On a rainy Wednesday, foot traffic was scant among the warren of alleys and streets that make up Manhattan’s Financial District. Save for the incessant sound of drilling, New York City’s famed engine of commerce looked depressingly depleted of life, a far cry from the pre-pandemic scene of fast-walking and fast-talking pedestrians.
“It’s very slow right now,” said Omar Naner, who owns America’s Deli on Trinity Place.
His customers were mostly the orange-vested construction workers that lately seem to outnumber suit-and-tie professionals. Naner said he has yet to see office workers come back in large numbers.
Listen to WNYC's Elizabeth Kim report on the impact a slow return to work will have on businesses:
“They like working from home and the bosses save money on rent, I guess,” he said.
Days after Mayor Eric Adams celebrated the lifting of some mask and vaccine restrictions as a key milestone in the city’s reopening, many business owners and experts remain deeply skeptical about workers resuming a five-day work week. The sluggish pace of the return, which was partly due to the omicron variant, underscores the belief that the pandemic has brought about a fundamental change in the ways people think about work and their desire to be in an office environment.
As of March 3, data from the security company Kastle, which measures turnstile swipes in buildings, reported an office occupancy rate of around 34% in New York City. That’s up 3% from the week before.
Since becoming mayor, Adams has repeatedly exhorted workers to return to the office, tying it to the city’s economic comeback. But in a telling pivot, he has recently softened his position on the five-day in-person work week, suggesting that some industries and employers may bring their workers into the office for fewer days. With some exceptions, municipal workers have been back at the office since last September.
“It is going to take us some time before we define what [the workplace during] COVID is going to look like,” Adams told reporters on Thursday at an unrelated press conference at the Hunts Point Cooperative in the Bronx. He said that some employers, like those in the tech sector, are “operating differently.”
Gov. Kathy Hochul has also acknowledged that the five-day office week may be a thing of the past. Earlier this month, she spoke about the delicate dance for employers who are struggling to retain employees in a competitive labor market.
“There's a sense that if one company tells their employees to come back, that they'll lose their employees who want flexibility to another employer,” she said on March 1, following an event in Harlem.
Hochul added that she envisioned a future where people come in “at least three to four days at minimum” so as to benefit from social interaction and in-person collaboration.
Those who study the labor market or speak regularly to business leaders say the shift by the state’s top two leaders, who are both Democrats, was unsurprising.
“Both the governor and the mayor have been talking to employers and have heard that there's a great deal of uncertainty about what the permanent schedule for return to work or remote work will be,” said Kathryn Wylde, the president of the business-lobbying group Partnership for New York City.
The mayor has held several meetings with business leaders, most recently on Wednesday. On Monday afternoon, he spoke at a town hall meeting with Goldman Sachs workers. Despite facing reluctance, many Wall Street firms, including Goldman Sachs and J.P. Morgan, have called for the resumption of in-person work.
“We were just talking about how we can do this together,” Adams told reporters afterwards. “How can we get this city up and operating?”
Wylde said that while many employers see the value of having their staff in the office, they are also worried about their mental health and the potential for burnout.
“There's a sort of PTSD syndrome coming from the workforce to employers,” she said. “And they're just trying not to put too much pressure, not to be arbitrary and to give it some time.”
The work-from-home phenomenon goes beyond New York City. According to Kastle, the average office occupancy rate among 10 major U.S. cities is 38%, led by Austin, Texas at nearly 54%.
“I don't think under the best of circumstances you're going to see the return to office approach 75% by the end of the year,” said James Parrott, an economist at the New School’s Center for New York City Affairs. “People's expectations have changed a lot. And I think businesses have also seen that it's not completely disruptive to their operations.”
During an interview on CNBC last week, Adams expressed confidence that he could usher in a full return to the office. “If I bring about the safety that's needed, and show the excitement of being back in the city, bringing tourism back to join the office atmosphere, New Yorkers are going to come back and be part of the economy,” he said.
His remarks were largely panned on Twitter.
Adams has sought to appeal to New Yorkers’ sense of civic duty, saying they need to support the “ecosystem” of retailers and food shops in business districts.
According to Parrott, New York City in January had 317,000 fewer jobs than before the pandemic.
“We can’t do it without each other,” he said on Monday, about the city’s economic recovery. “We have failed to show the connection of that waiter and the person who's in the corporate suite.”
Some have argued that the mayor is focusing too narrowly on the city’s traditional business districts. Data from Homebase, a company that provides work scheduling software for businesses, has suggested that small business activity in the outer boroughs has experienced a better rebound during the pandemic than Manhattan.
The work-from-home trend doesn’t “doom New York City,” Parrott said. “The activity is being pushed down in one area and it'll rise in other areas. That’s all.”
Jessica Lappin, president of the Alliance for Downtown New York, an advocacy group, said that it was premature to write off a full return to the office because of the importance of in-person interactions, especially for mentoring and career development.
“The casual conversations, the deep discussions about vision and goals and values — that doesn't happen unless you're in person,” she said.
On top of that, many companies now have employees who have never met their colleagues in the office.
“Having a sense of the culture of a company is very hard to do from your own living room,” she added. “And for a lot of companies that’s really important.”
Toward that point, at least two giants in the remote-friendly tech sector have been bullish on the future of the return to office. Google is investing $7 billion in expanding its office space across the U.S. Last September, the company spent $2.1 billion snapping up a former freight terminal on the Hudson River waterfront.
And in August 2020, Facebook committed to renting all of the available office space at the James A. Farley Building, the former post office that has been undergoing renovation. Facebook, which has allowed its workers to work from home during the pandemic, also has office space at Hudson Yards.
Interviews with small business owners and workers in the Financial District reflected mixed sentiments, with some saying they had seen slightly more foot traffic beginning this month.
Jessica Segarra, a hostess at Zaza, a restaurant on Greenwich Street that opened only a month ago, said she had noticed a lot more business diners.
A longtime New Yorker who is familiar with the area, she said she was confident that as companies installed health and testing protocols, employees would return. “I feel like everyone can stay healthy and still be back at their offices,” she said.
But others, especially longtime business owners, sounded more deeply pessimistic.
Fred Laleh, the owner of 21 Jewelry, a wholesale and retail dealer on Cortlandt Street, has weathered several big economic downturns in Lower Manhattan beginning with 9/11.
Laleh, who has run the store for 25 years, estimated that he had lost about 30% of his customers since the pandemic. In the past, he would normally stay open until 6:30 p.m., but he has now been closing the shop at 4 p.m.
“Because after 4 o'clock, nobody is outside,” he said, adding that he was also worried about crime.
Customers must be buzzed into his narrow brightly-lit store, where a glass display is packed with a glittering array of gold rings, earrings, necklaces and watches. Hanging on the wall is an old photo of Laleh standing beside “Law & Order” stars Jerry Orbach and Jesse Martin, who filmed an episode at his store’s prior location on Chambers Street.
“Hopefully, maybe within a year, maybe two years, everything goes back to normal,” Laleh said. "That's what I’m assuming.”
Jon Campbell contributed reporting.
A previous version misidentified the surname of "Law & Order" actor Jesse Martin.