One of the seldom discussed advantages of owning a home compared to renting an apartment is the do-it-yourself opportunities it allows. Homeowners can pick a few, or many, of the maintenance and repair chores to do themselves. Where renters pay rent it must cover the full cost of commercial maintenance and repair; homeowners can provide untaxed labor that reduces their need for cash flow and income.
I am unaware that Congress or the state legislatures consider the do-it-yourself effects of their policies and taxes. Mostly they do the opposite because the U.S. economy depends on the volume of spending. To keep the economy going our governments would rather pressure us to work like demons and spend like maniacs.
Back in the great depression farmers produced a cash crop for market, but cash earnings were only part of their income. Fruits, vegetables, maple sugar and a high percentage of everything put on the family's table could be produced on the farm. Do-it-yourself production does not require a transaction but it means consumption and supports a family's standard of living in the same way dollar income producing on the job supports consumption.
In today’s economy we can drop our magazine subscriptions, our cable TV and the health club, but notice the recent “Cash for Clunkers” and tax breaks for first time home buyers provide help for spending and spenders, but not for those out of work and looking for ways to save. Policies of aid give aid to those with cash to pump up spending.
For the unemployed homeowner, or those with periods of unemployment, the pressure to pay property taxes continues without relief. America’s property tax system pressures people to keep their property in use or sell it to someone who will. If the United States was a country without property taxes, it would give those who owned homes a better opportunity to withdraw from the market place and turn more to do-it-yourself work.
America primarily uses a combination of income taxes, property taxes and sales, use and consumption taxes that demands a relentless tide of cash. As long as our politicians want us to spend our way out of recessions that is not likely to change.
A tax system that reduces income, payroll and property taxes in exchange for more emphasis on sales and consumption taxes would increase cash flow from wages and permit people to keep more of their interest earnings from saving. Higher consumption taxes on goods and services raise more revenue from those with the income and preference to spend, but lets others choose more do-it-yourself opportunities.
Recently I was speaking with someone who grew up on a farm in the 1930’s. He told me his father was required to grade and maintain the county road that went along their property as were all the farmers in the district. Well of course, it makes sense with farmers short of cash but time and equipment to exchange for taxes. It sure beats eviction.
Americans have millions of people short of cash like the hard pressed farmers of the 1930’s. America can give them better choices than the have now.
Saturday, February 13, 2010
Tuesday, February 2, 2010
Public Debt and Private Debt
The United States Treasury will lose borrowing authority when the national debt reaches the legislated ceiling passed by Congress. Treasury Secretary Geithner will have to ask for an increase, which the Congress will grant, but he is bracing for the usual politics. Many in Congress use the opportunity to make government debt their number one worry in order to attach conditions eliminating programs they don’t support.
It is common for them to make comparisons between Government debt and personal debt. “My constituents pay their debts and keep their house in order and it’s time for the government to do the same.” That one is a favorite, but most of the announcements from members of Congress play on constituent anxiety and bias about their personal debts.
When people think of their private debts they worry they won’t be able to pay, but that is not the problem with public debt. The public debt must be managed as part of every administration’s duty to manage the economy. Federal Reserve Bank monetary and interest rate policy gets lots of attention, but without mention that it is also debt management.
When the Federal Reserve wants to lower interest rates to expand the economy, it begins buying outstanding Federal Bills, Notes and Bonds. Payments are by check and when the checks are deposited into bank accounts or converted to cash they become part of America’s money supply.
Buying Federal Bills, Notes and Bonds converts outstanding Federal debt to money and the government and Federal Reserve Bank can do that at anytime and in any amount.
Because the government and Federal Reserve Bank have money in any amount officials could retire the entire federal debt at anytime. They don’t do that because the increase in the money supply would generate inflation and retiring the debt is not a goal of economic policy.
The Federal Government also owns assets and has taxing authority and Federal officials could double or triple taxes and begin selling off its land and other assets to pay off the federal debt. They don’t do that either because it would depress the economy and cause deflation and retiring the debt is not a goal of economic policy.
