It has never been more popular to work from home.
It used to be nothing more than a nice job perk — like free coffee or being allowed to bring your dog to the office. But the state government has now identified telecommuting as a policy tool with potential to ease our record-high levels of congestion.
As part of a broader $18 billion transportation investment bill unveiled last week, Governor Charlie Baker is proposing a new tax credit to encourage companies to let employees work from home. Fewer cars on the road during the work week equals less traffic for everybody. What’s not to like?
Unfortunately, the value is not quite that straightforward. Baker’s telework subsidy is worth pursuing — but only if it’s part of a broader plan to tackle congestion that includes stronger investments in bus and rail transit, and more targeted traffic-reduction policies such as congestion pricing.
First, the details. Baker is proposing a $2,000 tax break, which would go to the employer, per each worker who begins telecommuting on or after Jan. 1, 2020. In other words, companies that have employees working from home right now wouldn’t be able to claim the tax credit — these have to be new telecommuters. The total subsidies would be capped at $50 million a year.
Nationally, telecommuting is on the rise. According to a Globe story last week, roughly half the US labor force works from home at least once a month, and the number of non-self-employed workers who telecommute at least half the time increased 159 percent between 2005 and 2017. In Massachusetts, only 4.7 percent of the workforce telecommutes full time, lower than in 19 other states.
Moreover, according to Baker’s remarks when he introduced the proposal, “Nearly 70 percent of Massachusetts’ workers report driving to work alone in a vehicle.” Lest we forget, Boston had the worst rush-hour traffic last year, according to one report. On average, Boston drivers lost 164 hours in peak traffic periods.
So what’s the harm of enacting a policy that has the potential to encourage less driving? It has to do with who the tax subsidy benefits most , and whether it is focused and cost-effective.
Most beneficiaries of the program will likely be white-collar workers, argued Chris Dempsey, director of the advocacy group Transportation for Massachusetts. Workers in managerial positions are more likely to have the ability and flexibility to work from home, as opposed to restaurant or construction workers. (Of course, the argument goes, blue-collar workers will benefit indirectly by encountering less clogged roads.)
Dempsey also points out that the telecommuting subsidy, unlike state spending on mass transit, won’t benefit from scale — it’ll always cost $2,000 per telecommuter per year. “Transit is different. The state’s contribution is flat, not per-rider, so as ridership grows the state contribution per trip actually goes down. That’s why state policies that increase transit usage — like dedicated bus lanes and congestion pricing — are such great public policies.”
It’s also a potentially scattershot approach: As written, the bill would not necessarily ensure that the workers who start telecommuting were previously driving on heavily congested roads or during peak hours.
Of course, the politics of transportation reform cannot be ignored. Baker seems to be contradicting himself with the telework proposal. Last year, he vetoed a widely supported pilot program to test congestion pricing, or smarter tolling, on the grounds that it needed to be studied first. And yet, the benefits of a telework tax credit on traffic have gone largely unproven. Congestion pricing is far more targeted, and only applies to drivers on the roads and at the times where traffic is worst.
This is not to downplay telecommuting’s potential impact on traffic. It’s a concept that resonates with people because of its simplicity. But that’s exactly why flexible work arrangements should be deployed as modest, narrow measures to see a dent in congestion. (For instance, officials in Tokyo are implementing a “work from home” two-week program to manage the massive crowds that will burden the city’s subway system during the 2020 Olympics next summer.)
As one tool among many, a targeted state policy to encourage teleworking makes sense. Alone, it’s inequitable and won’t help address the needs of thousands of the state’s commuters.