The Wall Street Journal - USA (2020-12-02)

A4| Wednesday, December 2, 2020 PWLC101112HTGKRFAM123456789OIXX ***** THE WALL STREET JOURNAL.

Francisco, Boston and Wash-

ington, D.C., have lost billions

of dollars in revenue from

months of employees favoring

remote work.

Many restaurants, shops

and services that cater to a

business crowd are barely

hanging on, or have given up.

Paul McLaughlin, managing

partner of Oceana in Midtown

Manhattan, said this time of

year his seafood restaurant is

usually packed with holiday

parties, business lunches and

tourists who came to view the

Christmas tree at nearby

Rockefeller Center. This year,

business is down 85% to 90%

from normal, he said.

Even some of the first com-

panies to return to the work-

place are now having second

thoughts, reverting to remote

work and Zoom calls.

About three-quarters of the

25 employees at OhmniLabs

Inc., a San Jose, Calif., robot-

ics company, returned to work

this fall. But as infection rates

increased, OhmniLabs re-

versed its policy for all but

those directly involved in

manufacturing the robots.

from home at a number of
companies, many employers
would like to see more workers
back in the office where they
can collaborate more easily. In-
stead, companies are extending
their work-from-home policies
well into next year as infection
rates reach new highs.
The low level of employees
at their desks is intensifying
the pain for cities geared to-
ward office life. Cities’ popula-
tions are falling as people
working from home move to
the suburbs or other less
dense locations where they
can find more living space for
less money.
Apartment rents in down-
town San Francisco have fallen
20% since their peak in March,
according to CoStar Group
Inc., as residents leave. Metro
public-transportation systems
in cities such as New York, San

Continued from Page One

Office

Returns

Stall

PUERTO RICO

Previously Damaged

Telescope Collapses

A huge, already damaged ra-

dio telescope in Puerto Rico that

has played a key role in astro-

nomical discoveries for more

than half a century completely

collapsed on Tuesday.

The telescope’s 900-ton re-

ceiver platform and the Gregorian

dome—a structure as tall as a

four-story building that houses

secondary reflectors—fell onto a

portion of the vast reflector dish

more than 400 feet below.

The U.S. National Science

Foundation had earlier announced

that the Arecibo Observatory

would be closed. An auxiliary cable

snapped in August, causing a 100-

foot gash on the 1,000-foot-wide

dish and damaging the receiver

platform that hung above it. Then

a main cable broke in November.

—Associated Press

EDUCATION

School Closures Hurt

Math-Test Results

American children performed

nearly as well on average this fall

as last fall on a widely used test in

reading, but achievement slowed

in math since the coronavirus shut

schools in the spring, a nationwide

report on test results shows.

The report, released Tuesday,

looked at results for nearly 4.

million public-school children in

grades three through eight who

took the online tests at school

and from home. It found most

students made progress in read-

ing and math since the pandemic

started, though their gains in

math were slower on average

than usual.

NWEA, a not-for-profit educa-

tional testing and research group,

released the analysis of its MAP

Growth assessments, which are

used by thousands of schools na-

tionwide. The findings roughly

mirror trends found in different

online tests from Renaissance

Learning Inc., which last month

said children started school this

fall significantly behind expecta-

tions in math and modestly be-

hind in some grades in reading.

NWEA researchers caution

that its analysis likely underesti-

mates the real effects of Covid-19.

Depending on the grade, the

students’ median achievement

level in math dropped five to 10

percentile points, on average,

compared with typical years.

—Leslie Brody

U.S. NEWS

mate accord, and urge “Presi-

dent-elect Biden and the new

Congress to work together to

enact ambitious, durable, bi-

partisan climate solutions.”

The letter doesn’t detail any

specific action plan or policy

proposal, but it is the latest

indication that a significant

cohort of corporate America is

lining up with environmental-

ists on climate change.

Companies are responding

to pressure from both consum-

ers and their own workers

who are increasingly con-

cerned about climate change.

And they see a new president

and Congress, including some

conservatives, putting a bigger

emphasis on finding ways to

avoid catastrophic outcomes

from a warming Earth.

“Climate is going to be a

much bigger deal in the next

Congress because there is the

prospect of something hap-

pening” when previously there

was none, said Stephen

Harper, senior director of en-

vironment and energy policy

forIntelCorp., one of the sig-

natories. “It’ll be smaller stuff,

but hopefully it’ll be a patch-

work of things that add up to

make a difference.”

The letter was organized by

the Center for Climate and En-

ergy Solutions, or C2ES, an

environmental group that

works with businesses and

governments. Several of the

companies that signed it work

with and help fund C2ES.

“The United States has made

important strides—emissions

are down, and clean energy is

up,” the letter said. “With the

election of a new President and

Congress, we now have a criti-

cal opportunity to significantly

strengthen these efforts.”

The companies have

warned of rising costs from

climate-related disasters, and

at times in Wednesday’s letter

echoed Mr. Biden’s own cam-

paign, saying leveraging

American investment and in-

novation to respond can itself

boost the U.S. economy.

