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Returning From Parental Leave Can Be Stressful. How Some Employers Aim to Fix That.

Sarah Tucker-Ray, a partner in McKinsey’s Washington, D.C., office, felt a lot of trepidation when she took a six-month parental leave in 2022.

“There is fear about, ‘Am I going to get written out of the story?’ ” says the 36-year-old Tucker-Ray, whose daughter, Viviana, was born in August 2022. “Is someone going to step in for me and take over? How will I come back?”

She addressed those fears in a reintegration plan that she drafted before going on leave. It included instructions for those who would be covering her workload while she was out, and it laid out what she wanted her job to look like when she returned. For example, Tucker-Ray didn’t want her role to change significantly, but she asked to not be given any internal projects—those focused on McKinsey’s own operations versus those of outside clients—during her first six months back. She also thought about small stuff, such as writing down all of her passwords, and she connected with other working mothers at the company who served as peer counsellors before she went on leave.

“They told me that the goal for week one is to get dressed, have breakfast with my baby, get into a suit without getting spilled on and get out the door,” she says. “It sounds so basic but I hadn’t had to do that yet.”

The days, weeks, and months after a new parent returns to work after leave can be a critical and challenging time for an employee. Many experience anxiety about how they are going to manage work and parenting, and some end up feeling like a failure at both.

To address that, some organisations have launched formal “reboarding” programs that structure those first months back after leave so they aren’t overwhelming for new parents, while also providing them with emotional support. McKinsey tested such a program in Europe and then expanded it globally

Many see it as a business imperative. Organisations are making substantial investments in paid maternity and paternity leave—in 2023, 40% of organisations in a Society for Human Resource Management survey offered paid maternity leave and 32% offered paid paternity leave—and they want to ensure new parents return to work and are productive and content when they do.

Tucker-Ray was happy to learn that McKinsey would cover the cost of her daughter and her husband to join her on a business trip. PHOTO: ELIZABETH FRANTZ FOR THE WALL STREET JOURNAL
Creating a plan

A successful reboarding program requires planning, and it and starts long before an employee goes on leave, consultants and HR leaders say. It begins with mapping out a comprehensive work-coverage plan, including if and under what circumstances the employee wants to be contacted about work while out on leave. The plan also should create clear expectations about what the return-to-work will look like, including the employee’s job description post-leave and even an explanation of what that first daunting day back might entail.

Many reboarding programs also connect new moms with experienced working parents or colleagues who have recently returned from parental leaves, as well as a coach (often an outside consultant) who can help set priorities and guidance on best practices.

When Maria del Mar Martinez became head of McKinsey’s diversity, equity and inclusion efforts in Europe in 2018, she learned that working moms left the management-consulting firm at nearly double the rate of their childless female peers with similar tenure. In exit interviews, women shared common grievances, including the challenge of balancing parenthood with a demanding job, a lack of support from their managers and few role models.

She heard similar sentiments in Asia and the U.S.

“That was a business problem,” says del Mar Martinez, now the global head of DEI at McKinsey. “I don’t want to lose those amazing women coming up the pipeline.”

To combat attrition, del Mar Martinez created a reboarding pilot program in Europe that included coaching employees before, during and after a parental leave. (Men are eligible to take part in the program if they have taken 12 weeks or more of leave.)

Built into the plan was a guarantee that new parents would have “meaningful work” upon their return, with the option of slowing down if that’s what they wanted, says del Mar Martinez. One issue, she and others say, is that managers often incorrectly assume that new mothers want lighter workloads or don’t want to travel, which is why it’s important for employees to spell out their preferences in a reboarding plan.

The McKinsey pilot required managers to confirm they understood their employee’s reintegration plan and to calibrate goals in performance reviews to ensure the person taking leave wouldn’t be penalised.

It worked. McKinsey closed the European attrition gap in 18 months, del Mar Martinez says, and later expanded the program globally.

The manager’s role

Other companies are increasing the support they offer to new parents, too, including Wall Street’s Morgan Stanley, which in 2019 appointed Allyson Bronner head of family advocacy at the company’s institutional division, a full-time position that focuses on supporting employees before, during and after parental leaves.

Bronner says one of the best ways to ensure a successful return experience for new parents is to include managers in the process.

To that end, she meets with an expecting employee’s manager between the 25th and 30th week of pregnancy to preview what the employee’s return-to-work will look like and discuss best practices for easing the transition.

“It’s important to set the scene and give them tools to manage their employees,” she says.

She says her next meeting with the manager occurs about a month before the employee is due back to discuss how the first month should be structured. She suggests the manager call the new parent two to three weeks ahead to preview what the first few days back will look like—namely, checking email and showing colleagues baby pictures.

The support continues throughout the first several months, with managers having weekly check-ins with the employee for the first six weeks and then monthly check-ins after that. Bronner encourages managers to ask new parents how they are doing and how their child care is going to determine whether they would benefit from more support or advice in that area.

Since Morgan Stanley created the family advocacy role, “it feels like there has been a culture shift,” Bronner says. “It’s hard to quantify in numbers, but culturally it feels like we’re moving in a more positive direction.”

A culture shift is also under way at chip-equipment maker ASML, which recently expanded the paid parental leave it offers and in May joined forces with employee-benefits firm Parentaly to create a support system for new parents.

ASML is in a male-dominated industry, says Karen Reinhardt, the firm’s chief human-resource officer in the U.S., so retaining women is critical to having a diverse workforce.