The British government has done some of its borrowing using a bond called the British Consol, which has no maturity, but is sold in perpetuity. The owner gets periodic interest and can sell their Consol to someone else, but the government has no obligation to pay the principal, ever.
America does not have any equivalent to the British Consol. That’s because Americans think of debt as a symbol of excess that should be retired and they want a date when that will occur. They regard public debt as the equivalent of private debt.
Truth is America’s debt will never be retired, but will go up and down as meets the needs of economic policy. The politicians know this and they will raise the debt ceiling, but in the meantime we will have to listen to their excess.
It is common for them to make comparisons between Government debt and personal debt. “My constituents pay their debts and keep their house in order and it’s time for the government to do the same.” That one is a favorite, but most of the announcements from members of Congress play on constituent anxiety and bias about their personal debts.
When people think of their private debts they worry they won’t be able to pay, but that is not the problem with public debt. The public debt must be managed as part of every administration’s duty to manage the economy. Federal Reserve Bank monetary and interest rate policy gets lots of attention, but without mention that it is also debt management.
When the Federal Reserve wants to lower interest rates to expand the economy, it begins buying outstanding Federal Bills, Notes and Bonds. Payments are by check and when the checks are deposited into bank accounts or converted to cash they become part of America’s money supply.
Buying Federal Bills, Notes and Bonds converts outstanding Federal debt to money and the government and Federal Reserve Bank can do that at anytime and in any amount.
Because the government and Federal Reserve Bank have money in any amount officials could retire the entire federal debt at anytime. They don’t do that because the increase in the money supply would generate inflation and retiring the debt is not a goal of economic policy.
The Federal Government also owns assets and has taxing authority and Federal officials could double or triple taxes and begin selling off its land and other assets to pay off the federal debt. They don’t do that either because it would depress the economy and cause deflation and retiring the debt is not a goal of economic policy.
The British government has done some of its borrowing using a bond called the British Consol, which has no maturity, but is sold in perpetuity. The owner gets periodic interest and can sell their Consol to someone else, but the government has no obligation to pay the principal, ever.
America does not have any equivalent to the British Consol. That’s because Americans think of debt as a symbol of excess that should be retired and they want a date when that will occur. They regard public debt as the equivalent of private debt.
Truth is America’s debt will never be retired, but will go up and down as meets the needs of economic policy. The politicians know this and they will raise the debt ceiling, but in the meantime we will have to listen to their excess.
Saturday, January 16, 2010
Transportation and Free Enterprise
Shortly after taking office President Obama announced plans for government spending that calls for “billions of dollars to rebuild roads and bridges, modernize public schools, and construct wind farms and other alternative sources of energy.”
He didn’t say much about railroads but it is common to ignore the differences between America’s highways and railroads. With highways everyone has equal access. Anyone can start a trucking company and be ready to haul freight and pay fuel taxes by using Federal highways and the interstate highway system. The trucking companies are private enterprise, but the roads are public enterprise so truck transportation becomes a joint partnership of business and government.
Railroads are private companies that build and maintain their right of way and they own their locomotives and rolling stock. America’s rail routes go back to the 19th century when the Federal government provided land grants to investors who built the lines.
Suppose for the last 50 or 100 years that anyone who invested in a locomotive and freight cars had the right to use the entire rail network as long as they paid fuel taxes just like truckers do for the highways. That way new shippers and new investors could decide trucks or rail without the need to spend billions building and maintaining their own railroads.
Think of a big shipper like United Parcel Service that started way back in 1907. Now they operate their own airplanes and their own trucks, but using the rails means an additional set of transactions with railroads. Shipping rates must cover the cost of fuel, locomotives and freight cars, but also the cost of capital and profit for the railroads.
When it’s time to decide rail or truck, the decision depends on different financial considerations rather than the best way to move freight. Since rail is not available with just the expense of locomotives, freight cars, fuel and fuel tax like it is for trucks, decisions favor trucks.
A whole highway, street and bridge construction industry has grown up from America’s system of interest free and pay as we go fuel tax finance for highways but not railroads. Railroads have to resort to risky private funding and fluctuating interest rates.
We can only speculate how much more rail transportation America would have if the rails and roads had equal access to financing, but even more important, if shippers could use the rails like they use the highways.
