WEBVTT - Ohio Looks for Answers, Workers Call for Benefits 0:00:03.840 --> 0:00:06.920 Welcome to Bloomberg Opinion. I'm Amy Morris. This week we 0:00:07.080 --> 0:00:09.760 look at the latest step in the climate change battle, 0:00:09.840 --> 0:00:13.239 protecting the ocean. It's absorbs about ninety percent of the 0:00:13.400 --> 0:00:19.040 heat chopped by greenhouse stresses so far and also absorbed 0:00:19.079 --> 0:00:21.840 about thirty percent of the CO two that we've emitted. 0:00:22.040 --> 0:00:25.400 So without the ocean, we'd be in a much stickier situation. 0:00:25.520 --> 0:00:29.360 We'll be talking with Bloomberg's Lara Williams. Bloomberg's Alexis Leandis 0:00:29.440 --> 0:00:31.800 joins us with the latest on the housing market. She 0:00:31.880 --> 0:00:35.400 says mortgage lenders are selling homebuyers a lie. And what 0:00:35.520 --> 0:00:39.200 will it take to attract and keep more workers. Bloomberg's 0:00:39.240 --> 0:00:43.800 Sarah Green Carmichael says, maybe don't worry about raises but benefits. 0:00:43.960 --> 0:00:46.680 We're really seeing employees resisting those calls to be back 0:00:46.720 --> 0:00:48.600 in the office four or five days a week. I 0:00:48.600 --> 0:00:51.400 think some of that pressure from companies is really misguided. 0:00:51.520 --> 0:00:53.200 You know, this is not the time to be climbing 0:00:53.240 --> 0:00:55.360 back a benefit that not only costs you nothing but 0:00:55.640 --> 0:00:59.120 actually helps employees be more productive. Let's get started. We 0:00:59.240 --> 0:01:01.440 begin with the rail road system in the US, which 0:01:01.480 --> 0:01:04.600 has had a rough couple of months after several Norfolk 0:01:04.680 --> 0:01:09.160 Southern derailments, one of them carrying toxic chemicals in East Palestine, Ohio, 0:01:09.560 --> 0:01:12.080 and the death of a train conductor this past week 0:01:12.280 --> 0:01:14.440 when a dump truck and a train collided at a 0:01:14.520 --> 0:01:18.120 railroad crossing in Cleveland, Ohio. And well, now we're learning 0:01:18.120 --> 0:01:20.960 more about safety measures that Norfolk Southern says it'll put 0:01:21.040 --> 0:01:25.319 in place while the National Transportation Safety Board continues its investigations. 0:01:25.480 --> 0:01:29.240 Democratic Senator Shared Brown of Ohio says the railroad is 0:01:29.280 --> 0:01:32.839 simply cutting too many corners. They've laid off a third 0:01:32.840 --> 0:01:36.520 of their workforce, they've compromised on safety, They don't the 0:01:36.600 --> 0:01:40.080 workers don't have enough time to do the thorough inspections 0:01:40.120 --> 0:01:42.480 they should do. But there's another part of this story too. 0:01:42.520 --> 0:01:47.000 The railroad itself usually doesn't own those rail cars. Those 0:01:47.000 --> 0:01:50.760 are often private owners, like shippers. So does that make 0:01:50.760 --> 0:01:53.160 a difference when it comes to maintenance and safety on 0:01:53.200 --> 0:01:56.960 the rails? Bloomberg Opinion columnist Brook Sutherland joins us Now, Brook, 0:01:57.000 --> 0:02:00.560 thank you for being here, Thanks so much for having me. Okay, So, 0:02:00.600 --> 0:02:04.440 the railroads don't own those rail cars. So if there 0:02:04.600 --> 0:02:06.560 is a problem with one of the rail cars, and 0:02:06.640 --> 0:02:09.959 maybe it starts a chain reaction like a derailment. Is 0:02:10.000 --> 0:02:14.120 the private owner responsible? Is that a complicated question to 0:02:14.160 --> 0:02:18.360 ask who takes care of that? It's definitely a complicated question, 0:02:18.400 --> 0:02:20.840 a lot more complicated than I think I even appreciated 0:02:20.880 --> 0:02:23.280 when I started looking at this. So the railroads do 0:02:23.440 --> 0:02:27.520 own some cars, and there's also an entity that's called TTX, 0:02:27.520 --> 0:02:30.000 which is jointly owned by all of the by a 0:02:30.080 --> 0:02:33.359 number of the major North American railroads and pools car 0:02:33.360 --> 0:02:36.920 asses between them. But the railroads and TTX typically own 0:02:37.160 --> 0:02:40.960 you know, box cars or container cars. They do not 0:02:41.200 --> 0:02:43.960 own hopper cars, which is in the case of this 0:02:44.200 --> 