As of December, 82 employees had registered for the reboarding program, “more people than we expected,” Reinhardt says.

Among them is Meredith Polm Sheain of San Diego, a knowledge-management developer who went out on maternity leave in late August. In her reboarding plan, she made clear that she wanted to be notified while on leave about any bumps in a recently launched product. She also laid out her priorities for the first two months of her return.

“I felt so much better about the concept of returning to work once I gave my team this plan,” says Polm Sheain, who returned to work on Dec. 22. “I left them and myself in the best position I could.”

Reboarding isn’t the only new benefit companies are offering to make life easier for new parents.

McKinsey’s Tucker-Ray was asked to attend a partner conference in Atlanta about six weeks after returning from maternity leave. The firm covered the cost of her daughter and caregiver (her husband) to join her on the trip since she was still breast-feeding.

“I would have been torn about going away for nearly a week for an internal event but it became a nonevent,” she says. “It got rid of the barrier to feeling you can’t participate fully in parenting and be a leader.”

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It’s One of America’s Most Expensive Cities, and Home Buyers Can’t Get Enough

It’s an area already popular with the likes of Oprah Winfrey, Ellen DeGeneres, Prince Harry and Meghan Markle.

But now the affluent Santa Maria-Santa Barbara metropolitan area on the Central Coast of California nestled between the Santa Ynez Mountains and the Pacific Ocean has ranked as the top housing market in the latest Wall Street Journal/Realtor.com Emerging Housing Markets Index, released Wednesday.

It’s a surprise result for the quarterly index, which has, until now, typically seen more affordable cities rank at the top—Topeka, Kansas, took first place in the prior iteration of the report, released in fall, and Lafayette, Indiana, in the summer ranking.

“Santa Maria-Santa Barbara topping the list serves to highlight the division in today’s housing market,” said Danielle Hale, chief economist at Realtor.com. It’s the one and only West Coast market in the top 20, and, with a median listing price of $1.795 million in December, the highest-priced market by more than $1 million.

The top five cities in the index were rounded out by Jefferson City, Missouri, where the median listing price was $302,000 in December; the Canton-Massillon metro area in Ohio ($230,000); Racine, Wisconsin ($334,000); and the Oshkosh-Neenah metro area in Wisconsin ($295,000).

“Many housing markets cooled off after the pandemic’s run-up in prices and inventory-depleting demand,” Hale explained. “The markets that have continued to chug along, and even gain steam, are either priced low enough that buyers can compete, or priced high enough that the typical affordability constraints are not of concern to the market’s buyers.”

The latter is the scenario that’s playing out in Santa Barbara.

The index analyses key housing market data, as well as economic vitality and lifestyle metrics for the largest 300 metropolitan areas in the country to highlight emerging housing markets that offer a high quality of life and are expected to see future home price appreciation. It identifies markets that those considering a home purchase should add to their shortlist—whether the goal is to live in it or rent.

Santa Barbara “offers perhaps the finest lifestyle in the U.S.,” said local agent Luke Ebbin of The Ebbin Group at Compass. “Three-hundred days of sunshine and warm weather, a relaxed pace of living, proximity to uncrowded beaches, mountain hikes, fine food and wine, and incredible cultural offerings more often found in major metropolitan areas.”

However, with that median listing price of $1.79 million—more than four times the national median—the price tag attached to the idyllic locale is well out of range for many would-be buyers.

“Though Santa Barbara is among the highest-priced large housing markets in the U.S., buyers in the area have seen similar trends to buyers in other more affordable markets,” Hale said. “For-sale inventory fell rapidly during the early days of the pandemic, and has not recovered much as demand waned in the area and homeowners chose not to sell.”

As a result, “buyers hoping to snag a median-priced home are facing more competition, which has driven prices higher,” she said.

In December, 71% of homes on the market in the metro were priced at $1 million or higher, up from the same time in 2019, when the metric stood at 62%.

“Buyers who have been eager to purchase here and have been on the sidelines due to low inventory and high interest rates are entering the market as rates decline and more inventory becomes available,” Ebbin said. That “low inventory and high demand are keeping prices elevated.”

It should come as no surprise then that Santa Barbara boasts an affluent population who “are drawn to the area’s lifestyle, amenities and upscale housing options,” said Santa Barbara-based agent Jason Streatfeild of Douglas Elliman.

Santa Barbara has “long been a popular destination for retirees, especially those seeking a mild climate, beautiful scenery and a relaxed coastal lifestyle,” Streatfeild said, noting that many migrate from colder regions of the country, as well as from other parts of California.

Not only charmed by the balmy wealth, individuals from far and wide are equally wooed to the area by its thriving entrepreneurial community, and Santa Barbara’s “robust job market, including opportunities in technology, healthcare, finance and education, attracts professionals from various parts of the country,” Streatfeild said. “Some may relocate from major metropolitan areas like Los Angeles, San Francisco or New York in search of a more balanced and less crowded lifestyle.”

Indeed, out-of-towners appear to be driving demand in the coastal enclave, according to search data from Realtor.com. More than three-quarters (79.5%) of views to Santa Barbara home listings on the site came from outside of the metro in the fourth quarter, with a notable amount of attention coming from the Los Angeles (32.8%) area, according to the index. House hunters from Silicon Valley, Atlanta and New York City were also shopping in the area, according to Realtor.com data.

Meanwhile, Prince Harry and Megan Markle are prime examples that “Santa Barbara’s appeal extends beyond U.S. borders,” Streatfeild said.

