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How Remote Work Will Increase the Costs of Government

As the work-from-home revolution shows signs of creating a “two-tiered system” of public employment, government employees who can’t do their jobs remotely are going to expect to be paid a premium.

A high-school science class
A high school science class. The issue of a premium for public employees who can’t work from home is likely to be at the forefront of teachers’ minds because their comparative reference points are other professionals, many of whom can work remotely. (Shutterstock)
In January, Washington, D.C., Mayor Muriel Bowser was so worried that remote work was driving her city into a death spiral — where fewer commuters mean less business, lower tax revenues and higher public service costs — that she daringly challenged President Biden to get federal employees back to in-person work.

Unfortunately for Bowser and other government leaders across the country, telework policies are fast becoming a common public-sector union demand in collective bargaining negotiations. Spurred by the COVID-19 lockdowns, the work-from-home (WFH) revolution not only depleted downtowns of the workers who bring vibrancy and safety in numbers but also stands to increase the costs of government.

Only 3.9 percent of union contracts had any work-from-home provisions prior to 2020, according to a Bloomberg Law analysis. Now, across the country public-sector unions representing workers who can do their jobs remotely are pushing to insert WFH provisions in contracts. In New Mexico, for example, CWA Local 2265 members rallied this January to enshrine telework rights in their contract. In Maryland, AFSCME Council 3 is currently pushing for similar rights to be enshrined in state law. And the union representing workers at the National Science Foundation and the National Archives recently signed a contract expanding remote work options.

Certainly remote work has advantages for both employees and employers. Many private firms see WFH as an opportunity to save a bundle on commercial rents by reducing their office space in expensive central cities. Surveys of business executives also suggest that WFH can empower companies to save money on salaries because employees prize remote work; research by Stanford University economist Steven J. Davis and colleagues found that workers value two or three days of remote work per week to the tune of 5 percent of salary. Firms and workers also report greater productivity, in part because the average WFH employee saves just over an hour in daily commuting time.

Public-sector employment, however, is different. WFH is a benefit that only a minority of government employees can enjoy. A substantial majority of public workers will always need to be face-to-face full time to do their jobs — think of police officers, firefighters, bus drivers, trash collectors and teachers.

The danger, as New York City Mayor Eric Adams has put it, is that WFH provisions for a minority of workers will create a “two-tiered system” of public employment. And as we saw when school districts tried to reopen schools during the pandemic, unions aren’t in the business of giving away negotiating leverage for free. When it comes to WFH, in fact, worker surveys suggest they will demand a premium for full-time in-person work.

Moreover, the demographic makeup of the public-sector workforce is disproportionately composed of workers who the Stanford study found prize remote work the most: women with children who have long commutes. This is precisely the group that we rely on to staff K-12 schools, especially in large unionized urban districts.

Bottom line: If the WFH premium cannot be translated into salary, such workers and their unions will demand that commuting costs and other items be covered by their government employers. Whatever the case, government costs will rise.

New York City will serve as a test case. Mayor Adams recently signed a contract with District Council 37, the union representing some 150,000 civilian city workers, committing to exploring hybrid work schedules for some jobs. Deals with DC 37 or the United Federation of Teachers typically set a pattern in the city’s public-sector collective bargaining, based on the year-over-year raises for the life of the contract. The big question now is whether the UFT, and behind it the city’s other unions, will accept DC 37’s salary deal. The UFT might well object because the raises included in the DC 37 contract don’t match inflation, but the teachers’ union could add a new argument for higher salaries: that they need a premium for in-person work to retain good teachers.

Indeed, the WFH premium issue is likely to be at the forefront of teachers’ minds because their comparative reference points are other professionals, many of whom can work from home. While teachers typically only work nine months a year with a substantial number of holiday breaks, there has been considerable dissatisfaction in the profession in recent years as salaries have been relatively flat since the Great Recession and the pandemic added new strains. Therefore, teachers are likely to be the group of public employees most jealous of the WFH revolution. In short, recruiting good people to teach in K-12 public schools is likely to face new competition with jobs that offer at least some remote work.

Insofar as remote work policies create new inequalities in public-sector employment, union representatives will try to find ways to compensate for them. It will ultimately be taxpayers who foot the bill.

Daniel DiSalvo is a professor of political science at City College of New York-CUNY. Michael Hartney is an assistant professor of political science at Boston College and a fellow at Stanford University’s Hoover Institution. Both are fellows at the Manhattan Institute.

Governing's opinion columns reflect the views of their authors and not necessarily those of Governing's editors or management.
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