WEBVTT - A Tale of Two Cities Emerges In Commercial Real Estate 0:00:01.400 --> 0:00:04.120 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney. Along 0:00:04.160 --> 0:00:06.240 with my co host of Bonnie Quinn. Every business day 0:00:06.240 --> 0:00:10.360 we bring you interviews from CEOs, market pros, and Bloomberg experts, 0:00:10.400 --> 0:00:13.560 along with essential market moving news. Kind the Bloomberg Markets 0:00:13.600 --> 0:00:17.000 Podcast on Apple podcast or wherever you listen to podcasts, 0:00:17.000 --> 0:00:20.919 and on Bloomberg dot com. Well, we've been keeping a 0:00:20.920 --> 0:00:24.000 close eye on real estate, particularly commercial real estate. Or 0:00:24.079 --> 0:00:26.840 next to guest is the leader of b d os 0:00:27.080 --> 0:00:31.640 us site selection team. So has he been busy? My suspicion, 0:00:31.680 --> 0:00:34.760 as he'll say, yes, let's ask him directly. Tom Stringer 0:00:34.880 --> 0:00:38.160 joins us. Tom, thanks for joining. What's happening out there 0:00:38.280 --> 0:00:44.919 are companies still looking for sites, making plans, changing strategies. Well, 0:00:44.960 --> 0:00:47.559 first of all, good morning, Fanny, thanks for having me. 0:00:47.560 --> 0:00:50.440 It's great to be back. And yes, you are right, 0:00:50.520 --> 0:00:52.400 we are busy. I mean, I think for the first 0:00:52.400 --> 0:00:55.320 two months of the pandemic, folks were in shutdown and 0:00:55.320 --> 0:00:58.600 wait and see mode and kind of a springtime turned 0:00:58.600 --> 0:01:01.920 into summer, the wheel to commerce luckily started turning again, 0:01:02.040 --> 0:01:05.240 certainly on on large Catholic investment projects, and you started 0:01:05.280 --> 0:01:07.520 to see that. Obviously, today we have some great news 0:01:07.520 --> 0:01:09.880 in New York City with what Facebook announced with the 0:01:10.160 --> 0:01:13.960 Farley Post Office building taking a substantial block of space 0:01:13.959 --> 0:01:16.319 in the Central Business District, which I think is really 0:01:16.319 --> 0:01:19.800 probably great news for the brokerage communities across the country. 0:01:20.040 --> 0:01:22.040 And in the last week or so, you've had some 0:01:22.040 --> 0:01:26.440 some major investments in manufacturing, certainly with Tesla and Nicolo 0:01:26.520 --> 0:01:29.119 with the groundbreaking on their factories and the automotive sector, 0:01:29.240 --> 0:01:32.559 so wheels are starting to move, which is great news. 0:01:33.160 --> 0:01:36.520 Is your client, we should we should mention exactly so. 0:01:36.520 --> 0:01:39.440 So Tom, you know, I guess the debate is still 0:01:39.480 --> 0:01:44.040 open about, you know, where people will work going forward. 0:01:44.360 --> 0:01:45.840 A lot of us, most of us, a lot of 0:01:45.920 --> 0:01:47.680 us are working from home right now, we have been 0:01:47.720 --> 0:01:50.800 since March. Some folks unfortunately are unable to do that, 0:01:51.200 --> 0:01:54.240 and there are on on the front lines. But how 0:01:54.400 --> 0:01:56.960 is it the thought process evolving about how this is 0:01:57.000 --> 0:01:58.280 going to play out? Are we ever gonna go back 0:01:58.320 --> 0:02:01.600 to the office full force? It's a great an'swer, a 0:02:01.640 --> 0:02:04.440 great question. I think the answer to that is probably not. 0:02:04.920 --> 0:02:07.080 I think that any time you can take right the 0:02:07.160 --> 0:02:10.080 two biggest costs on corporate balance sheets or people, we 0:02:10.120 --> 0:02:12.440 all get that and then obviously real estates number two. 0:02:13.000 --> 0:02:16.160 And anytime you can take your second leading cost and 0:02:16.160 --> 0:02:18.280 and maybe half it or reduce it by even as 0:02:18.360 --> 0:02:21.800 much as the third um, that's a huge difference. And 0:02:21.919 --> 0:02:24.400 it also takes an account of people like working at 0:02:24.440 --> 0:02:27.040 home to some degree. Some jobs people would certainly prefer 0:02:27.080 --> 0:02:29.240 to be back to the office. But that has really 0:02:29.240 --> 0:02:31.680 been injected into the thought process on the corporate real 