The Silicon Jungle by David H. Rothman

Excluding minor administrative expenses, the telecommuters’ services cost the firm $47.40 a day on the average, minus whatever profit the company may make off the terminals it rents to the workers. Let’s say the final expense is $45. By contrast, the regular workers cost at least $50.52 a day if you include vacation, fringe benefits, and the $5.30 that the firm pays for a terminal lease. Missing, however, are the expenses of office space. Also, the company’s getting slightly more work from the telecommuters with only about 12 percent as many errors! Could an antitelecommuting backlash develop as workers catch on to the economics? Already the American Federation of Labor and Congress of Industrial Organizations and the Services Employees International Union have proposed the outlawing of computer homework. Given the political climate of the mid-1980s, that seemed unlikely. This could change, however. Gil Gordon, an ex-Johnson and Johnson personnel man turned telecommuting consultant, correctly warns against using telecommuting to bargain down workers’ pay or bust up organizing drives. “There’s nothing new about shift work, piecework, which is what pay per line of information is,” says Karen Nussbaum, president of 9 to 5, the National Association of Working Women. “Or pay by keystroke homework. That’s a step back into the Middle Ages, if you ask me, and into the cottage industries.”[62] Footnote 62: The Nussbaum quotes are from “9 to 5 President Raps Office Automation, Says It Deskills, Devalues Office Jobs,” _Computerworld_, May 3, 1982, p. 53. A difference exists, after all, between creative jobs, like Hewes’s, and those that, in any setting, will be drudge work. The question is Where will the typing, the data entry, the other labor, be more palatable—home or normal office? And ideally that’s a worker-by-worker, company-by-company, decision. Perhaps some workers will eventually strike for the _right_ to telecommute. In fact, Glenn E. Watts, president of the Communications Workers of America, while frowning on electronic scabbing, once said that telecommuters might even plug into union gatherings. Union opposition to telecommuting could very well change. The big variable is whether companies will follow Gil Gordon’s wise advice not to use telecommuting as a union-busting ploy. Of course, presently, home work isn’t for all. Today a telecommuter can’t make steel, cars, or refrigerators by remote control. He or she can’t cook a Big Mac, sweep a floor, run a supermarket checkout, or load a truck; for telecommuting is now strictly the province of white-collar workers and professionals. Indeed, companies in predominantly blue-collar fields may decide that certain office jobs just defy wiring in. Suppose an auto worker suffers a series of late paychecks. Will a payroll clerk sitting in a comfortable suburban home be as responsive as he might be dealing with the man face-to-face? Even in basically white-collar fields, some bosses and employers may look askance at universal telecommuting. Some, for instance, may miss the hints of body language, the blink of an eye, the tapping feet, the little, subtle signs that many people feel to “read” friend and foe. Others simply miss _seeing_ people hard at work. A Seattle hospital administrator, a telecommuter supervising two others working at home, says: “It ultimately comes down to an honor system.”[63] Footnote 63: The Seattle example is from _Business Week_, May 3, 1982, p. 66. So if you don’t trust your underlings and can’t objectively measure their output, you’d better keep your workers at the office and watch for eye blinks. Not that every employee will want to telecommute, anyway. Management Recruiters International, Inc. asked six thousand people if they’d be willing to telecommute several days a week. Only 36 percent said they would. That’s still an impressive percentage, and it will grow as more people appreciate telecommuting’s virtues and it becomes more socially acceptable, but there’ll always be skeptics like Jack Smith.[64] Footnote 64: _USA Today_, March 28, 1984, p. 3B, reported Management Recruiters’ telecommuting survey. He’s a columnist with the _Los Angeles Times_, which once freed him of his commute. After six weeks, however, his granddaughter broke his typewriter, and he temporarily returned to the newspaper, where he rediscovered the joys of face-to-face contact and decided to remain. His columns perked up. He had missed “the friendly faces, fresh in the morning; the clothes; the gossip; the flirtations; the benign conspiracies; lunch-hour expeditions; the open forums on war and peace, Reaganomics, and the Rams quarterback controversy, none of which could be examined with such reckless spontaneity by anything canned for consumption on your home computer.” “He realized that he really came back to the office not just to write but to renew his interaction with human life,” says William Renfro, a Washington consultant.