During the presidential campaign the Republicans pulled out their favorite bogeyman and called Mr. Obama a Socialist. The terms capitalism and socialism have special definitions in American politics. Socialists are bad guys in political campaigns, but socialist projects like the Interstate Highway System get funded anyway. We can also see that capitalism and socialism are not really the issue; it’s the rules and the finance that make the difference.
He didn’t say much about railroads but it is common to ignore the differences between America’s highways and railroads. With highways everyone has equal access. Anyone can start a trucking company and be ready to haul freight and pay fuel taxes by using Federal highways and the interstate highway system. The trucking companies are private enterprise, but the roads are public enterprise so truck transportation becomes a joint partnership of business and government.
Railroads are private companies that build and maintain their right of way and they own their locomotives and rolling stock. America’s rail routes go back to the 19th century when the Federal government provided land grants to investors who built the lines.
Suppose for the last 50 or 100 years that anyone who invested in a locomotive and freight cars had the right to use the entire rail network as long as they paid fuel taxes just like truckers do for the highways. That way new shippers and new investors could decide trucks or rail without the need to spend billions building and maintaining their own railroads.
Think of a big shipper like United Parcel Service that started way back in 1907. Now they operate their own airplanes and their own trucks, but using the rails means an additional set of transactions with railroads. Shipping rates must cover the cost of fuel, locomotives and freight cars, but also the cost of capital and profit for the railroads.
When it’s time to decide rail or truck, the decision depends on different financial considerations rather than the best way to move freight. Since rail is not available with just the expense of locomotives, freight cars, fuel and fuel tax like it is for trucks, decisions favor trucks.
A whole highway, street and bridge construction industry has grown up from America’s system of interest free and pay as we go fuel tax finance for highways but not railroads. Railroads have to resort to risky private funding and fluctuating interest rates.
We can only speculate how much more rail transportation America would have if the rails and roads had equal access to financing, but even more important, if shippers could use the rails like they use the highways.
During the presidential campaign the Republicans pulled out their favorite bogeyman and called Mr. Obama a Socialist. The terms capitalism and socialism have special definitions in American politics. Socialists are bad guys in political campaigns, but socialist projects like the Interstate Highway System get funded anyway. We can also see that capitalism and socialism are not really the issue; it’s the rules and the finance that make the difference.
Wednesday, January 6, 2010
Retail Costs and Manufacturing
The decline of the American Textile industry is well documented. In 1990 there were 928 thousand working in just the apparel industry; by 2008 it was down to 198 thousand. The decline is more than double the jobs lost in the automobile industry.
Most of us see our clothes marked "Made in China" or some far eastern country. In the debate over free trade economists have offered excuses for the made in China label. They said textiles and the cut and sew clothing industry are labor intensive and American labor is too expensive to compete with the Chinese.
News coverage on the global clothing industry often includes a picture of Asian women lined up in long rows at sewing machines suggesting another excuse: low cost needs large scale.
Large firms are common in manufacturing because manufacturing industries typically starts out with many companies that gradually consolidate into a few large scale producers. The automobile industry started out with hundreds of firms at the beginning of the last century. Gradually they combined into fewer, but bigger producers, until only three American companies survive in a small group of global auto companies.
The cut and sew clothing industry was never like the automobile industry, but large firms produced clothing to be sold and shipped to other firms in the wholesale and retail parts of the marketing chain.
Lately though creative retailers are finding small scale clothing production can be cost competitive when it is combined with their own retail operations. Retailers that produce on site in their own space capture the entire marketing margin; that is the sales price above their manufacturing costs.
Producing on site eliminates the wholesaler and has the potential to cut inventory and transportation costs. Clothing sales have seasonal fluctuations with peak sales in late summer and again in December. Staff doing cut and sew in off peak periods can be moved to retail selling in peak sales periods making more intensive use of staff and raising labor productivity and lowering costs.