0:02:31.800 --> 0:02:33.600 estate side that hey, we're going to have to tack 0:02:33.639 --> 0:02:36.760 a little bit here at you know, try to reconfigure 0:02:36.800 --> 0:02:38.800 how we utilize space. Is it going to be that 0:02:38.840 --> 0:02:42.000 big open concept anymore? Will that work? Do we need 0:02:42.040 --> 0:02:44.800 a smaller footprint that's just going to be more hotel 0:02:44.880 --> 0:02:47.880 and meeting space and and let most people office out 0:02:47.880 --> 0:02:51.200 of their homes. So those discussions are really taking place, 0:02:51.240 --> 0:02:53.760 and I think we're probably going to see a reduction 0:02:53.919 --> 0:02:57.680 in overall office usage. But that's being picked up pretty 0:02:57.720 --> 0:03:00.760 aggressively on the manufacturing and warehousing side right now. I mean, 0:03:01.000 --> 0:03:05.440 you can't find warehousing space really anywhere around the country 0:03:05.440 --> 0:03:08.720 in sizeable blocks anymore, which is is indicative of kind 0:03:08.720 --> 0:03:10.639 of the rise of e commerce. Well, so you'd be 0:03:10.639 --> 0:03:13.120 in a great position to tell us are those all 0:03:13.280 --> 0:03:16.760 for server farms and for computers or the actual people 0:03:16.800 --> 0:03:18.840 that are Like, I'm fascinated by this for NATO stories 0:03:18.880 --> 0:03:22.079 seven square feet in the middle of New York City 0:03:22.160 --> 0:03:24.480 right by Pen I mean it is Penn Station basically, 0:03:24.960 --> 0:03:27.640 and uh, you know that's ten million square feet in total. 0:03:27.680 --> 0:03:31.280 But is Facebook going to move people into that building 0:03:31.440 --> 0:03:34.520 or is this another server farm? Yeah, no, that's a 0:03:34.560 --> 0:03:37.600 good question. Um, we don't know what their internal plants 0:03:37.600 --> 0:03:40.120 are yet. Focus has really been on the block of space. 0:03:40.240 --> 0:03:43.960 But given where it is, given the locality, given frankly, 0:03:44.000 --> 0:03:46.280 the utility rates and the costs of utilities in New 0:03:46.360 --> 0:03:49.840 York versus putting servers in in more cost effective jurisdictions 0:03:49.880 --> 0:03:52.240 or even upstate New York to take advantage of things 0:03:52.280 --> 0:03:55.400 like Niagara Mohawk power, the odds are that this is 0:03:55.440 --> 0:03:58.560 really going to be a people dominated facility, which is 0:03:58.600 --> 0:04:01.280 great news, but also are around the country there has 0:04:01.320 --> 0:04:03.880 been a lot of pick up really, as you point out, 0:04:03.920 --> 0:04:08.520 in computer capacity in server farms coming online to handle 0:04:08.720 --> 0:04:10.920 just the demand of e commerce and the fact that 0:04:11.640 --> 0:04:16.039 really we're moving our infrastructure and architecture into the digital 0:04:16.040 --> 0:04:18.880 world as opposed to physical plan But it's also being 0:04:18.920 --> 0:04:21.680 picked up by warehouse I mean actual good old fashioned 0:04:21.720 --> 0:04:26.120 inventory as really unsexy as that is, companies are building 0:04:26.120 --> 0:04:28.640 that into their models now because the consumer markets are 0:04:28.720 --> 0:04:32.159 driving Hey, you need to have these types of prescriptions 0:04:32.200 --> 0:04:35.240 on hand, these consumer products on hand, so that that 0:04:35.360 --> 0:04:37.400 kind of the death of the just in time inventory 0:04:37.440 --> 0:04:40.800 models really taking hold. Hey, Tom, you know, let's talk 0:04:40.839 --> 0:04:43.000 about New York City in particular. A couple of weeks ago, 0:04:43.000 --> 0:04:44.719 I came into the city for the first time since 0:04:44.760 --> 0:04:46.640 early March, and I was just shocked at the number 0:04:46.640 --> 0:04:50.880 of vacancies, commercial vacancies along blocks that I'm very familiar 0:04:50.880 --> 0:04:53.719 with where I know they were vibrant businesses just several 0:04:53.720 --> 0:04:55.760 months ago. Where are we in terms of kind of 0:04:56.000 --> 0:05:02.440 commercial vacancies and maybe even rates um in New York City. Well, 0:05:02.560 --> 0:05:05.440 you asked a really good question, because even though