Media titan Michael Bloomberg has had it with federal employees logging in from home, saying taxpayers are footing the bill for empty offices.
Bloomberg’s co-founder, CEO and majority shareholder delivered a scathing view of federal agencies which are still allowing staff to work from home the majority of their time in an article for The Washington Post.
The man worth $94.5 billion describes the capital city as a “shadow of its former self”, claiming tax money is being wasted on empty offices and the public is getting worse service.
“This has gone on too long. The pandemic is over. Excuses for allowing offices to sit empty should end, too,” Bloomberg—who was the Mayor of New York from 2002 to 2013—wrote.
A report from the United States Government Accountability Office published in July revealed that federal agencies spend around $5 billion a year to lease office buildings, and a further $2 billion on maintaining and operating offices regardless of utilization.
However, the analysis, which worked with 24 government agencies, found that 17 of the organizations were using the sites less than 25% of the time.
Although the report found that agency managers were reluctant to share office space with other federal teams, it pointed out that any reduction in office space would reduce both costs and energy consumption.
As Bloomberg puts it: “Some people argue that remote work for federal employees isn’t a problem. Tell that to the taxpayers who are footing the bill for empty floor space and the costs of maintenance, as the GAO emphasizes.
“Tell it to the small businesses that are suffering, whose tax payments fund city services. Tell it to the many residents who rely on those services, especially poor people and elderly people.”
The Biden administration has been pushing federal employees back to their office chairs—though Bloomberg, who himself harbored ambitions to become president in 2020, feels not hard enough.
In April the Executive Office of the President said there was an “expectation” that “agency headquarters and equivalents [plan to] generally continue to substantially increase meaningful in-person work in Federal offices.”
It caveated this with: “Agencies should still use flexible operational policies as an important tool in talent recruitment and retention.”
Private offices are another matter
The argument for talent retention and recruitment is acknowledged by Bloomberg as reasonable—but more relevant to the private sector.
The difference between federal employees and private staff is choice, he points out: “Remote work by civil servants is especially troubling because the federal government is a monopoly supplier.
“In the private sector, if remote workers do a poor job, business suffers and customers take their spending elsewhere. In the public sector, people just have to put up with poor service.”
According to a new report from workplace utilization specialists XY Sense—which took into account approximately 25,000 office spaces across 17 countries—private sector office use is faring just as badly as its public counterpart.
In North America average utilization for Q1 of 2023 was 21%—33% lower than the average recorded across the rest of the globe.
Empty offices are a problem that could result in another run on the banks, some economists have warned, with swathes of new office buildings financed on short-term loans with no leases taken out to pay for it. Morgan Stanley estimates that $1.5 trillion in commercial real estate loans are due to be repaid by 2025.
With 176 offices across the world—some of which cost more than $1 billion to build—it’s perhaps not a surprise that Bloomberg is keen to get his own staff back through the doors, a sentiment echoed by JPMorgan CEO Jamie Dimon.
More than 80% of staff are in more than three days a week Bloomberg said—though added “there will always be exceptions” to this rule—and in the fall the majority will go back four days a week.
Bloomberg concluded that hybrid work offers could even be valuable in order to increase competition in the job market—especially when recruitment and retention is a challenge.
But he finished: “There’s no good reason why government workers have been so much slower than everyone else to get back to the office at least a few days a week.
“Taxpayers deserve immediate action and hard deadlines—and the better service and stronger capital city that will result.”