Shipping charges from the Far East are eliminated with local production. Freight charges from China to Long Beach are only part of the expense to import clothing. There are Long Beach handling charges, warehouse in and out fees, forklift fees, customs entry fees, and customs duties, but the clothing shipment is still in Long Beach. Add the shipping fee from Long Beach to wherever, and when it is all added up shipping charges are not insignificant in the costs for importing clothing.
It is unusual for an industry to transform itself from a few dominate firms to many small firms in competition. It can happen though. For many years IBM dominated the computer industry. Then the microprocessor chip transformed the industry allowing hundreds of new firms to enter the hardware and software industry. The PC revolution created many jobs with firms only a fraction of IBM.
In the combined textile and apparel industries more than a million jobs are gone, but that should not mean it was inevitable as economist’s like to say. What looks inevitable may not be. America needs jobs and new ideas; maybe a smaller scale, fully integrated clothing industry is one place to look.
Most of us see our clothes marked "Made in China" or some far eastern country. In the debate over free trade economists have offered excuses for the made in China label. They said textiles and the cut and sew clothing industry are labor intensive and American labor is too expensive to compete with the Chinese.
News coverage on the global clothing industry often includes a picture of Asian women lined up in long rows at sewing machines suggesting another excuse: low cost needs large scale.
Large firms are common in manufacturing because manufacturing industries typically starts out with many companies that gradually consolidate into a few large scale producers. The automobile industry started out with hundreds of firms at the beginning of the last century. Gradually they combined into fewer, but bigger producers, until only three American companies survive in a small group of global auto companies.
The cut and sew clothing industry was never like the automobile industry, but large firms produced clothing to be sold and shipped to other firms in the wholesale and retail parts of the marketing chain.
Lately though creative retailers are finding small scale clothing production can be cost competitive when it is combined with their own retail operations. Retailers that produce on site in their own space capture the entire marketing margin; that is the sales price above their manufacturing costs.
Producing on site eliminates the wholesaler and has the potential to cut inventory and transportation costs. Clothing sales have seasonal fluctuations with peak sales in late summer and again in December. Staff doing cut and sew in off peak periods can be moved to retail selling in peak sales periods making more intensive use of staff and raising labor productivity and lowering costs.
Shipping charges from the Far East are eliminated with local production. Freight charges from China to Long Beach are only part of the expense to import clothing. There are Long Beach handling charges, warehouse in and out fees, forklift fees, customs entry fees, and customs duties, but the clothing shipment is still in Long Beach. Add the shipping fee from Long Beach to wherever, and when it is all added up shipping charges are not insignificant in the costs for importing clothing.
It is unusual for an industry to transform itself from a few dominate firms to many small firms in competition. It can happen though. For many years IBM dominated the computer industry. Then the microprocessor chip transformed the industry allowing hundreds of new firms to enter the hardware and software industry. The PC revolution created many jobs with firms only a fraction of IBM.
In the combined textile and apparel industries more than a million jobs are gone, but that should not mean it was inevitable as economist’s like to say. What looks inevitable may not be. America needs jobs and new ideas; maybe a smaller scale, fully integrated clothing industry is one place to look.
Tuesday, December 22, 2009
Health Care and Inequality
The debate over health care reform drags on with charges and counter charges. When the groups opposed to change want to throw down the gauntlet they will describe the Democrat’s proposals as a “complete takeover of the health care industry.”
Using the words “complete takeover” makes it sound like the private insurance industry once served people who now get health care provided through the government, or have no health care at all.
Opposition groups define the duty to provide health care as their right in private markets. They want health care to be an option that goes with a job. Otherwise the saga of America’s health care is a government takeover of groups ignored, and groups abandoned by the fee for service private sector.
Health care provided through employment leaves retirees out of health care, which is why those over 66, the Social Security retirement age, have Medicare health coverage. Notice that Medicare maintains the fee for service principles favored by the private sector. That’s because Medicare is financed with a 1.45 percent tax on wages, which fee for service advocates contend is just like an insurance premium.
Medicare is just one of the partial and patchwork solutions to health insurance. Since health care for those younger than 66 assumes employment, the unemployed are left out. Congress responded to the unemployed with legislation known as COBRA that allows the unemployed to buy their group health insurance at group rates, but only for 18 months. The time limit assumes the unemployed will find more work with health insurance.
