This Reclaiming Research entry is a rebuttal to Deutsche Bank’s Konzept Magazine proposing a work-from-home tax.
In 2020 work-from-home became headline worthy news and what’s worse, so did a work-from-home tax. it was always going to be an attention grabbing headline: ‘Just when you thought things couldn’t get any worse, now you’re going to have to pay to work at your dining room table’. This headline came on the back of an analysis in Deutsche Bank’s Konzept [1] and the narrow lens through which it viewed working-from-home. I have to admit that I applaud Luke Templeman as he sets out on the Herculean task of attempting to quantify the economic impact of working-from-home. There is no doubt that a wholesale change in the way people engage with work is a multi-faceted socioeconomic behemoth, but the analysis bypassed the potential large scale benefits with barely a mention. It painted a picture where work-from-home was now a problem to be solved because the employees took all the winnings and their costs ‘usually pale in comparison with the gains’ whilst ‘contributing less to the infrastructure of the economy whilst still receiving its benefits’.
Now, in part a work-from-home tax would supposedly level the playing field for people like myself who’s work cannot be done from home. I would however like to challenge some of their claims, on the grounds that they have overlooked the realities of working from home.
The analysis offers ‘direct financial savings’ for employees on ‘travel, lunch, clothes and cleaning’ and also ‘indirect savings’ as a result of ‘forgone socialising’ and other expenses solely related to being at the office. The rather limited list of costs are in the form of additional stress of juggling work and children, and dealing with an imperfect home-office setup.
But it is interesting that there is no mention of financial costs of working-from-home. No mention of the cost of paying extra for fibre broadband because your internet can’t hack endless zoom meetings, or the increased consumption and of other utilities at home. These utilities are also bought at a higher cost by the homeowner than the employer on a commercial tariff and there's no mention of the cost of refreshments consumed that are supplied in some workplaces. In fact no mention of any areas where the employer stands to gain and the employee lose out financially. It is a glaring, and rather jarring, omission that paints working-from-home in an unrealistic light.
The savings they mention aren’t clear cut either. Working-from-home does not mean you need less clothes, your weekend wardrobe and holiday clothes are unlikely to cut it, it is no coincidence that Asos’ profits quadrupled in the first round of lockdown. Those clothes still need to be cleaned, so your washing machine won’t be getting a rest because you’re working-from-home, you may save on a periodic dry cleaning bill though. It’s also likely you’ll need to clean the house more, simply because you’re there more.
Commuting is a balance, some will save on driving but for those who get weekly or annual travel passes working 2-3 days a week in a workplace can produce travel costs as large as a full time office based role.
Unfortunately it doesn’t get any better when we get past the commute (or lack thereof) and on to lunch. Whilst taking a pack lunch to work may decrease your eat out spend, having the facility to prepare a better and more satisfying meal at home may increase your spend at the supermarket. Their view also excludes the fact that someone may order take out for lunch on the basis that they are saving elsewhere, actively contributing economically in the process.
Socialising takes on a different form in the work-from-home world too because it can have an isolating effect on the employee. Further investigation would need to be done to determine whether there really was a saving to be made or if there was simply a redistribution of economic expenditure from the bar next to the office with workmates to more general socialising at a nice restaurant across town. The complication continues with the earlier assertion that remote workers are ‘contributing less to the infrastructure of the economy whilst still receiving its benefits’. Workers may, or as we have seen may not, be contributing less directly to transportation providers but let us not forget that in the United Kingdom roads and rail infrastructure are at least partly funded by central taxation. We have also demonstrated that they are certainly going to be personally contributing more to the telecoms and energy industries. I’m trying not to labour the point, but hopefully this shows that this is not the clear cut employee win advertised.
Even with all this the fact that, according to the report, the ‘vast majority of home workers want to continue remote working, on at least a part time basis’ would suggest that they would be happier with the work life balance provided by mixed working and a happy worker is also a more productive worker. Up to 20% more productive according to a study by the Social Market Foundation [3] and this is reflected in the Deutsche Bank survey where more than 70% people said they are at least as productive at home with around 40% being more productive.
A work-from-home tax starts to look almost a little vindictive in this light. Working-from-home is not all roses financially but workers still want the option, it’s likely that people think it will improve their lives as a whole. A tax is a disincentive for employers to hire outside of their traditional pool and whilst there are always losers in any paradigm shift, the analysis exaggerates the risk of working-from-home to town and city centres whilst ignoring other risks. Working from home could have an enormous wider positive socioeconomic impact, helping to ameliorate inequalities and narrow class divisions, we shouldn’t be disincentivizing it by taxation.
Dave is a Working Class writer and activist, who can be found on twitter at @omniscientdave.
We explore the class implications of working from home in our #BritainHasClass piece, Working (Class) From Home