The University of California, Santa Barbara, also attracts a global cohort—along with plenty of domestic new residents—who move to the area to pursue higher education.

The Santa Barbara metro area “attracted a sizeable 3.3% of its listing viewership from shoppers outside of the U.S.,” Hale said in the report. “Suggesting that international demand is applying pressure to already high prices.”

For comparison, “the average international viewership share across the 300 ranked markets was less than half (1.4%) the viewership share in Santa Barbara,” she added.

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Europe’s Stagnating Economy Falls Further Behind the U.S.

Europe’s economy stagnated in the final three months of last year, expanding a divide between a booming U.S. economy and a European continent that is increasingly left behind.

The fresh economic data showed higher borrowing costs had compounded the earlier impact of higher energy prices in the wake of Russia’s invasion of Ukraine.

By contrast, the U.S. economy has been expanding robustly and enjoyed its strongest performance relative to the eurozone since 2013—with the exception of the Covid-19 pandemic.

One factor that is threatening to weigh further on the European economy is its proximity to geopolitical flashpoints. Russia’s war on Ukraine sent energy prices rocketing in 2022, hitting European manufacturers. The U.S., as an energy producer, was comparatively unaffected, and its natural-gas industry even benefited when it became Europe’s energy supplier of last resort after Russia throttled gas deliveries to the region.

Now the crisis in the Middle East, which has gummed up cargo traffic through the Red Sea, is adding costs to European importers and disrupting European supply chains. There too, the U.S. hasn’t suffered as much since it has alternative routes for goods coming from Asia.

Europe’s Stoxx 600 index rose 12.64% last year, a little over half the performance of the S&P 500, which rose 24.23% over the same period.

The European Union’s statistics agency Tuesday said gross domestic product in the eurozone was unchanged in the final three months of last year. That followed a decline in the three months through September. During 2023 as a whole, Eurostat recorded growth of just 0.5%, while the U.S. economy expanded by 2.5%.

Still, the divergence between the giant economic blocs is more a story of surprising U.S. strength than unanticipated weakness in the eurozone. The U.S. grew much faster than economists had expected it would at the start of 2023, while the eurozone was about as badly hit by high energy prices and rising interest rates as had been expected. Economists forecast the growth gap will narrow somewhat in the course of the year.

Europe’s policymakers don’t expect the stagnation in output to extend deep into 2024. Instead, they see a pickup in activity as wages rise faster than prices, reversing the declines in real incomes that followed the war in Ukraine and a rise in energy and food bills.

“We have the conditions for recovery that are coming into place,” said European Central Bank President Christine Lagarde Thursday. “I’m not suggesting that it’s going to pick up radically, but it’s coming into place from what we see.”

Helping Europe is the fact that energy prices are falling from post-invasion highs faster than policymakers had expected. That should help boost household spending on other goods and services and lower costs for Europe’s hard-pressed factories.

With inflation easing, the ECB is expected to lower its key interest rate later this year, which would also jolt growth by easing the pressure on household spending and business investment.

Yet the eurozone faces fresh threats too, mainly from the conflict that began with the attack on Israel by Hamas on Oct. 7. Disruptions to shipping in the Red Sea have pushed freight costs sharply higher and led to delays for European manufacturers that rely on Asian suppliers for parts. A further escalation of the conflict could reverse the decline in energy costs and stall the anticipated recovery.

The International Monetary Fund now expects the eurozone to grow by 0.9% this year, a downgrade from its previous 1.2% growth estimate, according to the Fund’s quarterly World Economic Outlook report published on Tuesday. By contrast, it sees the U.S. growing by 2.1% against its earlier 1.5% forecast.

Strong U.S. growth and an estimated 4.6% increase in China’s GDP according to the IMF should more than offset Europe’s disappointing performance and translate into a soft landing for the world economy this year. The IMF now sees the world economy growing at 3.1% this year, the same rate as last year and faster than the 2.9% growth projected in October.

“We find that the global economy continues to display remarkable resilience,” Pierre-Olivier Gourinchas, IMF Chief Economist, told reporters, pointing to the speed at which inflation had receded as a positive surprise.

He warned, however, that geopolitical distortions could reignite price increases. Core inflation—which excludes volatile energy and food prices—isn’t quite back to the prepandemic trend, particularly for services sector prices, he said.

IMF economists also cautioned that financial markets have been overly optimistic in anticipating early rate cuts by central banks. They project policy interest rates to remain at current levels for the U.S. Federal Reserve, the European Central Bank, and the Bank of England until the second half of 2024, before gradually declining as inflation moves closer to targets. Some investors and analysts expect a Federal Reserve rate cut in the first half of this year.

Back in Europe, Tuesday’s GDP data showed Germany was the weakest of Europe’s large economies at the end of last year, with output falling in the final quarter. However, revised figures showed it avoided a contraction in the three months through September.

“The economy remains stuck in the twilight zone between recession and stagnation,” said Carsten Brzeski, an economist at ING Bank.

While Italy’s economy expanded slightly, the French economy flatlined for the second straight quarter. Ireland, which had been a major source of growth for the eurozone over the previous decade, saw its GDP fall by 1.9% in 2023 as a pandemic-driven boom in its key pharmaceutical industry ended.

In a rare bright spot, Spain finished the year with another strong quarter and matched the U.S. growth rate over 2023 as a whole, thanks to a surge in international tourism as the last of the Covid-19 restrictions were lifted.

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The Real-Estate Downturn Comes for America’s Premier Office Towers

The highest quality office buildings have had much better success navigating the industry’s turmoil. Now, even premier towers are starting to wobble.