Since jobs that pay low wages, or jobs that use low skills, do not always include health care the working poor are left out. Congress responded with Medicaid, but with strict limits on income and assets. The limits are so low that many families above the Medicaid limit are without health insurance. Congress responded with legislation known as SCHIP (State children’s health Insurance Program) as a Medicaid supplement to cover children, but not their parents.
Workmen’s compensation, which is really health insurance for injuries on the job, duplicates some of the coverage for private insurance policies but ignores the unemployed since it too requires a job.
If a job does not include health care insurance individual and family policies get mysteriously expensive and unaffordable for millions with wages too low to pay fees and premiums charged.
The patchwork of government health care reflects the limitations imposed by private sector advocates with the political strength to maintain fee for service principles.
To have health insurance for the uninsured it will be necessary to address the inequality of wages and income outside a fee for service system. The wealthy will have to pay higher income taxes to support health care subsidies to have health care reform. Most of the public debate tries to disguise this requirement, but reform that insures the uninsured must have subsidies to make up for low income.
The debate goes on, but the wealthy are resisting. Health care reform remains doubtful, but we will see.
Using the words “complete takeover” makes it sound like the private insurance industry once served people who now get health care provided through the government, or have no health care at all.
Opposition groups define the duty to provide health care as their right in private markets. They want health care to be an option that goes with a job. Otherwise the saga of America’s health care is a government takeover of groups ignored, and groups abandoned by the fee for service private sector.
Health care provided through employment leaves retirees out of health care, which is why those over 66, the Social Security retirement age, have Medicare health coverage. Notice that Medicare maintains the fee for service principles favored by the private sector. That’s because Medicare is financed with a 1.45 percent tax on wages, which fee for service advocates contend is just like an insurance premium.
Medicare is just one of the partial and patchwork solutions to health insurance. Since health care for those younger than 66 assumes employment, the unemployed are left out. Congress responded to the unemployed with legislation known as COBRA that allows the unemployed to buy their group health insurance at group rates, but only for 18 months. The time limit assumes the unemployed will find more work with health insurance.
Since jobs that pay low wages, or jobs that use low skills, do not always include health care the working poor are left out. Congress responded with Medicaid, but with strict limits on income and assets. The limits are so low that many families above the Medicaid limit are without health insurance. Congress responded with legislation known as SCHIP (State children’s health Insurance Program) as a Medicaid supplement to cover children, but not their parents.
Workmen’s compensation, which is really health insurance for injuries on the job, duplicates some of the coverage for private insurance policies but ignores the unemployed since it too requires a job.
If a job does not include health care insurance individual and family policies get mysteriously expensive and unaffordable for millions with wages too low to pay fees and premiums charged.
The patchwork of government health care reflects the limitations imposed by private sector advocates with the political strength to maintain fee for service principles.
To have health insurance for the uninsured it will be necessary to address the inequality of wages and income outside a fee for service system. The wealthy will have to pay higher income taxes to support health care subsidies to have health care reform. Most of the public debate tries to disguise this requirement, but reform that insures the uninsured must have subsidies to make up for low income.
The debate goes on, but the wealthy are resisting. Health care reform remains doubtful, but we will see.
Monday, December 14, 2009
Gambling and Taxes
House democrats announced a plan to raise personal income tax rates up to 5.4 percent on incomes over $350,000. The Obama Administration is supporting a similar plan. The additional tax revenue will be used to pay for health care proposals that extend coverage to 37 million people who are currently without coverage.
In a recent article about the proposal in the Washington Post [Health-Care Plan Would Add Surtax On Wealthy, July 15] there were several objections quoted. One objection caught my eye. It was from Senator Ben Nelson of Nebraska.
He said, "Tax is a four-letter word" with voters. Even families not ranking in the top 1 percent of earners hope they're going to be there someday. So they don't necessarily think it's fair."
He used percent to define the rich, which is significant because America is a democracy. Remember in a democracy 50 percent plus one win elections. Therefore, if Senator Nelson is right then the other 99 percent of American voters, not ranking in the top 1 percent, accept having low taxes for the wealthy because it gives them hope they might become wealthy. The 99 percent would include voters from the 37 million without health care; unless someone thinks the richest 1 percent go without health care.