office 0:05:05.560 --> 0:05:08.320 and we're housing an industrial may be doing very well, 0:05:08.600 --> 0:05:11.039 um certainly in the New York City marketplace right now, 0:05:11.560 --> 0:05:14.080 and Facebook being a big help to that. The retail 0:05:14.200 --> 0:05:17.080 and street level retail is a big issue, and that's 0:05:17.080 --> 0:05:19.320 been an issue that's really been going on for two 0:05:19.320 --> 0:05:22.600 and three years prior to the pandemic with landlords just 0:05:22.680 --> 0:05:26.200 kind of holding out for higher price rents and small 0:05:26.279 --> 0:05:28.520 mom and pop type of shops and able to make 0:05:28.560 --> 0:05:31.280 it and make it just on a commercial lease standpoint 0:05:31.320 --> 0:05:34.039 that couldn't afford the rent. This is, along with the 0:05:34.080 --> 0:05:38.320 lockdown and shutting them out of any revenue, has really 0:05:38.360 --> 0:05:42.360 been a significant problem for the city and it probably 0:05:42.360 --> 0:05:45.240 will be for the foreseeable future. Um. You know, the 0:05:45.279 --> 0:05:47.240 programs that have come out of the Federal Reserve, the 0:05:47.279 --> 0:05:50.560 p PP, the extensions of it right have been helpful, 0:05:50.600 --> 0:05:53.520 but but it doesn't replace real revenue. It doesn't replace 0:05:53.600 --> 0:05:56.680 real consumer demand. It's it's a band aid, um that 0:05:56.720 --> 0:05:59.760 that was designed to get us to right market demand 0:05:59.760 --> 0:06:02.880 again that still has not come back yet. So I 0:06:02.920 --> 0:06:06.279 think you point out a really good issue that that 0:06:06.400 --> 0:06:09.719 retail and main street related issues for real estate not 0:06:09.800 --> 0:06:11.680 just in the cities, but in the suburbs. I mean 0:06:11.720 --> 0:06:14.360 that they're going through the same issues right now. That's 0:06:14.360 --> 0:06:17.120 a problem. That's a problem that economic development is going 0:06:17.160 --> 0:06:19.719 to have to deal with. That that legislatures at the 0:06:19.760 --> 0:06:21.800 both the federal, state local are going to have to 0:06:21.839 --> 0:06:27.160 deal with and we've never done that for that. Yeah, 0:06:27.600 --> 0:06:29.640 it's interesting to see. It's gonna be a big turn 0:06:29.720 --> 0:06:32.320 on Tom as you're suggesting. Tom Stringer, Corporate real Estate 0:06:32.320 --> 0:06:36.080 Advisory Managing Director for accounting firm b DEO, giving us 0:06:36.120 --> 0:06:38.800 his thoughts on the commercial real estate business again. The 0:06:38.839 --> 0:06:42.080 big news in New York City was um Facebook taking 0:06:42.160 --> 0:06:44.719 a huge piece of commercial real estate, the Farley Building, 0:06:44.720 --> 0:06:50.120 which is right across street from Penn Station in Midtown Manhattan. Well. 0:06:50.120 --> 0:06:53.320 Bloomberg Markets magazine is out with a special issue focused 0:06:53.360 --> 0:06:56.640 on diversity, where black men and women share their experience 0:06:56.800 --> 0:06:59.240 on Wall Street. Lauren Simmons is one of the contributors. 0:06:59.240 --> 0:07:01.520 She's the youngest black woman ever to work on the 0:07:01.520 --> 0:07:03.719 New York Stock Exchange and she joins us now, Lauren, 0:07:03.880 --> 0:07:06.880 thank you so much. We really appreciate it. Entrepreneur found 0:07:06.880 --> 0:07:09.680 their CEO of Lauren Simmons, We really appreciate you joining 0:07:09.720 --> 0:07:12.840 us here, Lauren, Wall Street. Why can't they seem to 0:07:12.920 --> 0:07:17.640 make any steady progress at all on diversity? You know, 0:07:17.760 --> 0:07:20.040 I think it has to be an initiative that people 0:07:20.400 --> 0:07:24.360 want to care about. And if you have people sitting 0:07:24.360 --> 0:07:27.240 at the top that don't make this an importance, it's 0:07:27.320 --> 0:07:30.560 not going to be an importance. UM. I know that 0:07:30.680 --> 0:07:33.560 in two thousand and twenty these issues have been brought 0:07:33.640 --> 0:07:37.360 up again. And once these issues are brought up, it's 0:07:37.400 --> 0:07:39.880 no reason to turn a blind light, like you should 0:07:39.880 --> 