Rents at the highest-end buildings have been falling, while the rate of leasing has been slowing. Tenants have become more sensitive to costs in a world of higher interest rates and lingering concerns about a possible economic slowdown, market participants say.

Owners of the most elite buildings escaped this fate for a while by convincing the market they had created a new class of office tower—one that surpassed the traditional Class A building at the top of the pecking order.

These landlords persuaded blue-chip tenants that reluctant workers would return if only their offices sparkled with lush roof decks, fully loaded gyms and food prepared by Michelin-starred chefs. Owners invested heavily in these properties, which were usually new developments with the best locations, views, air quality and modern designs.

But that strategy is losing steam as more companies have accepted the reality of hybrid work schedules and, for the most part, have given up on compelling workers to be in five days a week.

“The ship has sailed on full return to the office for most companies,” said Rob Sadow, chief executive of Scoop Technologies, a software firm that developed an index that tracks workplace strategies. “They’re not going to go from three days a week to five days a week by making their space nicer.”

That is one reason why few office developers are considering new ground breakings. Current rents don’t pencil out for building expensive space. The U.S. had only 31 million square feet in office construction starts last year, the lowest level since 2010. New buildings will represent only 1% of inventory by 2027, the lowest in at least 25 years, according to CoStar.

“New starts have essentially ground to a halt,” said Dylan Burzinski, analyst at real-estate analytics firm Green Street.

Premium, amenity-rich office space has outperformed in terms of rent and occupancy throughout the pandemic. In New York, SL Green Realty opened a new office tower called One Vanderbilt across the street from Grand Central Terminal in the fall of 2020. It boasted a 4,000-square-foot terrace and cafe and a menu overseen by star chef Daniel Boulud. The 93-story building quickly filled up even though its top asking rents were near record levels at more than $300 a square foot.

That sort of exceptionalism is beginning to wane. Asking rents for prime space in 16 U.S. markets declined in the third quarter after increasing on average from about $61 a square foot in mid-2021 to close to about $70 in the second quarter of last year, according to CBRE Econometric Advisors. They were just under $69 in the fourth quarter, CBRE said.

The share of leasing activity is also falling among the premier towers. The office properties that data firm CoStar Group defines as five-star buildings accounted for 8% of the market in 2022 and 2023, down from 10% in 2019. Meanwhile, new leases in five-star buildings were on average 43% smaller than 2019, CoStar said, reflecting how companies are becoming more efficient in their space use and tolerating some degree of work from home.

In the fourth quarter, 62% of companies offered some form of remote work, up from 51% one year ago, according to Scoop. On average, those companies with hybrid strategies required workers in the office 2.5 days a week in October, Scoop said. In 2021 and 2022, many companies still expected to bring workers back five days a week and were leasing space with that in mind.

Office buildings that have opened recently have done well, but not by One Vanderbilt’s standards. In Boston, for example, Millennium Partners has leased about 60% of the 812,000 square feet of office space that hit the market last year in the new Winthrop Center project with such tenants as Cambridge Associates and consulting giant McKinsey. But rents are about 10% less than what Millennium originally forecast, said Joe Larkin, principal of MP Boston, the developer’s local arm.

Larkin said that Millennium expects to achieve its goal of taking three years to lease the building. “What we lost in the last couple of years is the hope to exceed how we planned this building,” he said.

High interest rates and concerns about a possible recession are also giving companies second thoughts about trading up to higher quality spaces. Moves are expensive especially when borrowing costs are higher than they’ve been in decades.

Cost-conscious companies are noticing that the gap between asking rents in top buildings and lower quality buildings is widening. The result: Renewals were 42% of the leasing volume last year, compared with 31% in 2018 and 2019 combined, according to CBRE.

“If companies aren’t going to have people in the office full time, maybe taking the lower-grade space might be a better economic decision,” Sadow said.

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Costumes and Props From ‘The Crown’ Head to Auction

Fans of The Crown will soon have the opportunity to own a piece of the royal drama as Bonhams is auctioning off a range of items from the Netflix series, which ended its six-season run in December.

More than 300 lots are currently available for online bidding through Feb. 8, and an additional 160 will go under the hammer during a live sale at Bonhams’ London headquarters on Feb. 7.

Since its debut in late 2016, The Crown has captivated viewers around the world with its visually stunning approach and dramatic portrayal of the British royal family’s tales of heartbreak. Throughout the show’s 60 episodes, viewers followed the twists and turns of the royals.

“The iconic costumes, props, and set pieces from The Crown are extensively researched and made with truly impressive attention to detail by master craftspeople,” Charlie Thomas, Bonhams U.K. group director for house sales and private and iconic collections, said in a statement. “Not only is this an incredible opportunity to own pieces from the landmark show, it is also the closest anyone can come to owning the real thing—be it the facade of 10 Downing Street or Princess Diana’s engagement ring.”

Claire Foy (as The Queen): Full-length teal ballgown, featured in the promotional poster (© Netflix 2020, Inc.) and pale gold satin pointed heels. Season 2 Episode 1 and Episode 4. Estimate: £3,000-5,000
Composite: Courtesy of Bonhams / Netflix

Highlights of the auction include recreations of Princess Diana’s iconic items, such as the sapphire engagement ring that actress Emma Corrin debuted as Diana in season 4 (presale estimate: £2,000 (US$2,537) to £3,000); the revenge dress actress Elizabeth Debicki wore as Diana during her split from then-Prince Charles in season 5 (estimate: £8,000 to £12,000); and the leopard swimsuit Debicki sported in season 6 while on vacation during Charles’ 50th birthday party for then-Camilla Parker Bowles (estimate: £800 to £1,000).

