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Homework Assignment

Wednesday, September 8, 2010

Telework would help address some of the biggest problems currently plaguing the United States, including budget crises, environmental pollutants, and costly energy use.

One policy would single-handedly help address some of the biggest problems currently plaguing the United States, including budget crises, environmental pollutants, and costly energy use. It is not new or advanced, but a practice that has been around for a while: telework.

The government has begun to use teleworking, sometimes known as telecommuting or working from home, but expanding that effort would yield significant benefits. Moreover, government policies at the state level create an obstacle to this practice in the private sector, and require reform.

The average teleworker could reduce pollutants by 15,100 pounds per year, and save over 3 tons of carbon dioxide emissions per year.

Telework’s environmental benefits are significant. Teleworkers reduce oil consumption and pollutant emissions because they don’t need to commute on a regular basis. In a recent paper, “Should the Government Expand Telework?” Kenneth P. Green shows that the average teleworker could reduce pollutants by 15,100 pounds per year, and save over 3 tons of carbon dioxide emissions per year (roughly equivalent to two months of U.S. per capita emissions). Currently, the 3.9 million U.S. teleworkers save 10 to 14 million megatons of carbon dioxide from being emitted annually. Those same 3.9 million teleworkers saved between 130,000 and 190,000 terajoules of energy annually—equivalent to more than the amount of oil Americans consume in a day. Additionally, employers add to these savings by downsizing office buildings and using less electricity. IBM, for example, reduced its energy use by 17.2 kWh between 1990 and 2005 through its telework program.

These environmental benefits translate into money savings as well: IBM saved $22.9 million from reduced electricity use and $2.9 billion by reducing office space. Teleworkers save money by spending less on gas, while employers save money on building electricity bills. The typical teleworker saves $1,000–$2,000 in fuel costs annually.

Cutting out the commute makes teleworkers less likely to get in traffic accidents and allows organizations to operate through inclement weather.

Telework also increases employee safety by dispersing the workforce and reducing time on the road. The dispersed work force decreases the organization’s susceptibility to flu outbreaks and disease epidemics. Cutting out the commute makes teleworkers less likely to get in traffic accidents and allows organizations to operate through inclement weather.

Telework has become an important aspect of the federal government’s security preparedness plans. Telework allowed Congress to continue operations after anthrax was discovered in the Hart Senate Office Building in 2001. Legislation in previous congressional sessions has even required that telework be added to federal agencies’ continuity of operations plans (although such bills have not yet passed).

Moreover, telework opens doors for people who may otherwise have difficulty working. Parents can better balance family life and work, and parents who cannot afford child care can work and stay at home. People with disabilities can work from home with greater ease. And, perhaps most importantly, geographic barriers become obsolete. People can work for organizations across the nation, and employers can select the best candidates for jobs. By erasing geographic barriers, easing the difficulties for those with disabilities, and giving feasible solutions to families, telework makes it easier for many marginal workers to find productive employment.

By erasing geographic barriers, easing the difficulties for those with disabilities, and giving feasible solutions to families, telework makes it easier for many marginal workers to find productive employment.

Despite the overwhelming benefits of telework, barriers have made implementation slow. There are institutional barriers, such as the desire to have employees present and supervised. While some express concerns about teleworkers’ productivity, studies have shown that teleworkers are at least as productive, and sometimes even more productive, than non-teleworkers. A report by the Office of Personnel Management states that teleworkers are at least as productive and have less stress, and a study by the Telework Research Network found a 27 percent increase in productivity on telework days. In the past, teleworking faced technological barriers, but with readily available high-speed Internet, video chat, and smart phones, technology facilitates rather than hinders.

Possibly the biggest barrier to telework are state tax laws. Many states implement some form of double taxation on out-of-state teleworkers. For example, New York applies a “convenience of the employer” doctrine on out-of-state teleworkers who work for a New York–based organization, which requires them to pay income tax to New York for telework days outside of the state. All work done outside of New York is subject to New York income tax, unless the work is done outside of New York out of necessity to the employer . In 2005, the New York State Court of Appeals upheld the “convenience of the employer” doctrine in Huckaby vs. New York State Division of Tax Appeals. Thomas Huckaby, a Tennessee resident, worked for a New York–based company, but teleworked 75 percent of the time. On his New York State nonresident tax returns, Huckaby allocated 25 percent of his income to New York, and 75 percent to Tennessee; however, the New York State tax department determined that Huckaby should have paid New York income tax on 100 percent of his income. The court sided with the New York State tax department, stating that the doctrine was constitutionally applied. As many as 35 states have some form of double taxation for teleworkers.

Telework can address environmental problems, save money, and help both employees and employers. Perhaps it’s time for policymakers to give it greater consideration.

Hiwa Alaghebandian is a research assistant at the American Enterprise Institute.

FURTHER READING: Alaghebandian earlier wrote, with Kenneth Green, “Science Turns Authoritarian.” Scott Shane explores “Why Small Businesses Aren’t Hiring,” while Dane Stangler and Robert Litan discuss “Hard Times, Bright Futures” for the self-employed. Aparna Mathur reviews “Health Insurance and Job Creation by the Self-Employed,” and Green further discusses “Thinking about Energy” and energy reduction.

Image by Darren Wamboldt/Bergman Group.

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