responding-to-a-terrible-idea-for-post-pandemic-economic-recovery

Responding to a Terrible Idea….

“It has taken decades and centuries to build up the wider business and economic infrastructure that supports face-to-face working,” points out ‘Macro Strategist’ Luke Templeman, writing in Deutsche Bank’s Konzept magazine. “Those who can work from home… should be taxed in order to smooth the transition process for those who have been suddenly displaced.” What a terrible idea.

Perhaps Konzept’s editorial strategy is to provoke debate. But as we contemplate recovery planning for post-pandemic economies, the stakes are too high for us to be polite in the face of weak analysis and rotten policy ideas.

We don’t have time for rotten policy ideas.

In A work-from-home tax,  Templeman opens by reminding us that work from home has been growing in popularity for years, and asserting that COVID has “turbocharged that growth.” He cites research that indicates a majority would like to work from home two or three days per week post-COVID. This after some nine months into the experience of ‘lockdown,’ ‘sheltering in place,’ and ‘physical distancing.’

“The sudden shift to WFH [work from home] means that, for the first time in history, a big chunk of people have [sic] disconnected themselves from the face-to-face world yet are still leading a full economic life.” Apparently, “that is a big problem for the economy.”

Back up a second…. “Disconnected themselves?!”

Perhaps in the rarefied air of his Great Winchester Street office, Mr Templeman has forgotten his macro-economic history…. Our corporatized, nine-to-five economic model is premised on a mechanistic design that was ideal for the industrial age. It was Henry Ford who conceived of the 40-hour work week to streamline output of cars from his Detroit factory.

The inertia of the nine-to-five habit persisted as the knowledge economy took hold not because employees wanted it, but because it was convenient for employers. And now that we’re in a once-in-a-century global pandemic, working from home is the only safe alternative for a great many employees. Their choice—if they have one!—is less like ‘disconnecting’ and more like unshackling. Safety first, Mr Templeman. And when did we stop upholding the right to self-determination and autonomy?

What would this tax fund, you ask?

Is this the point in the piece that redeems the terrible thesis? No such luck…. “In the US, the $48bn raised could pay for a $1,500 grant to the 29m workers who cannot work from home and earn under $30,000 a year (excluding those who earn tips). Many of these people are those who assumed the health risks of working during the pandemic and are far more ‘essential’ than their wage level suggests.”

Ah…. So this is about equity… upholding the economic rights and livelihood of those most adversely affected by the pandemic. Noble! And for the average American worker who ‘chooses’ to work from home, we’re only talking about $10 for every WFH-day, against an annual salary of $55,000. That doesn’t sound like much, does it?

Nice try, Mr Templeman, but no cigar….

What Mr Templeman advocates is a wealth transfer not from the legitimately wealthy, but from the middle class—a demographic cohort already sandwiched between rising costs of living and decreasing real wages.

Consider this scenario…. Perhaps we’re talking about a parent of two, whose young adult kids are about to enter college, whose partner is an essential services worker. They haven’t seen extended family in nine months. They cancelled—but weren’t refunded—their long-planned spring vacation. The clawing, claustrophobic stress of it all has made unwanted house guests of anxiety and depression in their small, suburban household, but they can’t afford to pay the $130 per hour for counseling sessions, now that they’ve used the three that were covered by their healthcare plan.

How much of that feels familiar to you, dear reader? I consider myself to be incredibly privileged and profoundly fortunate, yet five out of seven of those factors are present in my home. How many are true in yours?

So who should really pay the bill for all this change?

Since mid-century, western, liberal economies have steadily and dramatically eroded corporate taxes. While employment levels have generally been strong, profits have been concentrated in shareholder gains, while wage levels have gone in the opposite direction.

So how responsible is it for Mr Templeman—or more pointedly, Deutsche Bank—to put the onus of economic transformation on the backs of the very employees whose labour has subsidized the 1%?! Straight up, it’s not responsible. It’s not wise, it’s not healthy, it’s not productive, and it’s certainly not progressive. This is an utterly outdated, oppressive, regressive, privileged, and ignorant analysis.

Recovery planning must center human, societal and ecological wellbeing.

As economies recover post-pandemic and if we have any hope to ‘build back better’ or ‘emerge stronger,’ what we need is an analysis that centers human, societal and ecological wellbeing. Had Mr Templeman equipped himself with such a lens, perhaps he’d have come up with a Konzept worthy of polite discussion….

In fairness, we need bold ideas. Big, fresh, ideas. But we also need a thorough analysis of what ails society—and what fractures have been revealed and exacerbated by COVID-19.

 

Mike Rowlands is President & CEO at Junxion. Reach him via [email protected]

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