Transcribe your podcast

In which the theme of the program is things this economy is doing to get through the pandemic and what it might look like on the other side from American public media, this is marketplace. In Los Angeles, I'm Kai Ryssdal. It is Tuesday, today, the 15th of December. Good as always to have you along, everybody.


We are going to do a couple of stories today as Korona Vaccines start to roll out about getting back to the office, what it's going to look and feel like. That's coming up from Amy Scott in a minute or five. But we're going to get going with what might be in store for commercial real estate in the medium to long term, as companies do those. Ought we go back or not?


Cost benefit analysis. Marketplace's Rebecca Shaw starts us off.


Talk about dodging a bullet. Dean Maier was just about to sign a lease on a new office space for his company back in March.


We decided not to pull the trigger on that mayor as president of Code Green Solutions, a consulting firm. Like a lot of corporate America, everyone there's working remote.


Now, we do miss the collaboration and innovation that happens.


So they are going to get that new office space. But just later, sometime in 2021, at least at first, it will be smaller, 25 percent smaller.


He thinks how many companies are going to downsize their footprint like this.


We've surveyed thousands of employees and users of commercial properties.


Christian Baldwin is with JLL, one of the world's largest commercial real estate services companies.


Most are telling us that they actually want to return just not every single day.


So they might not reduce the physical footprint of an office so much as the time spent there that would soften the blow to commercial landlords. Jonathan Miller is president of Miller Samuel. He says those landlords come in a lot of different shapes and sizes.


They could be a publicly traded company all the way to a private individual or a family.


And a lot of those landlords have debts to pay. On average, commercial real estate is financed mostly by debt, 70 to 85 percent. The rest is in equity, according to Brian Graham, partner at Clarus Group.


If losses pile up because, you know, rent falls or things go vacant, that's don't get paid back, it's hard for me to imagine that every lender is going to escape unscathed.


Half of those lenders, by the way, are banks. But this whole question of how big offices are going to be is a long term problem. Landlords, tenants and banks are still trying to deal with the short term right now, like will that restaurant on the corner survive, let alone pay rent in New York. I'm sorry, venture for marketplace.


One vaccine is already being distributed. A second might be approved by the end of the week. That is in this country, the richest in the world.


In the poorest countries.


There are estimates vaccines might not be available until 2024 and that, as Marketplace's Jasmine Gars reports, has some global health activists calling for waivers on intellectual property protections for those vaccines and diagnostics.


India, South Africa and Kenya have asked the World Trade Organization to allow pharmaceutical plants in the developing world to manufacture patented drugs without having to worry about lawsuits. Christopher Snyder, an economist at Dartmouth University, thinks that may not be the most effective route.


Vaccines are notoriously difficult to reverse engineer. So in a sense, working around the patent is not necessarily going to be that helpful.


But for some countries it might help. Dean Baker is senior economist at the Center for Economic and Policy Research.


Many developing countries, of course, don't have sophisticating manufacturing facilities. Countries like India, countries like Brazil do.


The United States, Britain and the European Union have repeatedly rejected the proposal at the WTO. Juliette Barnes Weiss is the executive director of the Global Health Care Innovation Alliance Accelerator. She says there's an incentive for wealthier countries to make sure poorer ones get the vaccine.


Nobody sees until everybody's safe. So as long as the virus is circulating, everybody is still in danger because we live in such a connected world.


There is precedent for relaxing intellectual property rules. In 2001, in response to the HIV AIDS crisis, the Doha Declaration gave low income nations the right to import and produce generic versions of patented medicines.


I'm Jasmine Ghast for Marketplace on Wall Street today as we hit the halfway mark on the last month of this interminable year.


Oh, look, everything's fine. We'll have the details when we do the numbers.


This has not been I think we can all agree, a great year, but of the few bright spots, one of them is the way people have been helping each other out. And that brings us to go fund me. According to a report the company released last week, 625 million dollars was raised for covid relief in the first six months of this pandemic. And donations around racial justice have been huge as well. Tim Goodwin is the CEO of Go Fund Me.


Tim, it's good to have you back.


It's a pleasure to be back with you. Thanks.


So when we had you on in March, number one, you had just gotten this job at number two. We had just sort of stumbled into a global pandemic, as it were. And and what you were seeing as you related at the time was PPE and support from medical staff. Was a lot of the drives on your platform. What are you seeing now nine months into this thing?