0:07:43.160 be going above and beyond to to do better and 0:07:43.200 --> 0:07:45.800 to be better and to have more diversity inclusion within 0:07:45.840 --> 0:07:49.400 your organization. But two thousand and twenties, since the first 0:07:49.400 --> 0:07:52.720 time that these issues have been brought up in seventeen, 0:07:52.840 --> 0:07:54.520 while I was still on the trading floor, it was 0:07:54.560 --> 0:08:00.120 the year of the Woman, and since up until we 0:08:00.160 --> 0:08:04.440 have made marginalized efforts, as you know, bringing more women 0:08:04.480 --> 0:08:09.520 into this space, let alone bringing more minorities. So, Lauren, 0:08:09.600 --> 0:08:11.360 how long did you work on Wall Street and did 0:08:11.400 --> 0:08:14.280 you feel like there was any progress at all between 0:08:14.360 --> 0:08:20.040 arriving and leaving. I worked there for two years, and uh, 0:08:20.120 --> 0:08:24.520 there was one other lady who eventually joined the trading floor, 0:08:24.600 --> 0:08:28.480 and she was much older, had been on the trading floor, 0:08:28.960 --> 0:08:31.360 you know, back in the nineties, early two thousand and 0:08:31.680 --> 0:08:36.239 and had came back. So from my experience, no, specifically 0:08:36.320 --> 0:08:38.960 to the New York Stock Exchange, No, I don't think 0:08:39.000 --> 0:08:42.920 there's been much improvement. So it's interesting, Lauren. You know, 0:08:43.040 --> 0:08:44.760 I've worked on Wall Street for about thirty years and 0:08:44.760 --> 0:08:47.560 what I noticed and this is probably has some relation 0:08:47.640 --> 0:08:50.959 to corporate America as well as the incoming classes, whether 0:08:51.160 --> 0:08:54.439 at a college, whether their investment banking analysts or their 0:08:54.480 --> 0:08:58.199 new sales and people are traders. There's a fair amount 0:08:58.240 --> 0:09:02.680 of diversity there, both gender diversity and all other types 0:09:02.720 --> 0:09:06.080 of diversity. Yet when you get ten years forward, seven eight, nine, 0:09:06.080 --> 0:09:09.800 ten years forward, when there's managing director decisions, partnership decisions, 0:09:09.880 --> 0:09:12.959 those ranks are really thinned out and it does look 0:09:13.200 --> 0:09:16.280 much less diverse. What do you think the industry has 0:09:16.360 --> 0:09:21.080 to do to kind of keep those people in the workforce. Yeah, 0:09:21.160 --> 0:09:23.719 so I don't think that there should be sponsorships. There 0:09:23.720 --> 0:09:28.640 should be allies UM people actively involved in trying to 0:09:28.679 --> 0:09:32.360 progress individuals careers. When I was on the trading floor, 0:09:32.880 --> 0:09:35.720 I love that the men and it was mutual on 0:09:35.760 --> 0:09:38.640 both sides me. But then we were coming together, what 0:09:38.640 --> 0:09:42.080 can we do to help you with your career? You know, 0:09:42.240 --> 0:09:44.439 I'm sure you don't want to stay on the trading floor. 0:09:44.520 --> 0:09:46.199 What do you want to do in finance? And they 0:09:46.240 --> 0:09:50.160 introduced me to many different people and they were definitely 0:09:50.480 --> 0:09:52.920 helpful and facilitating that, But I know that that's not 0:09:53.000 --> 0:09:58.040 the experience UM with throughout all of corporate America or 0:09:58.080 --> 0:10:00.800 even within the financial industry. So I think there needs 0:10:00.800 --> 0:10:05.880 to be a bridge and to go from there. Lauren, 0:10:05.960 --> 0:10:08.400 what did you learn from Wall Street and would you 0:10:08.440 --> 0:10:14.920 ever work on Wall Street again? I learned so many things. Um. Obviously, 0:10:14.920 --> 0:10:17.559 working on the train floor was a very fast pace 0:10:18.200 --> 0:10:22.040 alpha mel environment and I was the only woman on 0:10:22.080 --> 0:10:24.800 the floor. Um. I think one of the best devices 0:10:24.840 --> 0:10:27.640 that Richard Rose and Wise It could give me while 0:10:27.640 --> 0:10:30.960 I worked at Rose bat Securities is you know people 0:10:31.000 --> 0:10:34.360 are going to notice you regardless. And he didn't mean 0:10:34.400 --> 0:10:37.640 anything by it, but he just said