Corporate momentum has

been building in recent years

on the need to address climate

change. Several of the compa-

nies that signed the newest

letter—including Ford, Inter-

national Business Machines

Corp., Unilever PLC and Wal-

mart Inc.—have already signed

on to support taxing emissions

or have pledged to change

their business practices to

eliminate emissions from their

own operations.

Several of those companies

hope that by vocally support-

ing new legislation, it gives

Republicans cover to take ac-

tion in collaboration with

Democrats, Intel’s Mr. Harper

and others said.

President Trump has

worked to scale back many of

the country’s environmental

regulations, and sometimes

fumed at companies that

didn’t support his efforts.

WASHINGTON—A broad
cross section of big U.S. corpo-
rations includingAmazon.com
Inc.,CitigroupInc. andFord
MotorCo., are calling on Con-
gress to work closely with Pres-
ident-elect Joe Biden to address
the threat of climate change.
In a letter to be sent to Con-
gress and the Biden transition
team on Wednesday, more than
40 companies say they support
the U.S. rejoining the Paris cli-

BYTIMOTHYPUKO

Action Urged on Climate Change

Corporations call on

Congress to work with

Biden on issue, back

rejoining Paris accord

Bad loans are also higher. As

of the beginning of November,

2.3% of office mortgages that

were converted into mortgage-

backed securities were more

than 30 days delinquent, up

from 1.7% in February, accord-

ing to data firm Trepp LLC.

The San Francisco region

has been lagging behind all

others in the U.S. with a 13.4%

return rate as of Nov. 18, ac-

cording to Kastle. The Bay

Area is trailing partly because

of that city’s high reliance on

the technology companies that

early on allowed employees to

work remotely even before the

pandemic hit.

The office-return rate in the

New York City region is nearly

as bad at 15.9%. New York’s re-

liance on mass transit—and

concerns that the new corona-

virus could spread through

subways, buses or regional

trains—has kept many people

working from home.

At the other end, the Dallas-

Fort Worth region had 40.3%

of its workers back, Kastle

said. Texas has the benefit of

good weather, car-commut-

ing and a culture that has been

more resistant to shutdowns

than those in states such as

New York and California.

U.S. WATCH

JUSTICE DEPARTMENT

Alleged Pardon-Bribe

Scheme Investigated

The Justice Department was

investigating as recently as this

summer an alleged “bribery-for-

pardon” scheme, according to a

court filing made public Tuesday.

The court filing was issued by

Beryl A. Howell, the chief judge

of the U.S. District Court in

Washington, D.C., on Aug. 28. It

was unsealed on her order Tues-

day in heavily redacted form,

with most of the details of the

alleged scheme withheld.

Prosecutors said they were in-

vestigating allegations of a “se-

cret lobbying scheme” in which

at least two individuals were act-

ing as unregistered lobbyists try-

ing to persuade White House of-

ficials to grant an individual a

pardon or commutation, the filing

said. The scheme allegedly in-

volved “a substantial political

contribution in exchange for a

presidential pardon or reprieve of

sentence,” it said.

A Justice Department official

said that no government official

was or is currently a subject or

target of the investigation dis-

closed in the filing.

—Byron Tau

CALIFORNIA

Captain Charged in

Diving Boat Disaster

The captain of a scuba diving

boat that caught fire and sank off

the coast of California last year,

killing 34 people who were trapped

below deck, was indicted Tuesday

on federal manslaughter charges

for one of the deadliest maritime

disasters in recent U.S. history.

Jerry Boylan was charged

with 34 counts of seaman’s man-

slaughter for “misconduct, negli-

gence and inattention” by failing

to train his crew, conduct fire

drills and have a roving night

watchman on the Conception

when fire broke out Sept. 2,

2019, the indictment said.

“As a result of the alleged fail-

ures of Captain Boylan to follow

well-established safety rules, a

pleasant holiday dive trip turned

into a hellish nightmare as pas-

sengers and one crew member

found themselves trapped in a fi-

ery bunkroom with no means of

escape,” U.S. Attorney Nick

Hanna said. All 33 passengers

and one crew member perished.

A public defender who repre-

sents Mr. Boylan didn’t return

messages seeking comment.

—Associated Press

The radio telescope at Puerto Rico’s Arecibo Observatory collapsed, with its 900-ton receiver platform falling onto a reflector dish.