Yes, I mean, it's been an incredible year of giving in response to the amazing amount of need that we've seen right now. One of the biggest trends is a lot of fundraising for rent relief and monthly bills. And unfortunately, we see that kind of accelerating as we get deeper into the winter here.


You know, it's funny, we have a guy we talked to you up in Portland, Oregon. We had him on about a week and a half ago. His name is No Care, Neal Conan. He's a bartender. He's out of work. His landlord has said starting in January, you need to pay for rent and he's not getting enough unemployment money to pay. And I had a bunch of people reach out to me after Neil's interview aired and say, in essence, look, where's his go fund me.


And I wonder what you think about go fund me as the de facto social safety net at a time when so many people are in need.


Well, you know, we are really sad that so many people are in this situation and frankly, wish that they didn't need to use products like ours to do something like this. That said, there is the need and there is a gap in the safety net. And so we've tried to do everything we can to make it easier to use go fund me. But as you say, the underlying set of circumstances here is tragic.


I wonder. All right. So this is a bit macro, but, you know, go with it. I wonder what you think about go fund me being in a position to be, in essence, redistributing wealth in this economy.


Right. That's traditionally a government function.


That is a big question. I think it's really important to stress that we are not a substitute for major government and social programs. We are a complement and we provide something that is distinctive. So when you receive funds, as you should, when you're in need from a government or a major institution, that's an institutional relationship. When you receive support through Funmi, you're getting money from individual people who either know you or for whom your cause resonates and want to help you.


And that has an emotional component to it. That's different from what happens in a governmental institutional relationship.


It's funny, you know, that emotional connection, it's it's especially significant, it seems, in a time like in times rather like these.


Yes. I mean, there are many of us who are suffering in the sense that we're at home and we haven't seen our families and so on. But we are doing fine economically.


You know, we're just one way that you can kind of address this fabric of society that is still very strong to be able to help people in need when you have the ability to do so. I'll offer a statistic. You know, over 70 percent of the donations we've seen this year are under 50 dollars and many of them are much smaller. And many of those people who are donating don't necessarily have very much, but they really, really want to help.


And it's really important for people to understand that this activity is occurring at a time when so many people are under stress.


OK, so let's take it out of the present moment here. And look, I don't know, a year from now, in theory, we're past the pandemic. In theory, people have vaccines. In theory, economic activity is back to normal. What do you anticipate for go fund me in in a year?


Well, I hope all of the things that you just said are true very much for us. There are really three simple things that we are trying to do. We're trying to make our existing products ever better. Then we're trying to think through what other products can we provide people. And the third one is global. We're in 19 countries today and we want to be available as broadly as possible. People's lives are complicated and they need help and support over difficult situations, but also for good things.


And we'll be there to help them with anything that they need to gather support for.


Tim, the CEO of Go Fund Me. Tim, thanks a lot. I appreciate your time. It's a pleasure. Thank you. If you were lucky, you missed it, but for about an hour or so yesterday morning, Google had a big global outage and for all the docs that people couldn't get into or Google classroom that kids couldn't get into. There were a whole bunch of Google employees working the problem from home.


Most of parent company Alphabet's, 100000 plus people have been remote since March. And the company now says that nobody's coming back until next September. And even then, it's only going to be a partial return. Google is going to test a flexible work week, at least three days in the office, the rest at home.


Other companies have announced something similar.


So Marketplace's Amy Scott took a look at how that could change what offices look and feel like before the pandemic.


Janet Pogue MacLaurin worked full time in the Washington, D.C. office of Gensler, an architectural and design firm. Now that she works at home, she doesn't miss the hour long commute, but she does miss the self serve coffee bar.


It's the place to run into employees from all three of our floors and just casually catch up.


It's McLarens job to understand how important those interactions are. She's head of Global Workplace Research at Gensler and she says for a lot of workers, a hybrid model is the future.


So they're going to be doing some of their focus work at home and they're going to be coming into the office to do more of that group work, to meet with their teams and connect with each other.


And that's going to change office design, says Cali Williams Yost, founder of the Flex Strategy Group. Goodbye Personal Workstation with your posts and bobbleheads and family photos. Hello, hotel desks. You have to book in advance and leave clean for the next user.


There's some very creative ways for people to be able to have their own space, rollerball lockers and things that they can can keep their personal items on site.


But will you need that as much if you're only spending two or three days in the workplace?


Dan Sharbel is a workplace consultant. He says all that personal stuff is about making your office feel more like home.


Once you start removing time spent in office.


The need to make your office more part of your life is is being slowly diminished, as is the line between home and work.


