biggest capacity to do remote stuff, weren’t sending their workers home; they were building these paradises for high-skilled workers, stuffed with foosball tables and free snacks and whatever else they had in these giant campuses in the Google lex. So they were certainly betting on the power of face-to-face and creativity rather than on the ability of remote work to make everything work. I think the most reasonable view, let’s say that of Nick Bloom of Stanford, is that for those types of workers, 20% of your week being hybrid, maybe 40%, seems quite possible. That seems like a thing, particularly for workers who have families who really value that degree of flexibility. But fully remote, I guess that’s a pretty niche thing. There’s some jobs like call center workers where you could imagine it being the norm, but in part, that’s just because it’s just hard to learn the same amount remotely that you do face-to-face. This came out both in the earlier Bloom study on remote call center workers in China and on more recent work by Natalia Emmanuel and Emma Harrington. Both studies found the same thing, which is in these call centers, are plenty productive when they’re remote, but the probability of being promoted drops by 50%. The entrepreneur may make it very efficient to do things in the short run remotely, but they’re going to turn off this tendency that we have to be able to learn things from people around us, which is just much harder to duplicate remotely.…

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