that, because I 0:10:37.720 --> 0:10:41.760 am the other in the room, and you know I'm 0:10:41.880 --> 0:10:44.520 essentially the elephant the room, make sure that I have 0:10:44.800 --> 0:10:47.840 something to say, something of substance to say when people 0:10:47.880 --> 0:10:51.480 approached me, because people are going to notice me either way, 0:10:51.520 --> 0:10:56.040 and there's no way of hiding, um and encountering behind 0:10:56.080 --> 0:10:58.280 other people. So I thought that was the best device 0:10:58.360 --> 0:11:00.480 that I would give. As far as you running back 0:11:00.480 --> 0:11:02.959 to Wall Street, I I don't think so. I very 0:11:03.040 --> 0:11:06.960 much enjoyed my experience there, um, but I have been 0:11:07.000 --> 0:11:10.400 showed off into doing uh many more things that I'm 0:11:10.440 --> 0:11:15.680 passionate about that are making a much brander impact. Lauren Simmons, 0:11:15.720 --> 0:11:17.960 thanks so much for joining us. We really appreciate your thoughts. 0:11:18.000 --> 0:11:21.000 A fascinating story. Lauren Simmons, entrepreneur, founder and see of 0:11:21.080 --> 0:11:24.199 Lauren Simmons l l C. Featured it in the Bluemore 0:11:24.240 --> 0:11:27.200 Markets magazine. They have a special issue focused on diversity. Really, 0:11:27.760 --> 0:11:29.760 uh suggest you take a look at that is where 0:11:29.800 --> 0:11:32.080 black men and women they really share their experiences on 0:11:32.120 --> 0:11:35.880 Wall Street and again, Vannie, it's just you know, my 0:11:36.000 --> 0:11:39.160 sense that, um, there's just not enough support to get 0:11:39.160 --> 0:11:41.240 them through the ranks. Again, I think they do a 0:11:41.240 --> 0:11:44.240 pretty decent job getting people in the door, but keeping 0:11:44.280 --> 0:11:47.440 them as a whole another story. Well, it's definitely a 0:11:47.520 --> 0:11:51.480 question of willingness. And Lauren at twenty six, with that 0:11:51.600 --> 0:11:55.280 kind of experience under her belt, is you know, a 0:11:55.280 --> 0:11:57.280 great ambassador for somebody who went out there and did 0:11:57.320 --> 0:11:59.240 that in spite of all the odds. I had a 0:11:59.240 --> 0:12:01.040 conversation with her esterday and she was telling me that 0:12:01.080 --> 0:12:03.760 she was the second black person to ever have worked 0:12:03.760 --> 0:12:05.960 on the New York Stock Exchange, which, really, when you 0:12:06.000 --> 0:12:08.920 think about it, the amount of people that have worked 0:12:08.920 --> 0:12:11.839 down there over the year is the entire history of 0:12:11.880 --> 0:12:15.360 the New York Stock Change heard the second black equity 0:12:15.360 --> 0:12:18.200 trader down there is really quite something phenomenal, I think, 0:12:18.440 --> 0:12:22.600 And if you read the Diversity Issue magazine, you'll see 0:12:22.640 --> 0:12:24.560 that all of these people seem to be one off 0:12:24.679 --> 0:12:26.880 and that's just not good enough. No, it's not And 0:12:26.920 --> 0:12:30.480 as as she was mentioning, um, as Lauren was mentioning here, 0:12:30.600 --> 0:12:32.840 there really has to be support. And we've heard a 0:12:32.840 --> 0:12:34.760 lot of talk not just from the senior folks on 0:12:34.800 --> 0:12:37.440 Wall Street, but just senior management is c suite in general, 0:12:37.640 --> 0:12:40.480 you know, over the last decade plus about commitment to diversity, 0:12:41.120 --> 0:12:43.520 but there it just doesn't bear out in the numbers, 0:12:43.520 --> 0:12:44.920 and we see that time and time again. And so 0:12:44.920 --> 0:12:47.160 that's why I think this Bloomberg Markets issue, there's a 0:12:47.200 --> 0:12:49.840 really good job that goes below the numbers and really 0:12:49.840 --> 0:12:51.959 talks to the people, interview some people that have worked 0:12:51.960 --> 0:12:53.920 on Wall Street black men, men and women, and they 0:12:53.920 --> 0:12:56.679 share their personal experiences and kind of really brings at home. 0:12:56.720 --> 0:12:59.520 So it's a good job by the team of Bloomberg Markets. 