Emma Corrin (as Lady Diana Spencer): Engagement announcement, engagement ring. Estimate: £2,000-3,000. (Film still © Netflix 2020, Inc.)
Composite: Courtesy of Bonhams / Netflix

Expected to fetch the highest prices are a pair of life-size replicas from the set: the Gold State Coach, which is estimated to sell for between £30,000 and £50,000, and a facade of 10 Downing Street, the British prime minister’s office and residence (estimate: £20,000 to £30,000).

Described by Bonhams as a “rococo masterpiece,” the actual royal coach was built in 1762 for King George III and has been used at every coronation since 1831, when King William IV succeeded to the throne.

“We wanted to make something special, and Netflix had the money, ambition, and ability to go the whole hog. The Gold State Coach is fabulous,” said Andy Harries, CEO Left Bank Pictures and executive producer of The Crown, in the auction notes.

Gene D’Cruze, the series’ head of construction, said the items for sale are among the most impressive and accurate recreations ever committed to film.

Elizabeth Debicki (as Princess Diana): The ‘Revenge dress’, custom-made off-the-shoulder black cocktail dress. Season 5 Episode 5. Estimate: £8,000-12,000. (Film still © Netflix 2020, Inc.)
Composite: Courtesy of Bonhams / Netflix

“I’ve built every single set on every series—more than 1,000 of them—and employed 140 people. It’s all done old-school. I’ve done 80 TV series, but The Crown is the best—best production, best art department, best locations, best series, best people,” said D’Cruze in the auction notes. “I especially love the 10 Downing Street facade. Most sets only last six months, but this stood for seven years.”

Proceeds from the live auction will go toward establishing a new scholarship for students at the National Film and Television School (NTFS). According to the auction house, the program will support students at the globally renowned school over the next 20 years.

“The Crown’s huge global success has much to do with working with the best creative and production talent in this country and we want to invest the proceeds of this magnificent auction into the next generation of film and TV talent,” said Harries in a statement.

A special exhibition of items from the auction has been on a global tour—having already appeared in New York, Los Angeles, and Paris—and will remain on display at Bonhams London through Feb 5.

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China’s Wobbles Could Throw the Global Economy Off Its Axis

About the author: Desmond Lachman is a senior fellow at the American Enterprise Institute. He was previously a deputy director in the International Monetary Fund’s Policy Development and Review Department and the chief emerging market economic strategist at Salomon Smith Barney.

Today, a Hong Kong court ordered the liquidation of Evergrande, a Chinese company that was one of the world’s largest property developers. After years of fruitless negotiations between the company and its creditors over the restructuring of its $300 billion debt mountain, a Chinese court said that “enough was enough.” In a blow to an already troubled Chinese housing market, it ordered that the company’s assets be liquidated to pay back its creditors.

How mainland China handles Hong Kong’s court order could have major implications for Chinese property prices and foreign investor confidence. If it enforces the court’s order, that could see an acceleration in Chinese home-price declines by adding to supply in an already glutted market. It could also heighten social tensions by disappointing around 1.5 million Chinese households who have put down large deposits for homes that are yet to be completed.

If it ignores the Hong Kong court’s order, it risks dealing a further blow to waning investor confidence. Questions would arise about China’s willingness to abide by the rule of law and to offer a safe economic environment for investors.

The Evergrande liquidation comes at an awkward time for the Chinese economy. It is already in deep trouble and could be headed for a Japanese-style lost economic decade. The news also suggests that China will disappoint the consensus view that the Chinese economy is headed for only a minor economic slowdown this year. This could have major implications for the U.S. and world economic outlook, considering that China is the world’s second-largest economy and until recently was its main engine of economic growth.

Even before Evergrande’s liquidation order, a whole set of indicators suggested that the former Chinese economic growth model was dead. Chinese home prices have been falling for more than a year; both wholesale and consumer prices have been falling; stock prices have plummeted as foreign investors have taken fright; and youth unemployment has risen to around 20%.

There have also been questions about President Xi Jinping’s economic stewardship. First, his disastrous zero-tolerance Covid policy contributed to the country’s slowest economic growth in 30 years. Now his increased economic intervention is undermining the underpinnings of the Chinese economic growth miracle unleashed by Deng Xiaoping’s economic reforms in the 1980s.

Chinese stocks rose last week on news that authorities are taking steps to stimulate the economy. But anyone thinking that the Chinese economy will respond favorably to yet another round of policy stimulus has not been paying attention to the size of that country’s housing and credit market bubble that has now burst. Nor have they been paying attention to the troubling degree to which that country’s economy has become unbalanced.

According to Harvard’s Ken Rogoff, the Chinese property market now accounts for almost 30% of that country’s GDP. That is around 50% more than that in most developed economies. Meanwhile, over the past decade Chinese credit to its non financial private sector expanded by 100% of GDP, according to the Bank for International Settlements. That is a larger rate of credit expansion than that which preceded Japan’s lost economic decade in the 1990s and that which preceded the 2008 bursting of the U.S. subprime and housing market.

The overall Chinese economy is highly unbalanced in the sense that it has become overly reliant on investment demand. The Chinese investment-to-GDP ratio is over 40%, according to the Organization for Economic Cooperation and Development. That’s sharply higher than the more normal 25% ratio in most other developed and mid-sized emerging market economies.