Notice the word “hope” in his statement. Hope is a word often associated with gambling rather than tax policy, or fairness, or anything else. Americans and politicians talk about what is fair and what is unfair, but when it’s time to vote no one has to consider what is fair. They can vote for any reason they want including the hope they will win a state lottery and pay low taxes on their winnings.
There was a time when the wealthy paid 90 percent of their incremental income as income tax. That was back nearly 50 years ago, but it was also a time when state lotteries and gambling was mostly illegal.
For the millions who lived on a wage 50 years ago, there was little hope of becoming wealthy without years of saving, if saving was possible. Gambling mostly took place in black markets and went untaxed.
For the millions who live on a wage today, there is little hope of becoming wealthy without years of saving, if saving is possible, but the gradual rise of gambling overlaps the decline of the top income tax rate, which dropped to 35 percent back in 2003.
I read the media stories about lobbyists and the influence of money in politics, but the vote has not been abolished in the United States. The richest one percent of Americans cannot have low taxes in a democracy without the acceptance or support of millions.
Senator Nelson’s statement adds anecdotal confirmation to what I have long suspected: gambling has more influence on America’s tax policy than any of us want to admit. Gambling gives hope to the many, but low taxes to the rich. Just ask Senator Nelson.
In a recent article about the proposal in the Washington Post [Health-Care Plan Would Add Surtax On Wealthy, July 15] there were several objections quoted. One objection caught my eye. It was from Senator Ben Nelson of Nebraska.
He said, "Tax is a four-letter word" with voters. Even families not ranking in the top 1 percent of earners hope they're going to be there someday. So they don't necessarily think it's fair."
He used percent to define the rich, which is significant because America is a democracy. Remember in a democracy 50 percent plus one win elections. Therefore, if Senator Nelson is right then the other 99 percent of American voters, not ranking in the top 1 percent, accept having low taxes for the wealthy because it gives them hope they might become wealthy. The 99 percent would include voters from the 37 million without health care; unless someone thinks the richest 1 percent go without health care.
Notice the word “hope” in his statement. Hope is a word often associated with gambling rather than tax policy, or fairness, or anything else. Americans and politicians talk about what is fair and what is unfair, but when it’s time to vote no one has to consider what is fair. They can vote for any reason they want including the hope they will win a state lottery and pay low taxes on their winnings.
There was a time when the wealthy paid 90 percent of their incremental income as income tax. That was back nearly 50 years ago, but it was also a time when state lotteries and gambling was mostly illegal.
For the millions who lived on a wage 50 years ago, there was little hope of becoming wealthy without years of saving, if saving was possible. Gambling mostly took place in black markets and went untaxed.
For the millions who live on a wage today, there is little hope of becoming wealthy without years of saving, if saving is possible, but the gradual rise of gambling overlaps the decline of the top income tax rate, which dropped to 35 percent back in 2003.
I read the media stories about lobbyists and the influence of money in politics, but the vote has not been abolished in the United States. The richest one percent of Americans cannot have low taxes in a democracy without the acceptance or support of millions.
Senator Nelson’s statement adds anecdotal confirmation to what I have long suspected: gambling has more influence on America’s tax policy than any of us want to admit. Gambling gives hope to the many, but low taxes to the rich. Just ask Senator Nelson.
Thursday, December 3, 2009
Telecommuting and Green Jobs
President Obama announced plans to create “green jobs” as part of the Reinvestment and Recovery Act passed earlier this spring. He was quoted as saying "A green, renewable-energy economy isn't some pie-in-the-sky, far-off future. It is now. It is creating jobs now."
The new law provides money and development programs for adopting environmental technologies and helping to expand green projects. Green projects that reduce the use of fossil fuels and expand renewable energy, retrofit buildings, expand mass transit, or longer term initiatives like solar power, wind mill farms and bio-fuels will increase jobs and employment.