0:02:46.480 derailment that we saw, the one that had the overheated 0:02:46.560 --> 0:02:50.639 bearing or tank cars which carry chemicals which you know, 0:02:50.760 --> 0:02:54.440 in the case of the derailment, spilled or had to 0:02:54.480 --> 0:02:58.280 be released in a controlled way. So typically those are 0:02:58.280 --> 0:03:01.560 owned by private party, and that can be mean a 0:03:01.639 --> 0:03:03.960 number of different things. That can be the shipping company 0:03:04.280 --> 0:03:06.800 or the shipper you know that's transporting its goods down 0:03:06.840 --> 0:03:09.960 the railroad. It can be a railroad leasing company, or 0:03:09.960 --> 0:03:12.960 it can be a private investor like a bank or 0:03:13.440 --> 0:03:17.240 you know, even a hedge fund. And those owners are 0:03:17.280 --> 0:03:20.760 typically responsible for the maintenance of the car. They're responsible 0:03:20.800 --> 0:03:24.480 for keeping the car in good condition. Um. The railroad, however, 0:03:24.600 --> 0:03:29.079 has responsibility for, you know, overseeing kind of the overall train, 0:03:29.240 --> 0:03:32.480 and it does certain inspections when those cars come onto 0:03:32.480 --> 0:03:35.360 its line to make sure, you know, at least as 0:03:35.360 --> 0:03:38.320 far as it can be determined at that point in time, 0:03:38.400 --> 0:03:40.720 that those cars are in good shape. So there's a 0:03:40.720 --> 0:03:43.960 lot of varying responsibilities here, um, And all of this 0:03:44.320 --> 0:03:48.280 likely has to be sorted out in a legal way 0:03:48.560 --> 0:03:51.080 down the line, and I expect that it will be. 0:03:51.160 --> 0:03:55.400 But there's maarious responsibilities here that makes sense, and it 0:03:55.480 --> 0:03:59.760 also makes maybe explains why this seems so hard, because 0:03:59.800 --> 0:04:03.120 if you have multiple owners of multiple cars that are 0:04:03.120 --> 0:04:07.120 all on one train, I'm wondering, does that mean then 0:04:07.160 --> 0:04:11.120 you find different people performing different inspections at different times. 0:04:11.240 --> 0:04:15.040 Is there any consistency there? Sure? So, I mean there 0:04:15.120 --> 0:04:19.200 are regulations around, you know, keeping the cars themselves in 0:04:19.240 --> 0:04:22.040 good shape. And like I mentioned, the railroads are obligated 0:04:22.120 --> 0:04:25.800 to do an inspection of the train cars when they 0:04:25.839 --> 0:04:28.680 do come onto their line. Now, the railroads, they're somewhat 0:04:28.800 --> 0:04:32.000 limited in what they can inspect here. It's mostly what 0:04:32.040 --> 0:04:36.080 they can determine visually or from simple checks. So something 0:04:36.160 --> 0:04:39.719 like bearing, which in the case of the derailment, like 0:04:39.720 --> 0:04:42.200 we said, is what overheated and has been pointed to 0:04:42.279 --> 0:04:45.080 by the NTSB as a potential trigger for this derailment. 0:04:45.440 --> 0:04:48.520 That's in a metal box essentially, So the only way 0:04:48.520 --> 0:04:51.919 to really inspect it is to take the wheel set apart. 0:04:52.000 --> 0:04:54.839 Now you're not going to do that every time you 0:04:54.880 --> 0:04:58.479 want to run a train. So there is a system here, 0:04:58.520 --> 0:05:01.880 there is regulations, but you know, like we said, there's 0:05:01.880 --> 0:05:04.240 a number of different parties that have their hands on 0:05:04.279 --> 0:05:06.720 these rail cars. And that's not just the owner and 0:05:07.000 --> 0:05:09.800 one railroad. Also, by the way cars the way our 0:05:09.839 --> 0:05:13.440 network works in North America, cars will be transferred between 0:05:13.480 --> 0:05:15.800 the major North American railroads and also what we call 0:05:16.120 --> 0:05:19.760 short haul lines. Oh so if you have a train, 0:05:20.160 --> 0:05:25.600 say going through Ohio, and it's on the Norfolk Southern 0:05:25.880 --> 0:05:28.080 rail line at one point, it might be on a 0:05:28.120 --> 0:05:31.080 whole different rail line on another time, it's not consistently 0:05:31.120 --> 0:05:34.200 with that same rail line. Correct. The railroads don't have 0:05:34.760 --> 0:05:37.680 networks that traverse the entire United States. So if the 0:05:37.680 --> 0:05:40.479 shipment starts on the West Coast, for example, it might 0:05:40.600 --> 0:05:44.080 touch multiple different railroads before it makes its way to Ohio. 0:05:45.520 --> 0:05:51.000 Oh so, no, this is tremendously complex. It is, yes, 0:05:51.080 --> 0:05:53.080 And I mean I think we've seen this time and 0:05:53.120 --> 0:05:55.760 time again in the industrial sector, especially over the last 0:05:55.800 --> 0:05:58.720 couple of years, the supply chains and manufacturing have been 0:05:58.800 --> 0:06:01.360 in such a national spotlight. Is that these systems are 0:06:01.680 --> 0:06:05.240 not necessarily as simple as you might think, or as 0:06:05.360 --> 0:06:07.640 what we have grown used to, you know, in the 0:06:07.680 --> 0:06:11.279 world where we can track our FedEx and ups deliveries 0:06:11.320 --> 0:06:14.520 on our phone, or we can see with software, you know, 0:06:15.279 --> 0:06:17.279 so much more than we could even a few years ago. 0:06:17.279 --> 0:06:19.120 And I think it comes as a surprise to some 0:06:19.200 --> 0:06:23.800 people just how complicated these more industrial parts of the 0:06:23.839 --> 0:06:25.960 economy are. And it's not just railroads. We learned this 0:06:26.080 --> 0:06:28.760 as well from the ports, with all of the challenges 0:06:28.800 --> 0:06:31.320 that they had in navigating you know, the huge sturge 0:06:31.400 --> 0:06:35.200 of shifts that came in during that peak demand for 0:06:35.279 --> 0:06:37.680 physical good during the pandemic. I'm going to throw you 0:06:37.720 --> 0:06:40.640 a bit of a curveball here. In the case of 0:06:40.680 --> 0:06:44.599 the train derailment in East Palestine, there were toxic chemicals spilled, 0:06:44.600 --> 0:06:47.800 and Norfolk Southern came forward and said they've pledged to 0:06:47.839 --> 0:06:50.800 do whatever it takes to make things right. But as 0:06:50.839 --> 0:06:53.880 you said earlier, and as they've said, the Hopper rail 0:06:53.920 --> 0:06:56.600 car is where the problem began, and that doesn't belong 0:06:56.680 --> 0:07:00.480 to them. So does something like that tie our hands, 0:07:00.560 --> 0:07:04.159 tie Norfolk Southern's hands, or does it give them a 0:07:04.240 --> 0:07:08.200 reason to wash their hands of responsibility. I don't think 0:07:08.240 --> 0:07:11.920 that Norfolk Southern can wash the hands of responsibility here. 0:07:12.160 --> 0:07:14.560 I think you know, they've pledged to do whatever it 0:07:14.600 --> 0:07:17.360 takes to clean up the community, and I think they should. 0:07:17.360 --> 0:07:18.920 And I think this is a moment for not just 0:07:19.000 --> 0:07:20.880 nor Folks ou then, but all of the railroads to 0:07:20.960 --> 0:07:24.560 reevaluate safety and look at what happened here and say, Okay, 0:07:24.560 --> 0:07:27.840 what can we do better? Are there redesdencies that we 0:07:27.880 --> 0:07:30.560 can build into our system that might prevent something like 0:07:30.600 --> 0:07:33.560 this from happening again? Are there other regulations that have 0:07:33.600 --> 0:07:36.800 been proposed that maybe we thought didn't make sense, but 0:07:36.920 --> 0:07:39.480 this accident should force us to reevaluate. I think those 0:07:39.480 --> 0:07:42.400 conversations need to be happening. But I do think that 0:07:43.120 --> 0:07:46.720 those conversations should include the broader railroad industry, and that 0:07:46.880 --> 0:07:50.040 must also mean you know that rail car owners are involved, 0:07:51.120 --> 0:07:55.760 the shippers themselves, the leasing companies, and also regulators, and 0:07:55.880 --> 0:07:58.520 I think there should really be a collaborative conversation that 0:07:58.640 --> 0:08:01.680 brings in all parties here. I think, you know, the 0:08:01.840 --> 0:08:06.160 people in Ohio want answers, and that needs to include 0:08:06.160 --> 0:08:09.760 a discussion of who owned that railcar, how it was inspected, 0:08:09.800 --> 0:08:12.760 how it was maintained, and what went wrong with that bearing. 