Facilitating (Tele)Working—Does It Really Help Americans and America? (Part I)

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Should recruiters and HR managers be encouraging both employers and prospective employees to switch to or increase teleworking (telecommuting, working from home)—for patriotic as well as professional and personal reasons?

Consider that to be two questions: The first is the micro-economic, professional and personal-level question of whether or not teleworking will be in the clear private interests of the party or parties being pitched and pitching the idea as part of the deal. Ideally, it should be.

The second is the broader big-picture macro-economic question of whether or not teleworking will be good for the economy and the nation as a whole, e.g., through macroeconomic efficiencies, cost reductions, environmental impacts and national security gains.

No matter how this question is answered, it needs to be asked.

When Debtor Giants Save

This second question came to mind as I reviewed the evidence and argument (discussed in detail in Part II) that, if the 40% of the U.S. population who could telework, but currently are not doing so, did work from home at least part-time, the U.S. would save $650 billion per year (according to teleworkresearchnetwork.com ).  That could, on the face of it, help the nation enormously, since, presumably, saving is a “good thing”.

(In fact, however, it can be argued that what matters as much as how much is saved are the opportunity costs associated with that saving—as pure saving or as the alternative uses to which those savings are put, such as investment in badly needed infrastructure or retirement savings.)

That brought to mind a very simple-minded image of a giant having an extra $650 billion in his pocket each year that could then be used to pay down a much bigger debt burden he has.  Could such a giant’s savings be passed on to the giant’s government, for the purpose of paying off that debt and in the form of tax payments on that “windfall” gain, without decreasing anyone’s net disposable income after taxes?

(Alas, the image of the savings-blessed giant paying off gigantic debt is not only simplistic, but, in the absence of very close economic, environmental and geopolitical analysis also rather simple-minded, at least because such “savings” can, like saving in general, have adverse impacts on domestic businesses, investment, consumption and employment. Saving money by cutting expenditures on what otherwise would have been imports is one thing; spending less on “made in the U.S.A” goods and services is quite another and perhaps less helpful prospect.)

Is Pitching Teleworking a Micro/Macroeconomic “Win-Win” Move?

As I argued in “The Real Reason Why We Need Recruiters”, one of the key functions of a recruiter is to do whatever can be done to create a win-win situation for all players—the candidate, the employer and the recruiter. The two questions posed above boil down to whether or not ramped-up teleworking would be to the advantage of all concerned—employees, employers, recruiters, the rest of the population, the economy, the government and the nation (bearing in mind that the latter two are not the same). A recruiter’s dream come true.

If (promoting) working at home instead of at an office were to mean helping accelerate Americans’ pay-down of the staggering U.S. national debt, wouldn’t you (encourage others to) switch to teleworking—from, as a minimum, patriotic motives?

The Micro-Tax Savings of (Not) Commuting

Would you favor voluntary teleworking, if in addition to any and all of its work-life balance and (patriotic) budget balancing benefits, teleworking also got you, your client company and/or employees more tax exemptions, deductions and other benefits than commuting now does?

A policy that offers a tax break for not commuting would represent a partial reversal of current tax-policy thinking that encourages commuting. Instead of providing more tax exemptions, deductions, write-offs or other incentives and compensation to those who must or choose to commute (the latter being those who could telework instead), additional breaks could be offered to non-commuters, i.e., to teleworkers.

Current 2012 U.S. Internal Revenue Service policies do indeed reward and compensate commuters. For example, as of January 1, 2012, employers are authorized to provide workers with up to $125 per month in tax-free transit and vanpool benefits, although this is down from $230 per month in 2011.  (But, could this decrease be a harbinger of or inspiration for a policy reversal and a push for teleworking, rather than continuation of a pro-commuter tax program at current or higher levels?).

In total, commuting employees can receive both the transit and parking benefits of up to $365 per month. Employers can allow employees to use pretax dollars to pay for transit passes, vanpool fares and parking but not for bicycle benefits. (Source: National Center for Transit Research)

Tax Breaks for the Contributions of Voluntary Teleworkers?

Tax incentives and other compensation for commuters are generally deserved—especially for those who must commute, those who have no practical alternative, e.g., because the company disallows teleworking.

But what about those who really do have a choice, even if only for part of their work week?  That is to say, what if they are among those neither forced to commute nor required to work away from home?

Can it not be argued that, by working from home, they would, with the right policies

  1. have a net personal tax-incentive to telework instead of commute (assuming that the tax benefits of teleworking would be greater than those of commuting, i.e., greater than the current $365 benefits package for commuting employees)?
  2. conceivably somehow contribute to pay-down of the U.S. national debt in a way that is much more pleasant than paying higher taxes on current after-tax disposable net income, fighting commuter traffic jams and waiting at train stations?
  3. promote environmental protection (through conservation of key resources) and divert greater disposable income to more constructive personal and governmental spending (rather than to extortionate parking fees and ugly parking-lot infrastructure, for example)?
  4. promote world peace and national security, by (even marginally) reducing international friction in the form of scrambling for oil and other commuter-required resources, and thereby reduce the overall risk of resource-motivated wars?
  5. fight obesity, diabetes, cardiovascular disease and cancer (since recent Washington University School of Medicine research reported by U.S.A. Today shows strong correlations between long-distance commuting and all of these health problems)? After all, the health of a nation, like its wealth, is ultimately measured by the health of its people.

Given these telework gains, in pitching a job, you may want to take a long and close look at both the micro and macroeconomic ramifications of voluntary teleworking, before deciding whether or not to pitch the idea.

Yes, it sounds like getting up to speed could entail a lot of extra work, on top of the multitude of things to do in the office. No problem, though.

Just finish it at home.




Image: SAVING (FOR) AMERICA | Michael Moffa


Next: In Part II, two key questions are posed:

  • At the personal, microeconomic level, which offers better tax breaks—commuting or teleworking?
  • At the macroeconomic level, would the more than $650 billion annual savings expected through expanded teleworking actually help America?

By Michael Moffa