Deutsche Bank recently conducted a study and proposed a new tax.  Whenever you tax something, you get less of it.  If you subsidize something, you get more of it.  Deutsche’s central desire is to tax people working from home (WFH) to redistribute that money to people who cannot work from home along with reducing the number of people who chose to WFH.  Additionally, the bank points out that the 5% tax they recommend will not make employees worse off because it will be offset by the savings on automotive, clothing, childcare, etc.  Deutsche also believes that WFH will negatively affect the local economies of areas surrounding large employers due to decreased restaurant traffic, gas sales, public transit, and other services provided to commuters.  Essentially, Deutsche Bank sees rising trends in WFH as a threat to the existing order, and proposes this tax to redistribute the newfound wealth and efficiencies of the WFH crowd.

Personally, I am surprised that the bank did not see the positive economic benefits presented by working from home.  For starters, fewer commuters mean safer roads and less pollution.  I have often run into delays on my way to work due to an accident caused by overcrowding and reckless drivers on roads during rush hour.  Sure, people who WFH still drive; however, they drive less often and at more diverse times which makes the roads safer for those still commuting, hopefully resulting in far diminished loss of life and property.  Reduced pollution also accompanies reduced driving.  WFH seems like a spontaneous solution to the complex problem of air pollution, so why would we discourage people who want to WFH?  The opportunity to WFH effectively subsidizes driving less.  Essentially, it internalizes the positive externality of driving less often at less busy times.*

On top of that, the money saved on commuting, lunches, public transit, nice clothing, etc. will be redirected to areas of the economy that more directly serve higher order desires of the consumers.  Maybe instead of spending money on gas, a consumer can afford to devote more to her child’s education?  Perhaps money saved on having a nice tie for everyday of the week can be donated to a local church’s ministry?  While some spending is redirected to higher order desires, other dollars will simply go to the same industries in different areas.  Money not spent on lunch near the office may well still be spent on purchasing lunch to go closer to home.  Instead of purchasing new black leather shoes, workers may choose to pick up new running shoes.  It is impossible to know where the capital once devoted to commutes and office spaces will go!  I have yet to address the massive savings companies can experience by reducing office space.  Rent could be driven down as landlords seek to find new tenants for their former commercial space, possibly providing more affordable housing closer to work for an individual who cannot telework!  There are limitless (okay, maybe not limitless) possibilities for how consumers could spend this newfound surplus!

The fear here is that new innovation is going to leave some behind in the dust while presenting an unfair advantage to others.  This fear of what Joseph Schumpeter called, “creative destruction” has been prevalent for centuries.  People feared sewing machines, Uber, assembly lines, internet, automobiles, combines, and countless other innovations.  Change is scary, and people often forget to look past the first step, jobs changing to account for WFH, to see the possibilities that follow when resources previously devoted to the old order are refocused to new consumer needs and wants.  I was personally afraid of the shift to work from home.  After all, work was an easy place to meet new people and share the love of Jesus Christ.  I think Christians really need to consider how they can leverage their jobs to spread the gospel, and I had no idea how I was going to truly connect with coworkers while WFH.  However, I have seen an increased intentionality amongst my coworkers and superiors to ensure that individuals in the workplace can connect in this new environment.  Connecting with coworkers certainly looks different, but interpersonal connections have not been destroyed; they may have been enhanced in some cases.  Take it from someone who feared change for reasons of eternal significance: innovation is a good thing.

*Internalizing externalities allows those involved in the transaction to feel the full effect of their activities and engage in a more market efficient amount of said activity.  For example, if a fishery is having problems with pollution from a nearby tire factory, the best way to ensure the most efficient number of tires are produced and fish are bred would be to have the tire factory buy the fishery or vice versa.  This way, one owner feels the full affect of the pollution and hopefully adjusts activity to produce a more efficient outcome.  In our example of car pollution, the consumer is given the opportunity to WFH, so he drives less.  This gives him greater spending power in other areas.  It is not exactly internalizing the externality, but it helps him feel the positive effects of his actions that otherwise would have only been felt by the people who didn’t breathe in his exhaust or didn’t have to wait for him at the stop sign.

As an aside, thanks to fellow Bereans writer, Stan Schwartz, for his help with this article and title.