Governments are starting to catch onto to the idea that one of the most dynamic parts of the new economy is people working from home. Governor Phil Scott of Vermont just signed legislation that provides an incentive for people who want to move to Vermont and work from their homes.
The program consists of grants of up to $5,000 per year, not to exceed $10,000 to help cover the cost of relocating to the state. To qualify for the grants a worker must already be employed by an out-of-state company, work primarily from home and move to the state after January 1, 2019.
The overall program isn’t large, set at $125,000 for 2019, $250,000 for 2020 and back to $125,000 in 2022. If awards are made at the $5,000 level this would cover moving 100 new workers to the state.
In economic development terms, landing 100 new full-time families using a $500,000 tax subsidy is a bargain. Governments regularly provide tax incentives of this size to attract factories or other large employers. The impact on the economy from 100 new high-income families is gigantic and over time time the taxes and other local benefits from these new workers will greatly exceed the cost of the program.
Vermont is like many states and finds itself with an aging population while also seeing an outflow of young people seeking work in New York, Boston and other nearly cities. These grants create an opportunity for young families to move back to the state.
One key aspect of the work-at-home economy is good broadband. Many companies are now insisting that employees have an adequate broadband connection at a home before agreeing to allow a worker to work remotely. I’ve talked to a few people who recently made the transition to home work and they had to certify the speed and latency of their broadband connection.
One reason that this program can work in Vermont is there are areas of the state with fiber broadband. The City of Burlington built a citywide fiber network and local telcos and other cities in the state have built fiber in more rural parts of the state. But like most of America, Vermont still has many rural areas where broadband is poor or non-existent.
What surprises me is that many communities with fiber networks don’t take advantage of this same opportunity. It’s easy for a community with good broadband to not recognize that much of America today has lousy broadband. Communities with fiber networks should consider following Vermont’s example.
I know of one community that is doing something similar to the Vermont initiative. The City of Independence, Oregon has benefitted from a municipal fiber network since 2007, operating under the name of MINET and built jointly with the neighboring city of Monmouth. The city has a new economic development initiative that is touting their fiber network. Nearby Portland is now a hotbed for technology companies including a lot of agricultural technology research.
Independence has one major benefit over Portland and the other cities in the state – gigabit broadband. The new economic development initiative involves getting the word out directly to workers in the agricultural research sector and letting them know that those that can work at home can find a simpler and less expensive lifestyle by moving to a small town. They hope that young families will find lower housing prices and gigabit fiber to be an attractive package that will lure work-at-home families. Independence is still close enough to Portland to allow for convenient visits to the main office while offering faster broadband than can be purchased in the bigger city.
Good post, Doug!
As someone who has worked from home off and on for 20 years, this subject has been one of my bigger rants for years. Some thoughts/questions:
1. What is State of Vermont’s work from home (WFH) policy? I’d be hesitant to take the governor up on his offer if his own peeps weren’t trusting their network and boss in WFH.
2. Ditto on those rural county economic development types talking up the “lone eagle” WFH professional that will turn their rural economies around. If county and municipal employees don’t trust their jobs to the local network, then why would an outsider?
3. This is also a transportation question: some majority of urban/suburban commuters are white collar types working on a computer and phone all day for large firms with global footprints: that is, they need not smell their coworkers in order to do their jobs, yet mployers demand their bodily presence 9 to 5 just as their grandparents employers expected them at the factory for the day shift. Why?
4. Governments could take the lead on WFH as they are the ones responsible for traffic infrastructure and management. Example: City and County of Denver has about 14,000 landline phones and I will extrapolate there are about 14,000 workers at desks that might be able to WFH. While 14,000 is a very small percentage of perhaps 300,000 (total population just under 700,000) Denver residents commuting to work each day by car or public transporation, it sets a strong example for the private sector. Expand that to the 52-member Denver Regional Council of Governments (“Dr. COG”) and we might have some start on energy and aggravation savings while focusing on telecom networks as something more important than a means for binge watching Netflix.
Over to you elected officials…
I am pretty confident in saying that very few communities understand their working-from-home economy. On my street of about 60 houses about 25% have somebody who works from home, and I am positive that the City doesn’t have the slightest idea that we are here. With that said, I’m not sure how a City goes about finding this community.
That would take a significant survey and would be helpful to a rural community. One source: Social Security Administration or state revenue office. A SS# resides at a certain address and a certain employer employs them as detailed by SS# and EIN#, however, the employers nearest official location is 1,000 miles away and the big reveal is that they are paid urban wages in a rural location). Privacy questions would abound, of course, but if say, NACO or similar entity were to ask the feds or state government for that info and crunch it via third party, WFHers could be found, patterns established, local governments clued into what it is that keeps WFHers there, etc.
ISPs could do research in-house determining which subs had activity during business hours, type of traffic, etc that might indicate a WFHer. Privacy guidelines do allow for a fudging of location while still delivering a geographical pattern (Ex. a sub division sems to be active during the day (not Netflix or gaming) without detailing an actual address). This might support the ISP in determining when and where demand happens and provide infrastructure to support WFHers.
Of the 53 residents on my block, I count 2 WFHers (psychologist and a payroll business).