GLP-1 and women, the AI office boom, and RTO: CEO ego?

0:00N. P. R.

0:06This is The Indicator from Planet Money. I'm Waylon Wong. And I'm Darian Woods. And joining us today, a man who is cooler than the other side of the pillow, one Cooper Katzmachem. Thank you for having me. Yes, I'm wearing three fedoras right now, if you can't see. Cooler than cool. Now, Cooper, you're here right on time because today is... Indicator of the Week! It's the day of the week where we talk about our favorite numbers from the news. And today we're covering GLP-1s and women's employment. Office space in New York City. So hot right now. And is your CEO a narcissist? All of that after the break.

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1:35Emma Ferrara:They make sleep easy. Restrictions apply. See mattressfirm.com or store for details. This message comes from NPR sponsor Charles Schwab with its original podcast on investing. Each week, you'll get thoughtful, in-depth analysis of both the stock and the bond markets. Listen today and subscribe at schwab.com slash oninvesting or wherever you get your podcasts. It's Indicators of the Week. Waylon Wong, why don't you go first? My indicator is 26.9 percentage points. That is the increase in the employment rate for women who are not working and then take GLP-1s to lose weight. And this number comes from a new working paper by Harvard economist Rebecca Diamond.

2:1927 percentage points. That's quite a result. Yeah, I mean, the numbers definitely made a lot of waves among economists this week, and there was some online debate about whether, you know, these numbers are too high. OK, so how did Rebecca get to this number? So she used a data set of about 10 ,000 U.S. residents, and she studied two groups. One is women who have started taking a GLP-1 to lose weight. The other is women who want to start taking a GLP-1 but have not yet done so. These two groups are otherwise similar in terms of their income, employment status, their body mass before treatment, and some other factors.

2:54And so I guess the issue is whether or not there are kind of unmeasurable factors that might mean that the women that end up going on these GLP-1s are different from the ones who didn't. Yeah, I mean, and this was not like a randomized control trial, right? This was two groups of women who have self-selected to say we are interested in taking GLP-1s to lose weight. But even when you account for that, the analysis produces some pretty dramatic results that people are looking at. Like that 26.9 percentage point increase in the employment rate, that is a year and a half after treatment. OK, so this is maybe an unsurprising but still depressing commentary on how society views women of different sizes.

3:37Yeah, and there's a pretty rich body of economic research out there showing that heavier women work less and earn less. It's, of course, trickier to pin down how much of that disparity is due to body weight discrimination. Rebecca Diamond, who is the economist at Harvard who did this study, says her results point to something called a first impression obesity penalty. So if you think about a woman who isn't working, she starts taking a GLP-1 and loses weight, and then maybe she makes a really good first impression at a job interview, you know, a better impression than a woman of similar qualifications who is in a larger body.

4:16This seems to be a real splash in what I'm sure will be a rich body of research to come. Oh, for sure. Super interesting, especially given the effects are so large. and I will be watching what research comes out on GLP-1s and how it affects society to come. Now, Cooper, I'm super interested in your indicator. It's about the city that I live in. And also me. And also you. My indicator is 1 million. That's the square footage that AI companies have leased in both of our cities, New York City, so far this year. We're only in June, but we've already outpaced the total amount of office space leased in all of last year.

4:53I am having such whiplash because I feel like it was just yesterday when we were like, tumbleweeds are blowing through the empty office spaces in New York. Like, no one's in the office. Yeah, so we're actually in prairie country, New York now. So tons of companies did can their offices during the pandemic. There was this whole era of people sending workers home. People were remote. They were hybrid. Or the companies just went under. And the peak actually happened way later than I expected in 2024 when 15 % around of office space sat empty in New York City. So not that long ago. Yeah, there were these think pieces about what the empty office space would mean for city's taxes.

5:33I imagine local leaders must be happy right now. Yeah, office buildings pay a lot of money in property tax. A report from 2023 says roughly 10 % of the city's taxes come from office space. So during this era of high vacancy, there was concern about a doom loop. where empty office spaces would crash property tax revenue, force budget cuts that ruin the whole city, and everything falls apart and everything's horrible. Okay, but we did not get the doom loop, is what you're saying. No, everything's perfect. No, I'm specifically talking about New York here. But across the country, the commercial real estate revival is a little more fragmented.

6:08But an important thing to note, this AI boom seems to be saving New York real estate for now, but AI is the boomiest boom there is. No one's sitting back and saying problem solved to commercial real estate because there's a chance the better AI gets, the less companies will actually need people. I thought you were going to say the bad scenario is that like part of this AI spending boom is going to be a bubble. And then when a bunch of AI companies go bust, then they're not going to need that office space anymore. And we're back to the doom loop. I know it is certainly front of mind. Tech stocks dipped globally this week.

6:40Analysts are saying this could be the beginning of the end, the beginning of the bubble bursting. And the city comptroller said, quote, I feel like we have a freight train coming down the tracks. In a good way? I mean, it's a win for now, but it's also kind of a hold your breath moment. Thank you for that really interesting indicator. Darian Woods, what do you have? Mine is quite related, which is all about why we're being asked to come back into the office all around the economy. And my indicator of the week is 259. And that's how many CEOs were analyzed in a recent study on remote work. This study concluded that CEOs who appeared more narcissistic were more likely to resist remote working.

7:24Interesting. Okay, so this is like we're like psychoanalyzing CEOs now. Yeah. And we've talked about remote work on this show before. The last few indicators of the week over the last month, we've talked about it. We're talking about the downsides of remote work. things like worse mental health, hesitance to hire junior workers. But this paper, just published in an organizational behavior journal, shows another side of the debate, namely that mandates to come back to the office full-time can be more about the boss's ego than about productivity. Darian, what if the boss is just lonely? Yeah, won't someone think of the boss's?

8:04Lonely and maybe in need of someone to lord over. Maybe there's a boss loneliness epidemic. Have you ever thought about that? Nobody talks about it. Now, of course, for some jobs you need to work in person. A construction worker cannot build a house remotely. But for jobs where people can work remotely, the wider body of evidence does not show that always working in the office increases productivity or boosts a company's stock price. You know, when this is mandated, maybe some workers become more productive. But there's a huge hit to worker morale, and the company loses staff. Okay, then how does all of this square with the problems in remote work that you identified, like the lack of mentorship and connection and that stuff?

8:48So I don't think the papers are in conflict. You know, researchers on remote work are coming to this semi-consensus, like an emerging agreement that hybrid is the best for many workplaces, ideally with coordinated days in the office, maybe two or three days. So this study shows that full-time office mandates are on shaky foundations as maybe fully remote, on the other hand, all the time. Put me back in the office. I want to house every commercial office space.

9:24All right. Well, thank you, Cooper, for joining us on Indicators of the Week. Always fun to see you on this side of the camera. Thank you for having me with my now five fedoras. I gotta find a pork pie hat. This episode was produced by Angel Carreras with engineering by Kwasi Lee. It was fact-checked by Corey Bridges and Emma Ferrara. Kate and Cannon edits the show, and The Indicator is a production of NPR.

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