RICARDO ARDUENGO/AGENCE FRANCE-PRESSE/GETTY IMAGES

WASHINGTON—An influen-
tial bipartisan commission on
China recommended that Con-
gress expand the Federal
Trade Commission’s authority,
which would allow it to exam-
ine the influence of foreign
government subsidies earlier
in the process of considering
large mergers and acquisitions
involving foreign companies.
Companies aren’t currently
required to disclose such sub-
sidies to the FTC.
The latest recommendation
from the U.S.-China Economic
and Security Review Commis-
sion reflects growing concern
that the activities and invest-
ments of private U.S. compa-
nies are aiding the ability of
the Chinese government and
military, threatening Amer-
ica’s national security, said
Carolyn Bartholomew, vice
chairman of the commission.
In its annual report, the
commission said U.S.-based
companies that benefit from
the financial support of a for-
eign government should be re-
quired to submit to the FTC
detailed information on such
subsidies as part of the pre-
merger notification pro-
cess. Further, it said, the FTC
should develop a process to
determine to what extent pro-
posed transactions are sup-
ported by foreign government
subsidies.
The FTC can either propose
a modification to a potential
merger or prohibit the deal if
it finds foreign subsidies have
facilitated the transaction, the
commission said Tuesday.
The current premerger no-
tification process requires
companies to provide the FTC
and Justice Department with
information about large merg-
ers and acquisitions and wait
a certain period—usually 30
days— before closing. During
that time, authorities can
challenge the deals.
The commission also rec-
ommended Congress adopt
the principle of “reciprocity”
as foundational in all legisla-
tion regarding U.S.-China rela-
tions.

BYYUKAHAYASHI

Panel

Backs

More FTC

Authority

A federal judge in San

Francisco on Tuesday set

aside two Trump administra-

tion policies that required

employers to pay foreign

workers on H-1B visas signifi-

cantly higher wages and nar-

rowed eligibility for the pro-

gram valued by U.S. tech

firms and other employers.

The departments of Labor

and Homeland Security each

issued visa rules in early Oc-

tober as part of a long-

awaited tightening of the

H-1B visa program, which the

Trump administration argues

undercuts American workers

by allowing employers to hire

foreign counterparts for cov-

eted positions, sometimes at

lower salaries.

The ruling comes in a law-

suit filed by the U.S. Chamber

of Commerce, one of three le-

gal challenges filed against

the policy changes.

“This ruling has many

companies across various in-

dustries breathing a huge

sigh of relief today,” said Jon

Baselice, director of immigra-

tion policy for the Chamber

of Commerce. “Both of these

rules had the potential to be

incredibly disruptive to the

operations of many busi-

nesses.”

In a 23-page order, U.S.

District Judge Jeffrey S.

White of the Northern Dis-

trict of California took issue

with the way the policies

were issued on an emergency

basis, bypassing a customary

comment period.

The administration had ar-

gued it was justified in rush-

ing through the new rules, in-

voking what is known as a

good-cause exception to laws

governing how federal poli-

cies are issued, because of

soaring unemployment levels

spurred by the coronavirus

pandemic.

“The court cannot counte-

nance—reluctantly or other-

wise—defendants’ reliance on

the Covid-19 pandemic to in-

voke the good-cause excep-

tion,” Judge White wrote.

“The pandemic’s impact on

the economy is the only rea-

son DHS proffered as good

cause, and defendants do not

dispute that the failure to

provide notice and comment

was prejudicial.”

A spokeswoman for the

Justice Department, which

defended the rules in court,

didn’t reply to a request for

comment. The departments of

Labor and Homeland Security

also didn’t respond to re-

quests for comment. The

Trump administration could

appeal the ruling.

Though the two agency

policies were issued to-

gether in October, only one

of them, issued by the Labor

Department, took immediate

effect. That rule signifi-

cantly raised the minimum

salaries companies were re-

quired to pay their H-1B em-

ployees.

Under the new salary

benchmarks, an entry-level

electrical engineer in San

Jose, Calif., for example,

would be paid at least

$127,042, compared with an

$88,712 salary before the new

rule took effect, according to

Labor Department data.

A second policy, issued by

DHS, was set to take effect

within days. That rule would

have narrowed who qualifies

for H-1B visas based on their

specific higher-education de-

grees and would have short-

ened the length of visas is-

sued to some contract

workers, a change targeted at

the information-technology

industry.

Had they remained in ef-

fect, the new rules would

have made it tougher for for-

eign workers, particularly

new international graduates

of U.S. colleges, to qualify for

an H-1B visa and significantly

more expensive for compa-

nies to sponsor them.

BYMICHELLEHACKMAN

Trump’s

H-1B Visa

Rules

Set Aside

“Going forward we’re going

to continue to encourage people

to work remotely,” said Thuc

Vu, chief executive. “Let’s just

accept it as the new normal.”

Many in the real-estate in-

dustry now believe that a re-

turn to the office in large

numbers likely won’t happen

until well into next year as

federal and local governments

urge caution.

“People are slow to retake

going to the office primarily

because local-government offi-

cials are strongly encouraging

them to work remotely if at all

possible,” Mr. Linde of Boston

Properties said.

Office holdings have long

been a cornerstone investment

for major real-estate funds for

their steady and reliable in-

come. But values are falling

sharply as a growing number of

tenants dump sublease space

on the market or demand lower

rents from their landlords

when their leases expire.

Tenant searches for new of-

fice space have collapsed in

once-hot markets. In San Fran-

cisco, this search activity in

October stood at only 13% of

what it was in January 2018,

according to the VTS Office

Demand Index.

San Francisco is lagging behind other U.S. cities in office returns.

DAVID PAUL MORRIS/BLOOMBERG NEWS

The rules would

have made it

tougher to get the

H-1B visas.