Telecommuting could save fossil fuels and reduce green house emissions, which makes it a green initiative but unlike the green projects mentioned above it conflicts with work and jobs. Telecommuting and outsourcing are possible because digital technologies applied in computing and communications let people work anywhere and anytime.
Outsourcing usually has more attention than telecommuting in the popular media, but they are nearly the same and have the same potential to reduce employment. For example, take the customer service representative, which holds 8th place among America’s occupations with 2.1 million total jobs in nearly every sector of the economy, but especially when we need assistance in finance and insurance.
Customer Service Representative gets media attention because America’s corporations outsource some of this work to India and other countries. Many regard outsourcing as the action of ruthless corporate tycoons ripping the heart out of America, but allow me to suggest outsourcing is very much a telecommuting issue.
Over 80 percent of Customer Service Representative jobs are reported for the country’s metropolitan areas, where millions commute by car and donate thousands of hours of their time using up gasoline and wearing out their cars so that others might work. Unlike production workers who must work at factories, Customer Service Representatives work can be anywhere with a computer and a telephone, as the companies themselves have so definitely proved.
Doing computer work from home as telecommuters not only reduces jobs in the automobile industry, car repairs, gasoline, cement, and highway construction, but also for jobs in real estate, office rental, building maintenance, building repair and local government. Quarter-time telecommuting potentially reduces office demand by 25 percent.
The Obama energy initiatives attempt to develop new supplies of energy that will cut down on fossil fuels and green house emissions and create jobs. Politically it should be much easier to do because it avoids sacrifice. Telecommuting confronts America with conflicts and trade offs. Telecommuting can save resources and reduce green house emissions, it will also eliminate jobs.
Business has similar incentives to expand telecommuting as it does outsourcing to other countries. Government has begun to experiment with limited telecommuting. If America gets serious about green house gases it should expect to confront the conflict between energy and jobs. The Obama plan does the easy things first, but it may not be enough. More green initiatives will require us to change the way we think about work and jobs.
The new law provides money and development programs for adopting environmental technologies and helping to expand green projects. Green projects that reduce the use of fossil fuels and expand renewable energy, retrofit buildings, expand mass transit, or longer term initiatives like solar power, wind mill farms and bio-fuels will increase jobs and employment.
Telecommuting could save fossil fuels and reduce green house emissions, which makes it a green initiative but unlike the green projects mentioned above it conflicts with work and jobs. Telecommuting and outsourcing are possible because digital technologies applied in computing and communications let people work anywhere and anytime.
Outsourcing usually has more attention than telecommuting in the popular media, but they are nearly the same and have the same potential to reduce employment. For example, take the customer service representative, which holds 8th place among America’s occupations with 2.1 million total jobs in nearly every sector of the economy, but especially when we need assistance in finance and insurance.
Customer Service Representative gets media attention because America’s corporations outsource some of this work to India and other countries. Many regard outsourcing as the action of ruthless corporate tycoons ripping the heart out of America, but allow me to suggest outsourcing is very much a telecommuting issue.
Over 80 percent of Customer Service Representative jobs are reported for the country’s metropolitan areas, where millions commute by car and donate thousands of hours of their time using up gasoline and wearing out their cars so that others might work. Unlike production workers who must work at factories, Customer Service Representatives work can be anywhere with a computer and a telephone, as the companies themselves have so definitely proved.
Doing computer work from home as telecommuters not only reduces jobs in the automobile industry, car repairs, gasoline, cement, and highway construction, but also for jobs in real estate, office rental, building maintenance, building repair and local government. Quarter-time telecommuting potentially reduces office demand by 25 percent.
The Obama energy initiatives attempt to develop new supplies of energy that will cut down on fossil fuels and green house emissions and create jobs. Politically it should be much easier to do because it avoids sacrifice. Telecommuting confronts America with conflicts and trade offs. Telecommuting can save resources and reduce green house emissions, it will also eliminate jobs.
Business has similar incentives to expand telecommuting as it does outsourcing to other countries. Government has begun to experiment with limited telecommuting. If America gets serious about green house gases it should expect to confront the conflict between energy and jobs. The Obama plan does the easy things first, but it may not be enough. More green initiatives will require us to change the way we think about work and jobs.
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