[65] Footnote 65: William Renfro’s comments appeared in _The Futurist_, June 1982. Then again, Maxine Messinger, a gossip columnist with the Houston _Chronicle_, writes happily on a computer at home and brags that she hasn’t been to the office in years. “For a long time it’s been far more efficient for me to work at home,” says another confirmed telecommuter, Hollis Vail, a part-time management consultant with the U.S. Geological Survey. “I use my computer for writing, reports, and sending reports and messages,” he says, “and I can get all the data I want from the system.” The U.S. Geological Survey has thousands of people using electronic mail, and Vail can even hold conferences over the wire and record the results on his computer disks. Then he can sum them up. In fact, he can electronically cut and paste to produce policy documents reflecting many viewpoints. David Snyder, now a professional futurist and consultant, fondly remembers the computerized conferences of his days as an Internal Revenue Service official. “I wrote a book with eight other people,” he says, “and we didn’t meet until it was written. It was a much better product because we could work that way. The travel would have been too expensive. And the mails would have been too much of a delay.” The coauthors left their contributions in each other’s electronic mailboxes for perusal and change. Back then Snyder was on a government computer, but later he hooked up an Apple in his Maryland home; he was planning to connect with aunts, uncles, and other members of his extended family, nationwide, who, together, do consulting and produce films. “You can’t have a mom-and-pop steel mill,” he said. “You can have a mom-and-pop information factory.” Rank Xerox, the office equipment giant’s joint venture in England, is helping to pave the way for Mom and Pop. It’s letting managers and other professionals telecommute. They’re no longer salaried, and they give up pensions and perks like company cars; but the “networkers,” as they’re called, normally sign two-year contracts guaranteeing them work at least two days a week. Business with other companies may take up the remaining days. In a sense the Rank Xerox program could be a large corporation’s version of the hundred-hour-a-month arrangement that Jeremy Hewes worked out with the computer magazine. “Clearly,” says Derek Hornby, staff support director and a member of the Rank Xerox policy committee, “we need and will always have a ‘core’ staff within the head office for day-to-day management. Many functions, however, can be fulfilled by networkers.”[66] Footnote 66: The Xerox example comes from correspondence, interviews, and the _Financial Times_, London, July 20, 1982. Computer work, pension advising, management training, even putting out the company newsletter, are some of the tasks with which the networkers may help core staffers. Who qualifies for the program? Someone the company wants to keep but whose services it needs only part time. The first networker, Roger Walker, a former personnel manager in his late thirties, helped cut costs in the most direct way, eliminating his job. He was planning, anyway, to venture out on his own. But the Rank Xerox program eased the transition. “What do you answer,” I asked the company, “when people say, ‘Isn’t this really just an outplacement scheme?’” “The rough cost of someone going networking,” said Phil Judkins, a Rank Xerox spokesman in London, “is approximately three times the cost of their compensation if they were simply declared redundant by Rank Xerox.” More than a year into the program, how were the volunteers doing? “Extremely well,” said Judkins—all of them. He said two networkers seemed “well on the way to one-million-dollar turnover companies.” And Rank Xerox, needless to say, didn’t supply all that business. Along the way the corporation was benefiting from the useful business contacts that the new entrepreneurs were making outside the company. Sensibly, it discounted its model 820 microcomputer for the networkers. They could not only do their normal work but help show off a company product. Runaway expenses, though, especially rent, were the real spur behind the experiment. The rent on Rank Xerox’s international headquarters, in London, had doubled in just two years. Small wonder, then, that Rank Xerox wanted to trim every speck of gristle from its headquarters budget. And by late 1983 the knife seemed to be slicing well. The forty-three networkers were helping Rank Xerox save a third of a million dollars a year in office space. Judkins said: “We have rid our books of this sterile expense.” In the United States, Mike Bell, Xerox real estate executive, is busy toting up the advantages of another form of telecommuting—moving some corporate operations out of expensive downtown areas. “Why should a company have row after row of workers taking up desk space in back rooms in large cities,” he says, “when it could modernize its office machinery and farm them out to offices in the suburbs? An average office worker and his desk take up 200 square feet at $20 a foot in big cities. That’s $4,000 a year just for rent. Suppose you could move him to a suburb with rent at $12 a square foot. Then rent would be only $2,400 a year.” If the employee was in a suburban office tied in to headquarters via a computer-telephone hook-up, you might save as much as $3,000 over five years—even if you counted expenses like equipment costs.