I'm Amy Scott for Marketplace.


You know who else is working from home? David Brancaccio hosting the Marketplace Morning report from a little studio down in his basement. Check it out. Everything you need to know to start your economic day. Coming up and initially doing some Amazon deliveries, some window cleaning business assets of doing what it can to make ends meet when he can't do his actual job.


But first, let's do the numbers. Dow Industrials up three hundred and thirty seven points today. One and a 10 percent, thirty thousand one at ninety nine. The Nasdaq, eight hundred and fifty five points, about one and a quarter percent, twelve thousand five nine five.


The S&P 500 picked up 47 points, one point two percent there, thirty six and ninety four.


Quick sidebar to Sabry piece. Not all commercial real estate is created equal. Yes, office space, hotels and retail have all taken a whack. But according to a recent report by Deloitte, industrial real estate is booming. Prices are up seven and a half percent over last year. Now the category of CREB commercial real estate that Deloitte predicts is going to keep going. Well, cell towers, that's the business American Tower Corporation is in.


Shares closed up to 10 percent. They bond prices down. Yield on the 10 year note held steady, basically zero point nine or zero percent.


You're listening to Marketplace. This is Marketplace, I'm Kai Ryssdal, Adidas, the sportswear company, maybe it's Adidas, I don't know anyway, says it's considering a sale of Reebok, another sportswear company it bought for about three billion euros almost 15 years ago.


The deal is not done selling. It's just one of the options Adidas says it's thinking about. But we got Marketplace's Andy Eulo on this story. Number one, why now for the sale? And number two, who might be in the market?


We talk a lot about mergers and acquisitions and cup for an M&A lawyer in New York says there are basically two kinds of financial buyers, which is like private equity firms, that kind of stuff.


And then the other is this kind of deal, which is a strategic deal.


When Adidas bought Reebok 15 years ago, it was trying to compete with Nike in the U.S. and wanted to leverage that brands established relationships with professional sports leagues.


After a reboot in 2016 that ushered endorsement deals with singer Ariana Grande and rapper Khateeb, Reebok turned a profit in twenty eighteen, but the success was short lived.


Now, Shawn Grain Carter at the Fashion Institute of Technology says there's so much competition in the sportswear and athleisure space that Reebok has become a drain on Adidas resources with so much of an opportunity to sell so many different types of products in this category.


You've got to have sharp marketing so that your customer is really clear about why they should remain loyal to you and continue to purchase your particular product, she says.


Reebok will have to invest in research and development to stand out from the others. Steven Shapiro at the University of South Carolina says there's still considerable brand equity there. Reebok just has to decide exactly what it wants to be.


I think there is an opportunity for them to be successful and maybe more of that niche market and not have to feel that that Reebok's trying to compete as they historically were trying to do with a Nike or an Adidas.


Adidas said the sale of Reebok was one of the options it was considering as part of a five year strategic plan it's set to present in March. I made Eagler for Marketplace. There are few things more important in this economy than jobs, jobs mean people have money, people having money means they can buy things. People buying things means companies can make and sell more things. Companies making and selling more things means companies hire more people.


And so the cycle repeats. We know jobs matter.


Politicians know that we know the jobs matter. And so they the politicians play to the crowd. But those promises of all those new jobs those politicians are going to create, what do those numbers come from anyway?


Marketplace's Kristen Schwalbe has that one. We've heard all the promises.


My plan will help create at least five million, five million new good paying jobs, more than six point six million new jobs, at least 10 million new jobs.


One hundred and fifty thousand jobs. I will be.


The greatest jobs president that God ever created, I tell you that being able to promise new jobs is the most tangible benefit really a politician can offer.


Sarah Hinkley is a labor economist at UC Berkeley. She says, we love hearing about jobs because you know their jobs and politicians love promising jobs because it shows they care about working people and makes it easier to tap into our tax dollars to get things done.


And so a lot of times that jobs promises are made in order to justify spending public money.


But where do these jobs numbers come from? John Haltiwanger measures labor growth at the University of Maryland. He says job forecasting starts with a huge web of government data that goes back years.


We know exactly how many jobs have been created. We know where they've been created. We know what industries they've been created. We know what wages they're getting paid.


Economists take that data and combine them with research on how companies and people spend money. Then they plug them into models.


It's a very hard thing to do. I mean, so the challenge is to be able to isolate the particular policy and its impact.