The consensus forecast is that Chinese economic growth this year will continue at a 5% clip. Anyone relying on that forecast should reflect on the many failures by the U.S. Federal Reserve and other central bankers to foresee the grave problems of the subprime housing market in the U.S. in early 2008. It would seem that most economists are downplaying indications of major Chinese economic problems that are plain sight. Chinese economic problems could unleash serious deflationary forces for the U.S. and global economy. The Federal Reserve would be ignoring them at its peril.

Guest commentaries like this one are written by authors outside the Barron’s and MarketWatch newsroom. They reflect the perspective and opinions of the authors.

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Why Introverted Leaders Are Ideal for the Post pandemic Workplace

Leigh Thompson is the J. Jay Gerber Professor of Dispute Resolution and Organizations and a director of executive-education programs at Northwestern University’s Kellogg School of Management. She is the author of several books, including “Negotiating the Sweet Spot: The Art of Leaving Nothing on the Table.”

I’m an extrovert and I admit I’ve benefited from it.

Outgoing people are more likely to be noticed, selected as leaders and awarded “halo” traits—meaning that other people just assume extroverts are more likeable, intelligent and have other positive qualities. But as a social scientist, I can’t ignore the research: Most of these beliefs about extroverts simply aren’t true.

Studies show that introverts and extroverts are equally effective in academic and corporate environments, and that there is no actual relation between CEO charisma and firm performance.

Yet the misconceptions about extroverts persist, making them more likely to be chosen as leaders over their more introverted peers. That’s unfortunate because in our post pandemic world, replete with remote work, hybrid communication, far-flung team members, artificial intelligence and global disruption, introverts are particularly well-equipped to lead.

That may be hard to believe because of two persistent myths.

First is the widely held stereotype that effective leaders are gregarious, alpha and comfortable in the spotlight, even craving that attention. In reality, the social skills that extroverts display aren’t necessarily predictive of capable leadership.

Second is the belief that quieter people lack leadership skills. They are seen as less social, unassertive, sad and disconnected. Indeed, in a recent study in which people in different groups were instructed to “act like an extrovert” or “act like an introvert” regardless of their actual personalities, those who acted extroverted were disproportionately selected for leadership. And, interestingly, those who pretended to be introverted in that study reported feeling sad.

Both of these myths ignore the reality that introversion, far from being simply a lack of extroversion, is a distinct set of traits with its own large merits. This was true well before the pandemic, but the remote-work environment illuminated the bias even more and highlighted the need to change our perceptions.

Here are five reasons why introverts could be ideal leaders in the redefined workplace.

1.Remote-work performance. Extroverts’ job performance declined when the pandemic forced many businesses to go remote. A study of remote workers found that extroverted employees became less productive, less engaged and less satisfied with their jobs. A separate study found that team average extroversion had a large negative effective on team performance—that is, the more extroverted the team members were as a group, the worse they performed.

2. Dealing with adversity and change. Introverts show a greater capacity to engage, think through and make wise choices during periods of adversity and change. A recent investigation found that introverts had more positive attitudes toward AI and using AI overall than did extroverts. A separate study found that during periods of high conflict, extroverts develop fewer energising relationships with their teammates and aren’t viewed as proactively contributing to the team. Introverts, however, often possess a predisposition for things like empathy and thoughtful communication—all critical for navigating team dynamics and conflict in tough times.

3. Creativity. Introverts’ creativity flows well in the quiet aftermath of group interactions, positioning them as formidable leaders for innovative and reflective tasks. In studies of communication and conflict, introverts’ tendency to think before speaking was seen to yield more creative solutions.

4.Avoiding avoidance. Most humans approach positive things and avoid negative things. Sounds like a good policy—unless we’re talking about workplace challenges. Research has shown that extroverts commit more passive avoidance errors—that is, when the going gets tough, they tend to avoid the situation altogether; meanwhile introverts are more likely to inspect the half-empty glass or the disappointing customer-satisfaction data, generating insights and solutions.

5. Resilience against quitting. A study of over 200 people revealed a correlation between extroversion and burnout—that is, the more extroverted a person reported themselves to be, the more likely they were to burn out. Introversion, on the other hand, was uncorrelated with burnout, suggesting better immunity.

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Global Emissions From Electricity Set to Fall Even as Power Demand Climbs, IEA Predicts

Global demand for electricity is set to grow at a faster rate over the next three years, but with record power generation from renewables and nuclear expected to cover the surge, emissions will likely go into structural decline, according to the International Energy Agency.

Electricity demand is on track to rise by an average of 3.4% a year through 2026, driven by robust growth in emerging economies, AI, cryptocurrencies and data centres, according to the Paris-based organization’s latest report. However, global carbon-dioxide emissions from power generation are expected to fall, as low-emission energy sources—wind, solar, hydro and nuclear, among others—are likely to account for almost half of the world’s electricity generation by 2026, up from just under 40% last year.

“It’s encouraging that the rapid growth of renewables and a steady expansion of nuclear power are together on course to match all the increase in global electricity demand over the next three years,” IEA’s executive director Fatih Birol said on Wednesday.

“This is largely thanks to the huge momentum behind renewables, with ever cheaper solar leading the way, and support from the important comeback of nuclear power, whose generation is set to reach a historic high by 2025.”

