White Collar Employment
Following last week’s CREview on office space, one reader noted there was no reference to white collar employment.
Ask a young person about white collar employment and the first reaction may be, “no one wears white collars anymore”. They do, just not in the numbers when the term was created.
White collar employment was always the slide in any office market presentation that was ramped up at 45 degrees, highlighting that future demand for office space will continue at that trajectory forever.
That changed with the Dotcom era in several ways. Polos and chinos were introduced, and we saw fewer starched white collars.
More importantly, that tech revolution changed the whole concept of work. It increased the number of office workers and the demand for offices. It also brought in more open plan offices and hotdesking to reduce the cost of real estate to house the increase in workers. In the space of about 5 years, we saw many office densities drop from 13-16 m2 per workpoint to about 10 m2 per workpoint.
Then came growth in mining and resources, pushing Perth and Brisbane office markets to record highs, whilst Sydney and Melbourne enjoyed the increases in the office workers in the non-resources sectors.
So, the tech boom of the late 90’s and the resources boom of the early 2000’s increased office workers. And since then, office worker growth has dropped off to the extent that Deloitte Access Economics predicted that white collar growth would only increase by 0.9% in 2024-2025.
What will the AI boom do to office workers? We don’t know yet, just like in the mid 1990’s at the start of the Dotcom era. But we are guessing that it won’t increase office worker growth over the next 20-30 years as it did in the last 20-30.
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