0:12:59.640 --> 0:13:02.320 And I'm gonna be looking forward to seeing what Lauren 0:13:02.360 --> 0:13:05.920 Simmons does next because she's clearly a trailblazer in her fields. 0:13:05.920 --> 0:13:08.280 So Thank you to Lauren Simmons for joining us and 0:13:08.360 --> 0:13:14.720 speaking about her experience. It's time for Bloomberg Opinion. We 0:13:14.800 --> 0:13:18.280 are joined this morning by Rachel Rosenthal, editor Bloomberg Opinion 0:13:18.360 --> 0:13:21.120 based in Singapore, out with a fascinating column, and it 0:13:21.160 --> 0:13:24.920 goes to that whole H one B visa issue that 0:13:25.080 --> 0:13:27.480 is making. It's always a political issue, but it's even 0:13:27.480 --> 0:13:29.720 a bigger one this year with President Trump looking to 0:13:29.960 --> 0:13:34.719 rein that in and uh, interesting column. Um, Rachel's out 0:13:34.720 --> 0:13:37.160 with this column, Big Tech wants you to believe in 0:13:37.200 --> 0:13:41.200 a skills gap. Titles suggest that maybe Rachel doesn't necessarily 0:13:41.200 --> 0:13:43.520 believe that. Rachel, thanks so much for joining us here. 0:13:43.960 --> 0:13:47.439 I've always heard from Silicon Valley that these H one 0:13:47.480 --> 0:13:51.080 B VISs are critical to their businesses because the US 0:13:51.160 --> 0:13:55.600 does not produce enough skilled labor. What's the real take there? 0:13:55.640 --> 0:13:58.800 Do you believe that? Um? Well, you know what, I 0:14:00.000 --> 0:14:02.200 into Stanford, so in the heart of Silicon Valley, and 0:14:02.200 --> 0:14:04.360 I very much believe the same. And you know, I 0:14:04.400 --> 0:14:07.000 think I would have agreed with you until about about 0:14:07.360 --> 0:14:10.920 feed or ten weeks ago when I started researching this piece. Um. 0:14:10.960 --> 0:14:13.320 You know, you start looking at the data and it 0:14:13.440 --> 0:14:16.720 just doesn't really add up. UM. And you know, if 0:14:16.760 --> 0:14:19.320 you look at the number of graduates that we have 0:14:19.400 --> 0:14:21.480 in computer science and engineering, if you look at the 0:14:21.560 --> 0:14:24.360 number of them graduates overall, and then you look at 0:14:24.360 --> 0:14:27.240 the number of openings, the number of vacancies, patterns of 0:14:27.240 --> 0:14:29.160 wage growth, and you look at a whole host of 0:14:29.160 --> 0:14:32.480 other things. Um, you start to see some that the 0:14:32.640 --> 0:14:35.800 thread really starts to unravel there, and you start you 0:14:35.840 --> 0:14:37.920 have to kind of ask yourself the bigger question. You 0:14:37.960 --> 0:14:41.720 know what, um, what do you tech companies want? And 0:14:41.760 --> 0:14:45.640 it's not just tech companies, it's companies across the tech industry. 0:14:45.760 --> 0:14:48.400 You know, they're tech workers and all kinds of fields 0:14:48.400 --> 0:14:50.040 that you know, I see you know, every kind of 0:14:50.080 --> 0:14:53.440 company has I F workers for example, so um, they 0:14:53.480 --> 0:14:57.160 could be in in retail, to restaurants. So UM. There 0:14:57.280 --> 0:15:00.560 is a lot of incentive to claim the there are 0:15:00.800 --> 0:15:03.960 enough skilled workers because you can get a pretty serious 0:15:04.040 --> 0:15:10.040 discount on on foreign labor um. And these are guest workers. UM. 0:15:10.120 --> 0:15:12.880 So I think. You know, there's a really fascinating paper 0:15:13.280 --> 0:15:16.040 upon which a lot of my research was based, UM, 0:15:16.160 --> 0:15:20.800 out of the Economic Policy Institute. It came out in May, UM, 0:15:20.840 --> 0:15:23.560 indicating that you know, there are four wage levels for 0:15:23.640 --> 0:15:26.280 each one vs UM, and the two lowest ones companies 0:15:26.320 --> 0:15:29.360 can get a discount. UM. It was up to you know, 0:15:29.560 --> 0:15:32.840 thirty six percent for the lowest wage bracket and eighteen 0:15:32.880 --> 0:15:35.280 percent for the second lowest. Now that was that that 0:15:35.320 --> 0:15:37.480 they had to look at a narrowest place within the 0:15:37.560 --> 0:15:41.000 DC metro area in a certain computer occupation. UM. But 0:15:41.080 --> 0:15:43.640 it was pretty telling to me that this kind of UM, 0:15:43.720 --> 0:15:45.560 this kind of discount can really add up and create 0:15:45.680 --> 0:15:49.120 huge savings and create incentives for this narrative to persist. 