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Telecommuting: A refuge from traffic and social engineers

Planners need to remove obstacles to telecommuting

Shikha Dalmia
November 10, 2005

The solution to society's most pressing problems often comes not from social engineers but the spontaneous actions of individuals. If government planners would absorb this insight, they might stop squandering taxpayer dollars on mass transit schemes to combat road congestion.

They would concentrate, instead, on tearing down the obstacles to telecommuting or working from home.

A new Reason study by Ted Balaker notes that this commute mode has quietly picked up steam in recent decades and might present the most — and perhaps the only — effective alternative to solo driving.

A month ago, when the nation was still under sticker-shock from Katrina-related expenditures, Senator Debbie Stabenow, a Michigan Democrat, proudly touted before her constituents $100 million in federal pork she had procured to study a 30-mile light rail line linking downtown Detroit and Ann Arbor, home to Michigan's Berkley — University of Michigan. The total price tag for the rail line if it goes forward? Over $8 billion.

A rail line of this scale in the Motor City would be anachronistic at any time. But it is especially so when Detroit, like other core cities, has lost more than half of its population and industry to the suburbs. Indeed, the major traffic flows are no longer between Detroit and the suburbs but within the suburbs — a reality that the proposed rail-link blithely ignores.

L. Brooks Patterson, executive of the neighboring Oakland County, openly scoffed at the futility of the exercise. "They don't need to spend $100 million to realize that this is just ridiculous," he mocked. "I'll form a company and tell them that for $20 million."

But Stabenow is not alone in throwing road dollars where they don't belong. As Balaker's study points out, from 1980 to 2000, government has cumulatively increased mass transit subsidies by 133 percent and expanded car pool lanes — or high occupancy vehicle miles capacity — by 868 percent.

Yet mass transit commuters have dropped by 2 percent and carpooling's commute share has dropped by 38 percent. (In Detroit carpooling's commute share has declined by 45 percent, suggesting that the city is not a good candidate for even bigger mass transit schemes like the ones that Stabenow is suggesting). By contrast, the number of people driving solo to work has increased by nearly 20 percent.

Indeed, the only commute mode that is growing at the same pace as driving — if not faster — is one that has received no government prompting: telecommuting.

According to Census Bureau, from 1999 to 2000, the number of people telecommuting from home grew by 23 percent, more than twice the rate of growth of the labor market — so that now there are more than 4.2 million telecommuters in the country.

Nor are we talking just about home-based businesses or live-in nurses and nannies — but accountants, high-tech workers and others who, in the pre-computer and high-speed-internet days, would have driven to work.

In fact, Balaker's research revealed, telecommuters are a growing breed in every major metropolitan area for which data in available. This is the case not just in metros that lack a viable mass transit alternative such as Tampa, Oklahoma City and Nashville — but even in ones that have extensive transit systems such as Chicago, San Francisco, and Washington D.C. What's more, in 27 of the 50 most populous metro areas, telecommuters now outnumber mass transit commuters, sometimes by a wide margin.

The appeal of telecommuting is obvious: It saves commute time (up to 15 work days per year in larger cities) and money (about $1,200 per year in gas costs alone in Southern California) and allows for a better balance between home and work. Moreover, telecommuting is the only option that offers even more geographical flexibility than driving: Full time telecommuters can live and work in completely different cities.

Ironically, even as the federal government has been trying to yank people out of cars and into mass transit, it has been encouraging its own workers to telecommute. A telework program initiated a few years ago has doubled the number of federal employees enrolled in it.

To be sure, not all occupations lend themselves to telecommuting, and it is unclear at this stage exactly how widespread telecommuting will become in the future.

Still, what is certain is that the knowledge economy is expanding and along with it the number of people with jobs that can be done remotely.

Unfortunately, instead of encouraging these people to opt for telecommuting, the Supreme Court this week took the opposite tack when it declined to hear a challenge to New York's policy of taxing telecommuters employed by companies in the Empire State but living elsewhere, something that forces them to pay income taxes in two states.

Congress, however, can end such double taxation — one of the biggest disincentives to telecommuting — by passing the Dodd-Shays Telecommuter Fairness Tax.

Telecommuting is by no means a panacea that will magically solve congestion, pollution and other ills. But what makes it more promising than mass transit schemes is that people are embracing it voluntarily without any public expenditure.

The moral for policy makers of the quiet telecommunication revolution that Balaker's study documents is this: They would have far better success in achieving their objectives — whether it is relieving congestion or something else — if they took their cues from the real choices of real people. Top-down schemes such as mass transit that require people to fundamentally rearrange their lives to fulfill some bureaucratic goal are bound to fail — no matter how much taxpayer money is pumped into them.

Shikha Dalmia is a senior policy analyst at Reason Foundation.


Shikha Dalmia is Senior Analyst


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