0:08:12.960 --> 0:08:16.080 I want to look ahead and figure out what may 0:08:16.160 --> 0:08:20.520 happen from here. I'm thinking regulations, other railroads watching this 0:08:20.640 --> 0:08:23.400 and how it plays out and following suit. What do 0:08:23.480 --> 0:08:26.840 you see coming out of this? I think that you know, 0:08:26.880 --> 0:08:30.680 there's been a lot of discussions about the hot bearing detectors. 0:08:30.720 --> 0:08:33.760 These are temperature sensors that are along the rail tracks 0:08:33.960 --> 0:08:37.400 in Norfolk. Southern has already said they're planning to enhance 0:08:37.559 --> 0:08:41.400 their work of these detectors. They're going they're already you know, 0:08:41.960 --> 0:08:45.760 roughly about every thirteen point nine miles, I believe the 0:08:45.880 --> 0:08:47.800 railroad said, but they're going to you know, take a 0:08:47.840 --> 0:08:50.800 closer look at any times where there might be longer 0:08:50.880 --> 0:08:53.280 gaps and make sure that they have proper density of 0:08:53.320 --> 0:08:56.319 those detectors. There's also new technology out there, whether that 0:08:56.440 --> 0:09:01.400 might be acoustic detectors, which can perhaps take up situations 0:09:01.440 --> 0:09:04.600 where the bearing is at risk of overheating before it 0:09:04.640 --> 0:09:09.080 actually does. There's also you know, new next generation technology 0:09:09.080 --> 0:09:13.000 that can scan a broader cross section of the wheel set. 0:09:14.080 --> 0:09:16.400 There's a lot of things that could be done potentially 0:09:16.440 --> 0:09:20.560 that might make this network of detectors slightly more robust. 0:09:20.600 --> 0:09:22.600 I should point out also that this is not something 0:09:22.600 --> 0:09:27.480 that is currently regulated. Railroads install these detectors voluntarily, and 0:09:27.520 --> 0:09:31.720 they have discretion over how they deploy them. So perhaps 0:09:31.760 --> 0:09:34.520 this is something that needs to be crystallized at the 0:09:34.559 --> 0:09:37.000 government level, and I think that's where you know, a 0:09:37.040 --> 0:09:39.680 lot of the discussion is and at this moment, and 0:09:39.720 --> 0:09:42.240 that probably seems like the most likely at this point. 0:09:42.280 --> 0:09:44.400 I know that there's been a number of different proposals 0:09:44.400 --> 0:09:46.800 that have put forward, and as far as anything else, 0:09:46.920 --> 0:09:50.600 it's somewhat difficult to handicap at this point. But you know, 0:09:50.640 --> 0:09:52.600 certainly it seems like the rail industry is going to 0:09:52.640 --> 0:09:55.880 stay in the spotlight and needs to have some serious 0:09:55.920 --> 0:09:59.600 conversations about safety. So beyond regulations and those conversations, new 0:09:59.600 --> 0:10:03.560 techn anologies to help people stay safe. Yes, absolutely, I mean, 0:10:03.600 --> 0:10:08.520 I think, you know, having covered the manufacturing industry, closely. 0:10:08.520 --> 0:10:10.840 There's a lot of technology being deployed there that could 0:10:10.880 --> 0:10:13.960 have a placed on the rails in terms of predictive maintenance, 0:10:14.880 --> 0:10:19.240 using industrial software and censors to draw data out of 0:10:19.559 --> 0:10:25.439 the equipment itself and make better decisions using that information, 0:10:25.520 --> 0:10:27.800 and in terms of how to run that equipment most 0:10:27.800 --> 0:10:31.440 efficiently and most safely. All right, thank you Brooke for 0:10:31.480 --> 0:10:33.920 taking the time with us. We appreciate it. Thank you 0:10:33.960 --> 0:10:37.560 so much. Bloomberg Opinion columnist Brooks Sutherland covers deals and 0:10:37.640 --> 0:10:42.040 industrial companies and writes the Industrial Strength newsletter here at Bloomberg. 0:10:42.440 --> 0:10:44.160 Coming up, we're going to take a look at what 0:10:44.240 --> 0:10:48.160 it takes to attract and retain workers. Bloomberg's Sarah Green 0:10:48.200 --> 0:10:51.959 Carmichael will join us. Just ahead. You're listening to Bloomberg Opinion. 0:10:53.080 --> 0:10:56.319 You're listening to Bloomberg Opinion. I'm Amy Morris. And despite 0:10:56.360 --> 0:10:59.400 fears of a slowdown, the labor market is still pretty tight. 