In 2023, global CO emissions from electricity generation increased by 1%, but the IEA predicts a fall of more than 2% this year and smaller decreases in the next two years. Generation from cleaner energy sources is expected to rise at twice the annual growth rate seen between 2018 and 2023, while coal-fired generation is forecast to fall by an average of 1.7% annually through 2026, the IEA said.

Rapid growth of renewables will be supported by nuclear power. According to the report, nuclear generation is set to rise by roughly 3% a year on average to the end of 2026, despite a number of countries phasing out nuclear power or closing plants early.

France and Japan will restart several plants while new reactors begin operating in Europe, China, India and Korea. Asia will likely remain the main driver of growth, reaching a 30% share of global nuclear generation in 2026, the IEA said.

For years, nuclear power has been at the centre of the clean-energy debate. Proponents including France argue that it is a reliable, low-carbon alternative to fossil fuels, while opponents such as Germany say costs and risks from reactor accidents and waste are too high.

At the United Nations’ COP28 climate summit last year, the U.S. and 21 other nations pledged to triple nuclear power capacity by the middle of the century.

Most of the increase in electricity demand forecast by the IEA is set to come from emerging markets. China is expected to be the largest contributor to growth—with consumption boosted by the production of solar PV modules, electric vehicles and the processing of raw materials—while India is forecast to grow the fastest among major economies.

Rapid expansion of artificial intelligence, data centres and cryptocurrencies will also be a driver of growth, according to the agency, which predicts their power demand could double to roughly the equivalent of electricity consumption in Japan.

Last year, electricity demand growth slowed to 2.2% from 2.4% in 2022, as advanced economies suffered the impact of high inflation and lower industrial output, the IEA said.

Demand in the U.S. decreased by 1.6% after rising 2.6% in 2022, mainly because milder weather reduced the use of heaters and coolers, but demand is expected to recover this year to 2026. European Union power demand declined for the second consecutive year in 2023—despite a fall in energy prices—and isn’t expected to return to high levels until 2026 at the earliest, the IEA said.

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Well Into Adulthood and Still Getting Money From Their Parents

Parents have always supported their children into adulthood, from funding weddings to buying a home. Now the financial umbilical cord extends much later into adulthood.

About 59% of parents said they helped their young adult children financially in the past year, according to a report released Thursday by the Pew Research Center that focused on adults under age 35. (This question hadn’t been asked in prior surveys.) More young adults are also living with their parents. Among adults under age 25, 57% live with their parents, up from 53% in 1993.

Parental support is continuing later in life because younger people now take longer to reach many adult milestones—and getting there is more expensive than it has been for past generations, economists and researchers said. There is also a larger wealth gap between older Americans and younger ones, giving some parents more means and reason to help. In short, adulthood no longer means moving off the parental payroll.

“That transition has gotten later and later, for a lot of different reasons. Now it’s age 25, 30, 35, 40,” said Sarah Behr, founder of Simplify Financial Planning in San Francisco.

Kami Loukipoudis, a 39-year-old director of design, and husband Adam Stojanik, a 39-year-old high-school teacher, knew they would need parental assistance to buy in New York’s expensive home market.

“We could pay a mortgage, but that down payment was the absolute crusher,” Stojanik said. “The idea of trying to save up on our own—as long as we were paying rents in NY, would’ve taken 300 years.”

Loukipoudis’s mother gave them the money for a 10% down payment on a two-bedroom apartment in the New York borough of Queens.

The young-adult allowance

Adult children aren’t necessarily getting larger checks from their parents, but they are staying on the parental payroll for longer than previous generations, according to Marla Ripoll, professor of economics at the University of Pittsburgh who studied the trend by analysing payments from parents to adult children over a 20-year span.

Ripoll found that 14% of adult children receive a transfer of money from their parents at least once in any given year, and roughly half get financial help at some point within that period. Those rates have been stable for years. What has changed is that the transfers now continue for much longer, she found. This longer-term help might be a drag on social mobility, as it becomes even harder for young people from lower-income families to catch up, researchers said.

Of the young adult children who said they received financial help from a parent in the past year, most said they put it toward day-to-day household expenses, such as phone bills and subscriptions to streaming services like Netflix, according to the Pew survey.

The amount of money and the frequency of help varies by age; those on the older end of the 18-to-34 cohort are far likelier to say they are completely financially independent from their parents compared with younger adult children, as many in the latter group are completing their education. Nearly a third of young adult children between the ages of 30 and 34 say they still get parental help.

Heather McAfee, a 33-year-old physical therapist in Austin, Texas, said she lived at home between 2019 and 2021; otherwise she wouldn’t have been able to make progress paying down her student loans while rent prices in her area remained so high. The plan worked—she has since reduced her student-debt balance from $83,000 to $15,000.

“It helped tremendously,” she said. “I didn’t have to take out more loans to pay for apartment living or anything like that. That stress was gone.”

Setting limits on financial help

A little more than half of parents surveyed said that having their adult children home brought them closer together or improved their relationship, but nearly 20% said it dented their personal finances.

Financial advisers often find themselves in the tricky position of speaking to both ends of the equation: adult children who need assistance and the parents determined to help children well into middle age, within limits.

Whereas previous generations would step into a greater sense of financial independence in their early 20s, young adult children today are often unable to reach similar markers of such independence—living on their own or buying their first home, for example—without greater financial resources.

Families typically don’t set concrete rules around when financial help will happen and what the money is used for, which can result in surprises down the road, Behr said.

In one case, Behr’s clients received the down payment they needed to purchase a condo from a generous mother-in-law. Years later, that same mother-in-law told them she expected a payout once the couple sold the home.