[67] Footnote 67: Thanks to Mike Bell for helping me obtain figures comparing telecommuting costs to alternatives. And the editor has simplified the numbers presented. And you might save $8,200 per employee over a five year period if the workers were at home. The chart below assumes that (1) each employee takes up 200 square feet, including corridor, aisle, and file space, (2) the downtown rent is $20 a square foot, which is perhaps half of some Manhattan rents, (3) the suburban rent is $12 a square foot, (4) you pay home workers $4 a square foot in rent, (5) your investment in equipment for each telecommuter is $4,000, (6) the effective tax rate is 35 percent, (7) you’ll receive a tax credit of ten percent of the computer gear’s initial cost and (8) depreciation is straight line over five years. Yes, $4,000 is more than the computers might each cost; the inflated figure helps fudge for miscellaneous expenses like moving expenses and phone bills. As for tax laws, they can change. But the credit—as distinguished from depreciation—accounts for only a tiny fraction of the money you’re saving. One last point: the chart below doesn’t consider interest on what you’d be saving in rent. Large companies, of course, could mix different forms of telecommuting and employment arrangements. They might even let some workers shift back and forth. Some employees, some of the time, anyway, would work at home, while others might be at companies’ regional or neighborhood telecommuting centers of one kind or another. Jack Nilles’s kind of neighborhood center—at least one of the kinds he’s proposed—would be organized by corporate function. One center would bring all the accountants together, for instance, ─────────────────────────────────────────────────────────────────── A COMPARISON OF OFFICE EXPENSES PER WORKER ─────────────────────────────────────────────────────────────────── CASE 1: DOWNTOWN OFFICE _Years_ _0_ _1_ _2_ _3_ _4_ _5_ _Total_ ─────────────────────────────────────────────────────────────────── Rent 0 4,000 4,000 4,000 4,000 4,000 20,000 Tax Reduction at 0 -1,400 -1,400 -1,400 -1,400 -1,400 -7,000 35% Rate Total Expenses 0 2,600 2,600 2,600 2,600 2,600 =13,000= CASE 2: SUBURBAN OFFICE _Years_ _0_ _1_ _2_ _3_ _4_ _5_ _Total_ ─────────────────────────────────────────────────────────────────── Rent 0 2,400 2,400 2,400 2,400 2,400 12,000 Tax Reduction at 0 -840 -840 -840 -840 -840 -4,200 35% Rate Investment 4,000 0 0 0 0 0 4,000 Tax Credit -400 0 0 0 0 0 -400 Depreciation 0 -280 -280 -280 -280 -280 -1,400 Credit Total Expenses 3,600 1,280 1,280 1,280 1,280 1,280 =10,000= CASE 3: HOME OFFICE _Years_ _0_ _1_ _2_ _3_ _4_ _5_ _Total_ ─────────────────────────────────────────────────────────────────── Rent 0 800 800 800 800 800 4,000 Tax Reduction at 0 -280 -280 -280 -280 -280 -1,400 35% Rate Investment 4,000 0 0 0 0 0 4,000 Tax Credit -400 0 0 0 0 0 -400 Depreciation 0 -280 -280 -280 -280 -280 -1,400 Credit Total Expenses 3,600 240 240 240 240 240 =4,800= ─────────────────────────────────────────────────────────────────── and another would house a company’s public relations department. This idea does have the important advantage of, say, letting accountants pore over their electronic ledgers in each other’s company. Yet what about the unlucky ones who lived in suburbs across town?[68] Footnote 68: Nilles may have been the first to envision neighborhood centers for telecommuters. They would prefer, presumably, the kind of center propounded by Richard C. Harkness, a former professor at the University of Washington who later joined Satellite Business Systems. Under the Harkness plan, an employee would go to the center closest to his home. “He might even walk there,” Harkness says. According to him, a large company might have as many neighborhood centers as elementary schools—leasing offices for individual workers or small groups. Imagine a professional building with a real estate agency next to a stockbroker, a doctor across the hall from a commodities trader. Well, that’s how it would be in a building housing neighborhood centers, except a sign outside a suite might say “General Motors” rather than “Dr. Pearlman.” Of course a company might instead have fewer centers and lease whole floors. Stepping off the elevator, you’d see the foot-high letters reminding you you were in GM territory. Workers would benefit from the companionship of perhaps several dozen colleagues, quick access to secretarial and copying services, and similar support. “My way is more radical than locating people by jobs,” says Harkness, “since an accountant could be in one place and his boss in another.” Computer networks would maintain entire organizations; a whole new branch of management science would develop to hone procedures to manage telecommuters. Perhaps the day will come when IBM will endow Harvard Business School with a telecommuting chair. A third form of neighborhood center would be a munytel, as I’ll call it—a municipally or privately run center with terminals capable of linking up with many companies’ equipment. Individual employees, not companies, might rent munytel offices. Munytels would not bolster employees’ corporate loyalties; but some companies wouldn’t care, favoring other ways.