0:10:59.559 --> 0:11:03.040 Most companies aren't laying people off. They're more concerned about 0:11:03.040 --> 0:11:06.800 retaining the workers they have. Some employers might not want 0:11:06.800 --> 0:11:11.040 to grant pay increases in an uncertain economy, but there's 0:11:11.200 --> 0:11:14.040 another way. We turned out. A Bloomberg Opinion editor Sarah 0:11:14.040 --> 0:11:17.280 Green Carmichael, and she joins us. Now it seems like 0:11:17.320 --> 0:11:20.560 an obvious solution if you can't give your workers raises, 0:11:21.040 --> 0:11:24.880 provide benefits. But does that work? It does? I think 0:11:24.920 --> 0:11:28.440 in terms of enhancing employee loyalty, there's some good evidence 0:11:28.440 --> 0:11:31.280 that benefits can do that, especially if they're well designed. 0:11:31.400 --> 0:11:35.880 So I'm specifically thinking about things three things. One is 0:11:35.880 --> 0:11:39.360 a benefit that's pretty rare or unusual. One is a 0:11:39.520 --> 0:11:42.240 benefit that has a real bang for the buck, offers 0:11:42.280 --> 0:11:44.880 real financial value to people. And then finally, you know, 0:11:44.920 --> 0:11:47.960 a benefit that actually has a meaningful impact on people's lives. 0:11:48.720 --> 0:11:51.120 If we think about something that's sort of the opposite 0:11:51.120 --> 0:11:55.240 of those I might pick like dental insurance or a 0:11:55.320 --> 0:11:59.240 sort of general employee wellness kind of benefit. Typically those 0:11:59.240 --> 0:12:01.280 sorts of benefits, they don't offer a lot of money, 0:12:01.320 --> 0:12:03.800 they're pretty common, and you're not even ever going to 0:12:03.840 --> 0:12:06.040 hear someone say like, well, you know, I really wanted 0:12:06.080 --> 0:12:08.160 to quit, but then I thought about my dental engas 0:12:08.640 --> 0:12:12.200 got dental. But yeah, But if you're thinking about something 0:12:12.200 --> 0:12:14.319 like maybe a sabbatical, well, now we're in a whole 0:12:14.360 --> 0:12:17.960 new ball game. Okay, So do you find that there 0:12:17.960 --> 0:12:22.040 are businesses that perhaps can't afford to give raises, but 0:12:22.160 --> 0:12:25.040 can somehow find a way to give these benefits, Like, 0:12:25.280 --> 0:12:29.000 is there some sort of cost effectiveness there? Yeah. So 0:12:29.160 --> 0:12:31.800 one of the things that's interesting about benefits is that 0:12:31.840 --> 0:12:34.480 they aren't in the US anyway. They are taxed differently 0:12:34.640 --> 0:12:37.480 than raises, for one thing, so there's some tax advantages. 0:12:38.040 --> 0:12:43.120 They are also typically cheaper to provide than across the 0:12:43.120 --> 0:12:45.600 board raise, especially at a time of such high inflation. 0:12:45.720 --> 0:12:47.760 So if you think about something like an on site 0:12:47.840 --> 0:12:51.600 childcare that's very rare benefit. It would be expensive to 0:12:51.640 --> 0:12:56.080 set that up potentially, but still cheaper than giving raises 0:12:56.160 --> 0:12:58.199 to a bunch of people. And you know, it might 0:12:58.240 --> 0:13:01.079 not only benefit employees who would use it, but also 0:13:01.200 --> 0:13:03.840 people who are younger, maybe thinking about having kids. It 0:13:03.920 --> 0:13:06.080 might convince them to stay with the firm for longer. 0:13:06.160 --> 0:13:09.360 So there's definitely economies of scale and offering a good benefit. 0:13:09.720 --> 0:13:11.880 Is it something that they can afford in other ways? Though, 0:13:11.920 --> 0:13:14.600 I'm just looking for more advantages for the business owner 0:13:14.640 --> 0:13:19.160 in providing these worker benefits. What are they finding for them? Yeah, 0:13:19.200 --> 0:13:23.640 of course. So one example comes from Google. You now 0:13:23.800 --> 0:13:26.760 many years ago they've now expanded their parental leaf policy. 