The hand-me-down payment

Down-payment help from parents—a given for many first-time home buyers—is growing thanks to higher home prices and elevated mortgage rates.

About a fifth of first-time home buyers said they got help from a relative or friend when pulling together the money needed for a down payment, according to a 2023 survey of home buyers and sellers from the National Association of Realtors. And 38% of home buyers under age 30 received help with the down payment from their parents, according to a survey this spring by Redfin.

Wealthy families often go further than helping with the down payment. They become a true bank of mom and dad and write a mortgage. The Internal Revenue Service sets minimum levels of interest for such loans, which remain significantly cheaper than current mortgage rates.

Timothy Burke, chief executive at National Family Mortgage, which facilitates such loans, said parents are often frustrated on behalf of their house-hunting children. High interest rates and the cutthroat housing market are holding their children back from reaching a milestone the parents themselves were more easily able to access.

Mei Chao, a 41-year-old stay-at-home mom, and her husband, William Chao, a 44-year-old information-technology specialist, bought their first house as a couple in 2017. They relied on financial help from her husband’s two sisters and his mother to help them bridge a gap in their house-buying timeline. While they waited to sell William’s Manhattan condo, they used the money from the family to purchase the new house in Queens.

The structure of the agreements got tricky. After selling the condo in Manhattan, Mei and her husband were able to repay his sisters in full. But they didn’t have enough money left over from the sale to do the same for Mei’s mother-in-law. So they kept the mother-in-law’s name on the deed to the house—a concession Mei said they were both more than happy to make.

“Ultimately, it all worked out. I’m glad his mother pushed us,” Mei said. “Without her help, I could not say we would have this home.”

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A New U.K. Race Car Boasts Zero to 60 in 1.4 Seconds. And You Can Buy One in the U.S. Next Year.

The fastest cars you can buy are all electric. Cars with zero-to-60 times under two seconds are the Rimac Nevera and its close relative the Pininfarina Battista, the Tesla Model S Plaid Edition, and the Lucid Air Sapphire.

Now, add one more: the British-made McMurtry Spéirling. At a Silverstone track event in December, Mat Watson of the YouTube channel Carwows drove the electric, rear-wheel drive Spéirling PURE model to 60 miles an hour in 1.4 seconds, with zero to 100 in 2.63 and a quarter mile in 7.97. The PURE is a racer in an edition of 100, but McMurtry said it will eventually be producing a street-legal version.

The price in the U.K. for the handmade PURE is £895,000, and in the U.S. around US$1 million. McMurtry Automotive was founded in 2016 and based in England’s posh Cotswolds region of Gloucestershire. Managing Director Thomas Yates comes from Formula 1, and the company’s focus is on race-bred technology. Testing, in secret, occurred in the U.K. at tracks such as Castle Combe and Donington Park. The first reveal to the public was at the Goodwood Festival of Speed in 2021, with racers Derek Bell and Alex Summers giving demonstration runs. The next year, the PURE set a hill climb record at Goodwood (going up in 39.08 seconds).

Miller Motorcars of Greenwich, Connecticut, which also handles Ferrari, Bugatti, Maserati, Rolls-Royce, and other luxury brands, announced it was taking on McMurtry in January. The record-breaking car was shown by its battery supplier at CES in Las Vegas earlier this month, but will also be making an appearance in Greenwich, with an open house Feb. 3. The West Coast dealer is O’Gara Motorsport, and the star car was in California at Thermal Raceway earlier this month for a demonstration.

The record-setting McMurtry Spéirling PURE on display at CES this year.
Jim Motavalli

Evan Cygler, director of special projects at Miller, tells Penta he was “completely dumbfounded” to encounter the rear-wheel drive McMurtry PURE in England. “They purposely came out with a finished car at Goodwood to break a record, and achieved the goal,” Cygler says. “The sound of it is incredible, as is the tiny size. We are passionate about our business, so we told them that if there was an opportunity to sell these cars, we’d love to be involved.”

Miller will support these track-only cars with its own track days at Connecticut’s Lime Rock Park, Cygler says. “It is less than two hours away and a fun place to host our customers for a day,” he says. “The Spéirling PURE is a cool weekend racer, and definitely something different. Whether you are into EV products or not, you have to love this.” Miller expects to get one or two PURE cars in 2025, he added. McMurtry will also host customers at private track events in the U.K.

The Spéirling reportedly offers 1,000 horsepower and 1,033 pound-feet of torque from two electric motors. Keeping it on the track are a pair of huge turbines (adapted from Formula 1 and Can Am) located behind the single occupant that extract air from under the car and produce more than 4,000 pounds of downforce. The battery is relatively small at 60 kilowatt-hours, but the carbon fiber-bodied car is so light at approximately 2,200 pounds that it has an estimated 300 miles of range (driven lightly, and on the forgiving European WLTP cycle). Top speed is around 200 mph.

The battery pack in the PURE prototype uses Molicel cells that can fast charge in 20 minutes, with rapid cell cooling. A charge can get the car around Silverstone track for 10 laps. Customer cars will use next-generation cells that are still in development.

The cockpit of the Spéirling PURE is a tight fit, and entry is made easier by a removable steering wheel. The single occupant sits on the rear fender and swings his or her body through the narrow opening, then drops into place. It’s a racer’s view forward, with no infotainment or anything else extraneous to ultra-high-speed driving. The Spéirling PURE may not be useful for getting groceries, but it offers the ultimate acceleration experience.