Let's say a city wants to attract a new hospital by offering years of tax breaks and subsidized loans, and in return, the town gets jobs. How many? Bettany Jones runs those numbers at her firm, inclusive economics.


It goes basically three levels.


So you have your direct impacts, construction work and hospital staff.


And then the second layer is what are the supply chain jobs, selling medical equipment, surgical supplies, pharmaceuticals.


And then the third level is what is the impacts of the workers who are spending their paychecks?


Housing, restaurants and retail forecasting can be pretty precise for traditional projects, but for new industries. Here's President elect Joe Biden before the election talking about moving the country to electric cars.


This would mean listen to me now, one million new jobs. The American automobile industry, one million jobs says this is where the math can get fuzzy.


Producing batteries for electric cars relies on evolving technology, so there's not as much jobs data and eliminating cars that run on gas will lead to job losses. So to make a net gain, Biden needs to create incentives for Americans to buy electric cars and for domestic carmakers to use batteries made by companies in the U.S. instead of China.


So you have to sort of carry the policy objective and policy design to the economic modelling in order to sort of understand not just how many jobs are going to be created, but what sorts of policy interventions are going to be necessary to create those jobs.


And it's not just about quantity, it's about quality.


Are they going to pay enough to support a family? Are they going to be jobs that give workers more voice and power in the workplace? Because those are the things that really matter to people's lives.


But those answers could be years off. After the factory is built, workers are hired and electric cars are coming off the assembly line. Here's UC Berkeley, Sarah Hinkley again.


One of the shortcomings of the whole conversation around job creation is that we don't often go back and look to see how accurate the models actually were. You know, you bring in the company and then everyone sort of forgets about the promises that were made.


Not everyone just ask the taxpayers of Wisconsin. Their governor famously agreed to give billions of dollars in incentives to Taiwanese company Foxconn to build a state of the art factory and create 13000 jobs that would inject millions of dollars into the local economy. Three years later, almost no progress. And Wisconsin is fighting to rework the deal. I'm Kristen Schwabe for Marketplace. These are just lousy times for commercial aviation. That was the message on this program yesterday from the CEO of United Airlines as he was trying to make the case for more government bailout money.


And it's the message of the flying public every day as the number of people passing through TSA checkpoints is still something like 60 percent below where it was last year on this date. So for today's installment of our series, My Economy, how one commercial airline pilot has been making ends meet on the ground.


My name is Nick Giffard from the United Kingdom in the North leads. Before the pandemic hit, I was a 320 airline captain flying for a Belgian airline living in Brussels, flying passengers around Europe.


When the virus coronavirus first hit it pretty much immediately through the downturn in passenger numbers and a number of contractors were pretty much finished immediately, spent several months looking for any kind of work at all and potentially doing some Amazon deliveries, some window cleaning business, etc.. Then I got a job with the National Health Service on a blood donation unit to take plasma from people who had suffered from coronavirus and using the antibodies in their blood to give to critically ill people in intensive care.


Financially, it's been a huge hit, probably an 80 percent pay cut from being an airline captain to the role I'm doing now. There's a lot of pressure. I can no longer afford the mortgage on the house. A house has been on the market for a few months now. No offers, unfortunately, so far, but perhaps in the New Year. I'm certainly more optimistic now looking looking into 2021 with the vaccines. I think there's a good chance travel will start to recover and I can start flying again, hopefully.


I was Nick Giffard over in Leeds, England, courtesy of our colleagues at the BBC. Tell us what you how your economy is doing. There's a place you do that at Marketplace, Doug. This final note on the way out today in which coronavirus testing might be coming soon to an over-the-counter pharmacy near you, the FDA has given emergency use authorization to the first test you can buy without a prescription. It'll cost you 30 bucks available in January from the Australian firm.


That makes it results available in 15 minutes.


Sign me up. All right, we're going, but here is your Tuesday moment of economic context in which I will note you have not yet heard tell on the program today of whatever it is Congress is thinking about doing on a relief package, because honestly, at this point, who knows?


Right. But here is a related item from the U.S. Chamber of Commerce, their quarterly small business index, lots of data. And the thing here are two points. Seventy four percent of all small business owners say they need more help from the government to get through this pandemic.


You look at minority owned businesses, it is 81 percent of them are digital and on demand team includes a folkmoot, Tolu Olga Axeman, Eric Philips, Brian Ranaan and Tony Waggoner's Tsarnaev. As is our executive director of OnDemand. I'm Kai Ryssdal. We will see tomorrow, everybody. This is EPM.