0:13:26.840 --> 0:13:29.439 For example, twice and two thousand and seven they increased 0:13:29.480 --> 0:13:32.200 it from twelve weeks to eighteen weeks, and then just 0:13:32.320 --> 0:13:34.360 last year they bumped it up from eighteen weeks to 0:13:34.440 --> 0:13:37.240 twenty four weeks. And the reason that they are doing 0:13:37.280 --> 0:13:40.120 this is not just because it helps them attract talent 0:13:40.400 --> 0:13:43.679 and not just because it helps them sort of seem 0:13:43.760 --> 0:13:46.840 like a cool employer to work for. They have found 0:13:46.960 --> 0:13:50.480 that when they increased that benefit, they've reduced the rate 0:13:50.520 --> 0:13:53.800 at which women who've had children quit their jobs. So 0:13:53.880 --> 0:13:56.360 when they bumped it up from twelve weeks to eighteen 0:13:56.400 --> 0:13:59.079 weeks in two thousand and seven, they have the rate 0:13:59.120 --> 0:14:02.440 at which new moms were quitting. So that really matters 0:14:02.520 --> 0:14:04.960 because no matter what the labor market is like, it 0:14:05.080 --> 0:14:08.160 is always expensive to replace workers who leave. It takes time, 0:14:08.320 --> 0:14:12.360 it's disruptive, it costs real money. Sometimes you end up 0:14:12.400 --> 0:14:15.520 having to pay more to hire someone new from outside 0:14:15.520 --> 0:14:18.599 the organization. So retention is really important not only to 0:14:18.720 --> 0:14:22.280 continuity of the business, not only to productivity, but also 0:14:22.320 --> 0:14:24.760 to the bottom line. I'm going to throw you a 0:14:24.760 --> 0:14:26.520 bit of a curveball, but I trust that you can 0:14:26.560 --> 0:14:30.960 handle it. I'm not worried. You mentioned the data and 0:14:31.160 --> 0:14:35.200 keeping track of what it is that the employees want 0:14:35.280 --> 0:14:37.960 or what it seems to get them more quote embedded 0:14:38.000 --> 0:14:40.200 as you as you put it is that key to 0:14:40.280 --> 0:14:43.400 this for companies that you can throw all the benefits 0:14:43.400 --> 0:14:46.760 you want at your employee workforce, but you need to 0:14:46.800 --> 0:14:49.240 keep track of what works and what doesn't. You need 0:14:49.280 --> 0:14:52.760 to keep track of not just the cost effectiveness of it, 0:14:53.120 --> 0:14:57.080 but the personnel part of it too totally. And this 0:14:57.200 --> 0:14:59.240 is one of the reasons I think that you're seeing 0:14:59.480 --> 0:15:03.240 companies cut back on things like free food if free 0:15:03.280 --> 0:15:07.160 food costs real money and it's not something it's like 0:15:07.320 --> 0:15:09.840 something that's sort of nice to have, but it's not again, 0:15:09.920 --> 0:15:12.560 it's not keeping people from walking out the door. So 0:15:12.600 --> 0:15:16.320 I think companies are very smart. Companies anyway are very 0:15:16.360 --> 0:15:19.400 sensitive to like what's really keeping people here? What are 0:15:19.400 --> 0:15:22.600 people really evaluating. I think companies should always be evaluating 0:15:22.600 --> 0:15:26.320 their benefits to see what people are using. If you're, 0:15:26.360 --> 0:15:29.320 you know, commuter benefit, if no one is using that benefit, 0:15:29.720 --> 0:15:33.320 maybe don't keep offering it. Or if no one's using it, 0:15:33.400 --> 0:15:35.360 probably doesn't hurt you to keep offering it because you're 0:15:35.360 --> 0:15:38.160 not spending any money on it. That's true. I do 0:15:38.200 --> 0:15:40.920 think it makes sense to constantly be looking at and 0:15:40.960 --> 0:15:44.480 reevaluating the benefits you're offering and see what works. So 0:15:44.560 --> 0:15:46.800 let's talk about some of those employee perks that we 0:15:46.880 --> 0:15:50.640 saw during COVID that maybe are being brought back and 0:15:50.720 --> 0:15:53.360 brought back, as in clawed back, as in removed from 0:15:54.000 --> 0:15:56.320 the offerings that would be You mentioned the free food, 0:15:56.320 --> 0:16:00.040 the free lunch, subsidized parking, flexible work hours seems to 0:15:59.880 --> 0:16:02.320 be something that has a little more stickiness to it. 0:16:02.400 --> 0:16:05.720 No exactly. I think it's important to me to think 0:16:05.760 --> 0:16:08.920 about these in sort of two different categories, right. I 0:16:08.960 --> 0:16:11.760 think it's very easy for companies to put the case 0:16:11.840 --> 0:16:15.120 to their employees that something like subsidized parking is really 0:16:15.120 --> 0:16:18.560 a pandemic era benefit. It is something that helps you 0:16:18.600 --> 0:16:21.160 maybe avoid germs on the subway, and it is a 0:16:21.160 --> 0:16:23.360 way to get you into the office at a scary 0:16:23.400 --> 0:16:25.840 time where they recognize that you might really not want 0:16:25.840 --> 0:16:28.400 to come in for health reasons. It is much easier 0:16:28.400 --> 0:16:31.480 to take something like that away than it is to 0:16:31.520 --> 0:16:37.040 take away flexibility. Flexibility costs nothing for companies to offer. 