0:15:50.280 --> 0:15:54.600 So Rachel talked to us about degrees earned versus openings. 0:15:54.840 --> 0:15:57.120 So in the United States, for example, you know what 0:15:57.240 --> 0:16:02.480 degrees are earned versus openings? Sure, um, So if you know, 0:16:02.560 --> 0:16:04.800 I went through a lot of data which is UM 0:16:04.840 --> 0:16:09.280 you know, and they're about uh, roughly five thousand stem 0:16:09.320 --> 0:16:12.360 degrees UM in in the U s UM in the 0:16:12.680 --> 0:16:15.200 latest year that they attracted, which was twenty eight keen UM. 0:16:15.240 --> 0:16:18.200 So that's up six from a decade earlier. So people 0:16:18.240 --> 0:16:21.280 are you know, American students are getting lots and lots 0:16:21.280 --> 0:16:24.320 of degrees in in quote unquote STEM fields. And you know, 0:16:24.440 --> 0:16:26.840 I think you know those knees europe impuls would be like, oh, well, 0:16:27.120 --> 0:16:30.240 aren't all those graduates you know from abroad, and they're not. 0:16:30.440 --> 0:16:32.600 You know, what I found was that actually north of 0:16:32.720 --> 0:16:35.640 nine d son of them were actually American citizens and 0:16:35.680 --> 0:16:38.840 permanent residents. UM. Now that picture can change as you 0:16:38.880 --> 0:16:41.880 go up the scale in terms of UM graduate degrees, 0:16:41.920 --> 0:16:43.720 and there's that's a little bit of a different metrics. 0:16:43.760 --> 0:16:46.120 But UM, you know, when you look at the bachelor's 0:16:46.160 --> 0:16:50.200 degrees that are earned, a whole lot of them are Americans, 0:16:50.720 --> 0:16:54.280 Americans and permanent residents. And if you look at openings, 0:16:54.440 --> 0:16:57.120 you know, you have to consider that there are certain 0:16:57.160 --> 0:17:02.160 openings that go that typically would go to UM someone 0:17:02.160 --> 0:17:04.639 who had a specific type of degree that's called computer 0:17:04.680 --> 0:17:08.560 science degree or related computer science engineering field. UM. But 0:17:08.640 --> 0:17:13.040 that you know, not everyone in these fields necessarily has 0:17:13.240 --> 0:17:15.680 to have a computer science degree. I'm sure. I mean 0:17:16.080 --> 0:17:19.159 Steve Jobs themselves is a very good example. UM. But 0:17:19.280 --> 0:17:21.240 I know, you know, just from my time at Stanford, 0:17:21.280 --> 0:17:23.080 I know a number of people who ended up in 0:17:23.119 --> 0:17:25.760 tech who did not make during computer science UM. And 0:17:25.920 --> 0:17:28.199 it was actually pretty interesting that you know, two thirds 0:17:28.320 --> 0:17:32.359 of um I T occupation new entrants do not have 0:17:32.400 --> 0:17:35.200 a computer science degree. So then you have to consider 0:17:35.280 --> 0:17:39.040 the entire pool of UM American bachelor's degree owners as 0:17:39.080 --> 0:17:42.639 potential people who could be trained. And I think UM 0:17:42.840 --> 0:17:45.800 for for this type of work. And I think that 0:17:46.200 --> 0:17:48.520 you know, that is really a key feature in some 0:17:48.600 --> 0:17:50.720 of the research that I've done, is you know, why, 0:17:50.880 --> 0:17:53.439 what's the incentive to train someone when you've got you know, 0:17:53.600 --> 0:17:56.800 ready to work cheaper labor that's coming in from abroad. 0:17:57.760 --> 0:18:01.840 What do the tech companies say, UM, in response to 0:18:01.920 --> 0:18:05.480 kind of the economics of this the cheaper nature of 0:18:05.520 --> 0:18:09.680 some of these foreign workers is what's typically the response? Sure, 0:18:10.040 --> 0:18:12.359 I mean, I think the typical response would never be 0:18:12.440 --> 0:18:14.359 to say they are cheaper. And I think that there 0:18:14.400 --> 0:18:17.200 there is a tremendous backlash UM when Trump is issued 0:18:17.240 --> 0:18:20.479 is executive were in June? Um, you know, And and 0:18:20.520 --> 0:18:23.520 there are a lot of like really legitimate claims to 0:18:23.640 --> 0:18:25.639 be made that you know, a lot of there's a 