People always bring up this objection, but it’s extremely solvable: just pay employees for their travel respective to the median commute time for that area. Sure, people who live close get a little bonus and people who live far away get slightly less; but it removes all impetus to game the system and helps people who need it.
Germany kind of does that… When you file your taxes, you claim the “Pendlerpauschale”, which is, roughly translated, the commute lump sum. For the first 20 kilometres between home and work, people get 30 cents per km, any km after that gives you 38 cents.
It kind of works in the sense that the money you spend to get to work is more or less evened out. It is also paid regardless of your means of transport, so cheaper means (such as bicycles or trams) are incentivised by potentially making you some money in return. However, this is still far from an hourly wage… We’re talking about a few hundred euros, maybe a few thousand per year if you have a long commute.
If you used the median time and would force employers to pay a wage I really don’t get how you would either prevent people to move further away (if you have worker protection laws) or people being fired for living too far away (if you live in the USA). This would also make it far more profitable for higher incomes to commute, which seems kind of counter-intuitive as they are probably the ones who need it the least and who would be able to just move to a new home if they wanted to.
If you pay everyone the same “travel allowance” then that’s just part of everyone’s total compensation and compensation will be reduced somewhere else. There’s no magic money fountain at a business. An employee’s compensation is an employee’s compensation. Simply declaring that “this portion of your pay is a travel allowance” is absolutely meaningless.
A company is not going to pay everyone more money just to help those who live far away who “need it”.
Well there sometimes is a magic money fountain. Like when the minimum wage goes up the money fountain just pays people more money that apparently wasn’t there before. Or when people ask for a raise and their boss tells them no so they leave and have to pay a new hire 140% of the original employee. The trick is to make the money fountain think you’re not going to work anymore because it’s only on a trickle. As soon as you stop working it remembers where all the money is. Magic
Economists like to pretend that currency is entirely rational, real, finite, and concrete, but it’s really not. That fiction only holds together as long as the bulk of people are willing to believe it.
Besides, these laws would never be two lines long like are written here. They would have addenda and provisions and such, preventing businesses from discriminating against employees based upon commute length, giving an upper limit, preventing a decrease in compensation to accommodate the commute benefit, and so forth.
And in the end would it turn out to be less than worthwhile? Maybe. But current remuneration in Western culture emphatically isn’t working. We need either one big change or lots of little changes, and this would fall in the latter category.
People always bring up this objection, but it’s extremely solvable: just pay employees for their travel respective to the median commute time for that area. Sure, people who live close get a little bonus and people who live far away get slightly less; but it removes all impetus to game the system and helps people who need it.
Germany kind of does that… When you file your taxes, you claim the “Pendlerpauschale”, which is, roughly translated, the commute lump sum. For the first 20 kilometres between home and work, people get 30 cents per km, any km after that gives you 38 cents.
It kind of works in the sense that the money you spend to get to work is more or less evened out. It is also paid regardless of your means of transport, so cheaper means (such as bicycles or trams) are incentivised by potentially making you some money in return. However, this is still far from an hourly wage… We’re talking about a few hundred euros, maybe a few thousand per year if you have a long commute.
If you used the median time and would force employers to pay a wage I really don’t get how you would either prevent people to move further away (if you have worker protection laws) or people being fired for living too far away (if you live in the USA). This would also make it far more profitable for higher incomes to commute, which seems kind of counter-intuitive as they are probably the ones who need it the least and who would be able to just move to a new home if they wanted to.
But you don’t get paid the “Pendlerpauschale”. You can only deduct it from your taxes.
Let’s just hope that if you travel eighty kilometres to work you’ll earn enough for this distinction to no longer be relevant?
That would mean paying a marginal tax rate of 100%. The maximum marginal tax in germany is 45%, if you make more than €277000 per year.
If you pay everyone the same “travel allowance” then that’s just part of everyone’s total compensation and compensation will be reduced somewhere else. There’s no magic money fountain at a business. An employee’s compensation is an employee’s compensation. Simply declaring that “this portion of your pay is a travel allowance” is absolutely meaningless.
A company is not going to pay everyone more money just to help those who live far away who “need it”.
Well there sometimes is a magic money fountain. Like when the minimum wage goes up the money fountain just pays people more money that apparently wasn’t there before. Or when people ask for a raise and their boss tells them no so they leave and have to pay a new hire 140% of the original employee. The trick is to make the money fountain think you’re not going to work anymore because it’s only on a trickle. As soon as you stop working it remembers where all the money is. Magic
Economists like to pretend that currency is entirely rational, real, finite, and concrete, but it’s really not. That fiction only holds together as long as the bulk of people are willing to believe it.
Besides, these laws would never be two lines long like are written here. They would have addenda and provisions and such, preventing businesses from discriminating against employees based upon commute length, giving an upper limit, preventing a decrease in compensation to accommodate the commute benefit, and so forth.
And in the end would it turn out to be less than worthwhile? Maybe. But current remuneration in Western culture emphatically isn’t working. We need either one big change or lots of little changes, and this would fall in the latter category.