0:16:37.560 --> 0:16:41.600 It is something that is highly prized by employees because 0:16:41.600 --> 0:16:44.040 when we're talking about flexibility, What we're really talking about 0:16:44.120 --> 0:16:46.760 is autonomy. Are you an adult? Can you decide how 0:16:46.760 --> 0:16:49.600 to do your job? Can you have control over when 0:16:49.600 --> 0:16:52.480 and where you work? That's something that is like a 0:16:52.520 --> 0:16:55.640 price beyond measure to an employee, And that's why I 0:16:55.640 --> 0:16:58.280 think we're really seeing employees resisting those calls to be 0:16:58.320 --> 0:17:00.760 back in the office four or five days, and why 0:17:00.760 --> 0:17:03.640 I think some of that pressure from companies is really misguided. 0:17:03.760 --> 0:17:05.440 You know, this is not the time to be clawing 0:17:05.480 --> 0:17:07.639 back a benefit then not only cost you nothing, but 0:17:07.880 --> 0:17:11.119 actually helps employees be more productive. When you say that 0:17:11.200 --> 0:17:14.560 it provides worker autonomy to have those flexible work hours, 0:17:15.440 --> 0:17:16.879 I want to go back to something we used to 0:17:16.960 --> 0:17:20.000 hear in the nineties all the time, the work life balance. Right, 0:17:20.240 --> 0:17:24.080 it means something, especially whether there's a pandemic or not, 0:17:24.160 --> 0:17:26.920 especially if you're a parent with young kids, especially if 0:17:26.960 --> 0:17:29.600 you are an adult who is taking care of an 0:17:29.600 --> 0:17:35.000 aging parent. To have that flexibility would not only give 0:17:35.040 --> 0:17:39.240 you more loyalty to your manager, but also would give 0:17:39.280 --> 0:17:42.520 you more opportunities to get more work done. But maybe 0:17:42.520 --> 0:17:46.400 when other people aren't in the office, that sort of thing. Yeah, exactly, 0:17:47.160 --> 0:17:50.560 you know, I think commuting is a huge times huck, 0:17:50.800 --> 0:17:53.720 and what we saw during a pandemic was yes, you 0:17:53.840 --> 0:17:55.879 laugh because yes, you know it's true. Oh yeah, what 0:17:55.960 --> 0:17:58.840 we saw during the pandemic was really that people recouped 0:17:58.880 --> 0:18:01.920 that commute time and they did use it. In some cases, 0:18:02.520 --> 0:18:05.000 they use some of it for their own wellness, but 0:18:05.040 --> 0:18:07.440 they use a lot of it and maybe even most 0:18:07.480 --> 0:18:11.400 of it for their jobs, and that's how they get 0:18:11.440 --> 0:18:15.080 more done. So I think it's something where I'm a 0:18:15.119 --> 0:18:17.360 manager in a company and if there's something I can 0:18:17.400 --> 0:18:19.760 give people that cost me nothing and that helps them 0:18:19.760 --> 0:18:22.360 do their jobs better and actually get even more done, 0:18:22.560 --> 0:18:25.600 that's something I'd like to keep giving them. Where do 0:18:25.640 --> 0:18:28.440 you see things going from here? Do you see more 0:18:28.520 --> 0:18:32.640 benefits being offered? Do you see more flexibility being offered? 0:18:32.920 --> 0:18:35.400 What are you going to be watching for in this workspace? 0:18:35.400 --> 0:18:37.520 I know you don't have a crystal ball, but where 0:18:37.520 --> 0:18:40.120 do you see the trends? A couple of trends. I'm 0:18:40.200 --> 0:18:44.640 seeing our greater flexibility around who counts as a loved one. 0:18:45.160 --> 0:18:48.320 So under old sort of caregiving policies, it had to 0:18:48.359 --> 0:18:50.240 be a child or a parent or a spouse who 0:18:50.320 --> 0:18:53.360 is sick for you to take some form of caregiving leave. 0:18:53.800 --> 0:18:56.000 But I'm now seeing more companies saying, you know what 0:18:56.320 --> 0:18:58.919 your loved one is, whoever you say it is, and 0:18:58.960 --> 0:19:01.960 if they need, you know, time for you to take 0:19:02.000 --> 0:19:04.800 care of them, you can have that paid caregiving leave. 