0:18:25.640 --> 0:18:29.240 lot of intelligence and innovation and entrepreneurships UM that and 0:18:29.320 --> 0:18:31.640 that America is built in the foundation of immigrants, which 0:18:31.640 --> 0:18:34.000 I a hundred percent beliefs. But you have to remember 0:18:34.000 --> 0:18:36.640 the hm vvs as holders are not immigrants, I mean 0:18:36.680 --> 0:18:39.880 their guest workers, and and they are you know, get 0:18:39.920 --> 0:18:42.960 trapped in what's a lot of people called some version 0:18:43.040 --> 0:18:46.720 of indenture labor because they are tied UM, they're sponsored 0:18:46.720 --> 0:18:49.239 by an employer UM, and it's really difficult to move 0:18:49.240 --> 0:18:51.400 from one employer to another. So they you know, they 0:18:51.480 --> 0:18:54.000 they're they're they're kind of stuck and you know, they 0:18:54.040 --> 0:18:56.280 don't have UM. You know, they could be here for 0:18:56.280 --> 0:18:58.119 three years, they could be here for six years. Sometimes 0:18:58.119 --> 0:19:01.240 that six years gets extended, sometimes it doesn't UM. So 0:19:01.400 --> 0:19:04.040 you know, it's they're they're they're really suck. And I 0:19:04.080 --> 0:19:09.200 think that you know, they because their company sponsors their 0:19:09.320 --> 0:19:11.879 visa and because their visas side of their immigration status, 0:19:11.920 --> 0:19:15.080 and because their immigration status enables them to stay in 0:19:15.080 --> 0:19:18.000 the US, pay taxes, have families, and be part of 0:19:18.160 --> 0:19:20.320 you know, be part of the communities that they're part of. 0:19:20.720 --> 0:19:23.880 You know, they can't whistle blow on their companies. So 0:19:23.920 --> 0:19:26.280 I think, you know, it's very easy to paint this 0:19:26.640 --> 0:19:30.400 picture is UM, you know, anti immigrant UM, but it's 0:19:30.400 --> 0:19:33.080 really not, because I think the system actually really hurts 0:19:33.119 --> 0:19:35.080 not only American workers but which want to be these 0:19:35.080 --> 0:19:38.919 the holders as well. What happens to the American workers 0:19:38.960 --> 0:19:43.359 that don't get those jobs then? So you know, there's 0:19:43.359 --> 0:19:45.840 a number of things. You know, I think you could look. Um, 0:19:45.880 --> 0:19:49.040 you know, I've often casually wondered to myself like, why 0:19:49.080 --> 0:19:53.040 are there so many you know, computer engineers and finance 0:19:53.080 --> 0:19:55.560 and you know, it was always just sort of a 0:19:55.560 --> 0:19:57.760 curiosity to me that I never really thought twice about. 0:19:57.800 --> 0:20:00.080 But you know, if you think about it, when you 0:20:00.080 --> 0:20:04.439 know you're not seeing um wage growth, um, you know 0:20:04.520 --> 0:20:07.480 that I should mention that the wages in the I 0:20:07.600 --> 0:20:10.879 T sector, for example, are higher than the median UM 0:20:10.880 --> 0:20:15.040 wages in the US broadly, but they're not necessarily growing. 0:20:15.040 --> 0:20:17.080 I mean, I think there's this idea that you know, 0:20:17.600 --> 0:20:20.080 if you get a computer science degree or programming, you're 0:20:20.400 --> 0:20:22.800 you know, you know how to code, that you know, 0:20:22.880 --> 0:20:26.119 you're you're you've got a ticket to success. And I just, 0:20:26.200 --> 0:20:28.720 you know, I don't necessarily know that that's that that's 0:20:28.760 --> 0:20:32.560 the case. Um, So you know, I think that, UM, 0:20:33.040 --> 0:20:35.520 you know, this is this is something that you know, 0:20:35.600 --> 0:20:38.920 you just have to consider all aspects of Rachel. It 0:20:39.040 --> 0:20:42.040 is a fascinating bloombergiminion base, and we always love to 0:20:42.320 --> 0:20:45.200 focus on these because they tend to put out a 0:20:45.920 --> 0:20:50.120 little viewpoint that might differ slightly or even entirely with 0:20:50.400 --> 0:20:53.120 what's out there sort of in the ether. So Rachel's 0:20:53.119 --> 0:20:55.840 thanks for that. Rachel Wilson's Hall is editor at Zloomberg 0:20:56.000 --> 0:20:59.159 Opinion and her piece today, big tech wants you to 0:20:59.200 --> 0:21:02.320