Economic Recovery

Work from home or save the CBD?

Analysis: The massive push to return workers to the office raises questions about whether we're missing out on an opportunity to reshape the economy and reduce emissions, Marc Daalder reports

In recent days, Prime Minister Jacinda Ardern has shifted tone on working from home.

For weeks, throughout the Level 4 and Level 3 lockdowns, Ardern emphasised that employers and employees should prepare for a new way of working that would maintain boosts to productivity, emissions reductions and other benefits of working at home.

On May 12, the Prime Minister remarked she had long "encouraged employees to have conversations with their employers around whether or not they’ll continue working from home or whether they’ll be coming into their place of work, and I really want to encourage those conversations to be had".

"I imagine some workforces will be looking to lock in the productivity gains that were made when people were working from home, and that’s one way that they can do that," she said.

On Monday, as Ardern announced the move to Level 1, the message has shifted.

"There has been some good adaptation over the past couple of months with flexible working. This is progress and has helped people with care arrangements and has also helped to avoid traffic congestion – these things we should not lose. But we can balance that with ensuring we also have thriving CBDs."

But are we risking missing out on the benefits of flexible working arrangements, just so Wellington can keep the global crown of most cafes per capita?

Public sector ordered back to work

Saving the CBDs would begin with the public sector, Ardern said. The Government has instructed the State Services Commission "to issue new workplace guidance to make it clear that every public sector worker should return to their usual place of work, taking into account [extant] flexible work policies".

This is despite a strong preference from many public sector workers for working from home. Director-General of Health Ashley Bloomfield said that nearly 80 percent of Ministry of Health staff would like a mixture of working from home and in the office.

The Government's decision to push most public sector employees back to the office came a day before a survey found nearly two thirds of Wellingtonians would prefer to work from home more often.

On Wednesday, AMP Wealth Management announced it would ditch its offices in downtown Wellington and Auckland, as 70 percent of its 350-strong workforce preferred to work from home. Smaller hubs will be set up in suburban areas to accomodate in-person requirements and those employees who prefer an office.

While central city businesses cry out for customers, the Government appears to have caved, with little intention of seizing the opportunity to lock in those productivity gains and other benefits of the new, post-Covid economy.

Brad Olsen, a senior economist at Infometrics, told Newsroom he felt the Government was trying to return to the way things were before the pandemic. However, he was optimistic the public sector would, in the medium term, come around to more flexible working arrangements.

"I knew people in government departments who were already able to work from home [before Covid-19]. I think what this will probably do is, in the short term, everything is back as much as possible towards normal. I do expect though that, after that, I would imagine there will be conversations about how you best resource people," he said.

Central cities concerned

But this push to empty out CBDs has local businesses like cafes particularly worried.

Business NZ chief executive Kirk Hope told Newsroom central city businesses were struggling with the absence of office workers.

"Where you have large public sector workforces, it is important that those decisions are made quite quickly about where people will be working, when. So that some of those businesses around those organisations know what their demand is going to look like," he said.

Tamatha Paul, a Wellington City councillor representing the central city who holds the city's climate change portfolio, said there was a balance to be struck.

"We're trying to push this 'Love Local' campaign, which includes people supporting their local cafes in their neighbourhoods. Maybe Covid has also made the case for us investing in those suburban settings," she said.

Olsen is optimistic that, in the long term, Covid-19 will have reshaped the way we work for the better. It won't be everyone working in the office or everyone working from home, but greater flexibility will be introduced.

"Any changes we see to work operations, there's not going to be a wholesale reversal of fortunes or a wholesale reimagination. It's a rapid evolution in many respects, but it's not a complete revolution," he said.

Paul said she could see both sides of the issue.

"It would be good to get a balance of both. For people who are willing to and able to come back to office work, then they should do that. For those who can't, they can still stay home. It just needs to be flexible," she said.

"My view is that it won't be an all or nothing proposition," Hope agreed.

"Not everyone will return to CBDs. Many people will return, but the shape of their week might be different."

Benefits of work from home

That added flexibility could allow working parents to share childcare duties, and allow people to work when and where they are most productive, instead of following a strict nine-to-five schedule.

Of course, much of this pertains only to office workers - retail and hospitality workers, for example, may not be able to work remotely.

"I do suspect that a lot of this conversation is focused more around office workers, who are a big part of the economy but they're not the only part," Olsen said.

Empty office buildings, like those AMP is leaving behind, could even be converted into housing, Olsen suggested.

The other benefits could be environmental. While Wellington City's greenhouse emissions fell 7 percent between 2001 and 2019, the greater Wellington region has seen a 14 percent jump in transport emissions over the same period. More people are commuting to work from distant suburbs, adding to congestion and emissions.

Newsroom has previously reported on the wholesale transformation Auckland needs to see in its transportation system over the next decade. Research concluded that big ticket public transport projects like the City Rail Link would hardly make a dent in transport emissions.

What about the congestion and emissions?

Across the country, the same pattern can be seen. Between 2007 and 2018, household emissions leapt by nearly 12 percent - and almost all of that was due to an increase in transport emissions.

The one thing that does truly reduce emissions, regardless of where you are? Fewer cars on the road.

For example, reducing the number of trips in Auckland by 10 percent would cut emissions by 351,000 tonnes - 12 times the City Rail Link's impact.

Traffic would also be reduced, potentially alleviating the need for some major investments in road expansions.

"If you have generally more flexible working conditions, then you could at least eliminate some of the congestion you see at peak travel hours," Olsen said.

However, Paul says cities still need to put more money into public transport and active transport - walking and cycling.

"A four-day in-real-life work week and one day a week you work from home, something like that could be quite good in terms of our emissions. But really, there's no substitute to a good, cohesive, affordable and accessible public transport system," she said.

"If we're looking at our emissions, the answer isn't to tell people to stay in their homes. The answer is to have systems that actually work and can get people from Point A to Point B safely, quickly and sustainably."

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