0:19:04.880 --> 0:19:08.400 So that's one thing I'm seeing. Other stuff I'm really 0:19:08.440 --> 0:19:11.320 interested in is this sort of trend to sabbaticals. I'd 0:19:11.320 --> 0:19:13.199 love to have more data on that. The data we 0:19:13.240 --> 0:19:14.960 have so far as pretty thin, but I'd love to 0:19:14.960 --> 0:19:17.680 know if more companies are actually offering them. And then 0:19:17.720 --> 0:19:20.800 experiments like four day workweeks. There have been some fascinating 0:19:20.840 --> 0:19:24.440 experiments in Europe with the four day workweek. One manager 0:19:24.440 --> 0:19:26.679 in Iceland said it's like a gift from the heaven. 0:19:27.320 --> 0:19:29.240 I would love to see more data on that, and 0:19:29.320 --> 0:19:31.920 maybe some more US companies experimenting with that as well. 0:19:32.040 --> 0:19:33.520 All right, we're going to watch for it with you. 0:19:33.600 --> 0:19:36.120 Thank you, Sarah so much for taking the time. Thank 0:19:36.160 --> 0:19:39.560 you for having me, Bloomberg Opinion Editor Sarah Greencar Michael, 0:19:39.640 --> 0:19:43.119 don't forget. We're available as a podcast on Apple, Spotify 0:19:43.320 --> 0:19:46.479 or your favorite podcast platform. Stay with us. Coming up, 0:19:46.480 --> 0:19:49.880 we'll look at mortgages and the housing market. Bloomberg's Alexis 0:19:49.960 --> 0:19:54.480 Leondis warns that homebuyers are buying into a lie. This 0:19:54.560 --> 0:19:58.280 is Bloomberg opinion. This is Bloomberg opinion. I'm Amy Morris. 0:19:58.600 --> 0:20:02.000 Realtors and mortgage lenders are giving worried home buyers some 0:20:02.119 --> 0:20:05.480 advice as mortgage rates approach the two decade high of 0:20:05.640 --> 0:20:10.359 seven percent reached in November. Marry the house, date the rate, 0:20:10.960 --> 0:20:13.560 But that could be bad advice. Many new homeowners are 0:20:13.560 --> 0:20:17.240 finding themselves in a longer term relationship with today's rate 0:20:17.240 --> 0:20:20.320 than they expected. Vice President Kamala Harris has said that 0:20:20.440 --> 0:20:23.160 owning a home is really part of the American dream. 0:20:23.359 --> 0:20:30.160 A home represents financial security, the opportunity to build wealth 0:20:30.280 --> 0:20:35.959 and equity. We know that when we increase home ownership, 0:20:36.400 --> 0:20:41.520 it strengthens communities and it strengthens our economy. Vice President 0:20:41.600 --> 0:20:45.960 Kamala Harris on how homeownership can help the entire community. 0:20:46.480 --> 0:20:49.359 So what our home buyers facing? Joining us now with 0:20:49.400 --> 0:20:53.040 some insight, Bloomberg Opinion columnist Alexis leand us. Okay, so 0:20:53.119 --> 0:20:55.680 let's look at a little history. For the past ten years, 0:20:55.840 --> 0:21:00.000 rates were much lower. This rate hike is a relative 0:21:00.000 --> 0:21:03.800 satively new phenomenon. So psychologically, do you feel like that 0:21:03.920 --> 0:21:07.000 leads people to believe that maybe rates are likely to 0:21:07.080 --> 0:21:10.560 drop just any day now. Yes, I think because you know, 0:21:10.600 --> 0:21:13.000 even if we can look at the headlines and read 0:21:13.040 --> 0:21:15.560 the paper and see on Bloomberg and Scene BC, you 0:21:15.560 --> 0:21:17.800 know that rates are higher than they've been. I think 0:21:17.920 --> 0:21:22.200 for most adults and people who have been buying homes 0:21:22.200 --> 0:21:24.679 for the last ten or fifteen years, they've been accustomed 0:21:24.680 --> 0:21:28.200 to rates that have averaged less than four percent. And 0:21:28.280 --> 0:21:31.560 obviously we saw a very fast uptick in rates last 0:21:31.640 --> 0:21:34.960 year when the FED started hiking, and again we've seen 0:21:35.280 --> 0:21:37.600 rates start to increase this year, creep back up, and 0:21:37.640 --> 0:21:40.199 they're approaching that two decade hive seven percent that they 0:21:40.280 --> 0:21:42.760 reached in November. But the point of my column is 0:21:42.840 --> 0:21:45.080 to point out for those who think that they can 0:21:45.160 --> 0:21:47.440 just refinance because rates are in fact just going to 0:21:47.520 --> 0:21:49.840 drop back down to where they had been, they really 0:21:49.880 --> 0:21:53.080 need to think again and to maybe get comfortable with 0:21:53.119 --> 0:21:56.880