The travails of COVID-19 are many, but there are also lessons that can be learned from the pandemic, many of them involving the idea of building societal and individual resilience both physically and economically.

One of the most obvious of these lessons is how many people are (or could be) working from home, who previously did not. An article by Gil Press in Forbes discusses some of the implications of this dramatic shift, reporting that:

In two surveys of American workers conducted in early April and early May, Erik Brynjolfsson and colleagues found that of those employed pre-COVID-19, about half are now working from home. They also found that states with more people in management, professional and related occupations were more likely to see large shifts toward working from home and had fewer people laid off or furloughed.”

Press goes on to observe that:

During the early stages of the outbreak’s economic fallout, 90% of the decrease in employment – or 2.6 million of the total loss of 2.9 million between February and March – arose from positions that could not be teleworked, according to a Pew Research Center analysis of federal government data.

He further notes that “A 2017-2018 survey of a representative sample of American workers by the Bureau of Labor Statistics (BLS) found that 43.6% were able to telework.”

There is, of course, much speculation about whether this is likely to be an ongoing change in how Americans work, or whether it will be just a blip. But history (and current political shenanigans) suggest that governments will do everything they can to prevent telework and worker-autonomy from being the new normal.

The two big roadblocks are going to be (unsurprisingly) taxation and regulation of employment.

First, on taxes. Currently, the United States is a crazy quilt of tax liability for people who telework both internally and externally. Teleworkers (and employers of teleworkers) have to comply with a bewildering level of complexity to avoid running afoul of state and federal tax laws. In some cases, people working from home in one state may have to file specific state tax returns in other states where they earn income. California and New York are two such states. In this author’s experience (with California) the cost of preparing a California tax return (and ensuring that is congruent with other state and federal tax returns) can easily exceed the value of doing free-lance work for employers in California, essentially shutting freelancers out of the market. This has been a problem with regard to telework since long before COVID-19, as I wrote in this brief analysis for the American Enterprise Institute in 2010.

Now to regulation. The newest threats to telework are flowing, not surprisingly, from many of the same states that seem to think they own you if you derive any income from inside their borders. A toxic coalition of labor unions, labor regulators, and left-leaning politicians are going full-bore with efforts to strangle the baby of potential workstyle autonomy in the cradle. It started in California with Assembly Bill 5, originally an attempt by unions, taxi-cartels, and liberal governments uniting to stomp out competition from “gig-workers” such as Uber and Lyft drivers. But AB5 cast a rather broad net that wound up capturing everyone from independent musicians, to writers, truck drivers, doctors, lawyers, accountants, etc. It was basically a law intended to force everyone to work for a defined corporate entity under the control of state legislatures for everything from compensation and benefits to labor conditions. The idea quickly spread to New York and other states. Politicians are busy trying to carve out exemptions for politically-valuable professionals (whose professional associations have lobbying clout), but there is still a desire to wipe out the gig-economy. As AB5 sponsor Lorena Gonzales put it, “these were never real jobs.”

COVID-19 has shown that not only can far more people work from home, and as independent contractors than did pre-pandemic, but polls suggest that many want to continue that way. Working from home is both resilient in the face of many disasters and disruptions, but has innumerable other benefits such as enabling a better work-life balance, less wasted money (and spewed pollution) when commuting, and less costs for clothing that are not actually necessary for the discharge of a particular job, but are “customs” that double as status-indicators in private-sector businesses.

But people’s desires may be stifled by the old-style politics of taxation and regulation, regardless of worker choice. People need to resist the reactionary spread of state/jurisdictional controls over employment conditions if we are to retain the greater benefits of a society where you’re free to be your own boss, set your own hours, work from where you want to, and negotiate the price for your labor that you think is fair.

Author

  • Kenneth Green has studied energy and environmental policy at free-market think tanks in North America for over 20 years. He holds a Doctoral degree in Environmental Science and Engineering from UCLA, and has over 850 publications to his credit.