[69] Footnote 69: The 1977 Stanford study discusses the neighborhood-center concept in depth and describes a number of possibilities, many of them overlapping with my “munytel” idea. The term “munytel” is mine. Munytels, moreover, could be ideal for free-lance telecommuters who valued a clear line between home and office. Workers would be at these neighborhood centers all the time or whenever they preferred and space was available. Fed up temporarily with toiling alongside a sullen spouse at home? Then you’d flee to a munytel, unless your free-lance work involved confidential company information; in which case you might drive to a GM or Prudential suite with a spare terminal. Neighbors with similar or complementary skills might gather at munytels and pool resources to seek contracts from large companies. Why not use computerized lists to bring together people in the first place? “Neighborhood work centers could themselves become employers, selling clerical or professional services to other organizations,” said one of the consultants working with Harkness on a landmark telecommuting study for the Stanford Research Institute in the late 1970s. Munytels, in addition, could be drop-off points for messengers from corporations’ headquarters. They would deliver printed material—books, for instance—that companies couldn’t flash across the screens of telecommuters at home and munytels. Also, and perhaps just as important, munytels could serve as informal neighborhood clubs. They could offer food and drink and a chance to mix electronically transmitted gossip with the face-to-face kind. “Meet me,” a stock suggestion might go, “at the munytel.” Moreover, for telecommuters unable to handle their children and jobs simultaneously, the munytels might provide child care. And in poor neighborhoods, the munytels could combine work facilities with training. The prefiasco Continental Illinois Bank in Chicago, despite its bad luck with “problem loans,” did some enlightened work in this field. It experimented with a word-processing center twenty-five miles away at a community college. The bank used it for both training and actual bank work, a logical combination; the students have learned on equipment similar to what they would use on the job, not simply the obsolete machinery that many schools must skimp along with. Corporations, encouraged by tax breaks or government subsidies, might together establish munytels in poorer neighborhoods.[70] They would provide the businesslike surroundings that some workers might prefer over home offices in slums or public housing projects. Footnote 70: Elizabeth Carlson of Continental Illinois said the community college had ended the experiment after buying its own equipment. But the bank feels the arrangement was successful. In fact, it set up a satellite word-processing center in a shopping center near the college. Munytels would be _one_ response to some thoughtful criticisms of telecommuting made by Janice C. Blood, 9 to 5’s information director. “If you’re a secretary earning $11,000 a year,” she says, “will your employer build you an addition for your computer room? Even a small Apple wouldn’t be too attractive an addition to my living room.” Blood is also worried about the cost of the equipment itself, asking, “Should someone get a cut in salary just because her boss gets [her] a new typewriter?” More likely, however, clerical workers instead would receive _some_ more money for turning out a lot more work. Whatever the case, munytels could be a solution to the equipment issue—in addition to the obvious one of company-supplied computers in various cases. But workers should still be free to use their own terminals. Remember Hollis Vail’s preference for _his_ printer? He’s right. I could never stomach working all day on, say, one of the older Apple IIs, which some companies may still use as their universal microcomputer. My Kaypro’s keyboard has a silkier feel. The screen is more viewable than many Apple monitors, and I’m a confirmed WordStar addict. Even if voice commands become the norm, I may well be among the last of the keyboard diehards. And yet, were I telecommuting, it wouldn’t matter. A corporate computer would care about the right series and speeds of bytes, not how they originated. So I might be able to keep using my electronic equivalent of a buggy whip. Just about anybody, moreover, will be able to afford a _useful_ small computer before the end of the century—because sooner or later one will be cheaper than today’s typical TV sets. Flat screens and keyboards will sell for a pittance as mass production and robotics drive down costs. So much for that one of Blood’s arguments. As for her fear of an Apple system cluttering up her living room—well, the home computer of tomorrow will probably be smaller and better looking. Or it’ll be part of your TV. If not? You may hide your equipment in a handsome, wooden cabinet that will convert to a genuinely ergonomic table of adjustable height. No, I don’t know of a product like that now. But already stores in trendy Yuppie areas are springing up with names like “Computer Support,” and some of their offerings may be as fit for your living room as for your office. Less easily answered, however, is Blood’s worry of “a Mae West employment profile”—broad at the top, narrow at the middle, wide at the bottom. That is, there might be lush job opportunities near the top around the equivalent of Mae’s bust. A few senior managers could electronically monitor the masses toiling at home—could count and time their keystrokes. But between the top people and the ones entering the data, companies would need many fewer run-of-the-mill supervisors. And that would pinch off some promotion opportunities for the clerical workers. In some ways, however, companies might make nonsupervisory work more palatable. They might, for instance, pay clerks not by individuals’ keystrokes but by those of small “telegroups,” where peer pressure would keep every member productive. Also, companies might follow the example of Volvo, the Swedish automaker, and rotate some workers’ tasks. Some numbers crunchers might swap assignments with word-processing people. Indeed, companies could pay extra for versatility. Word-processing work today is sometimes more complicated than regular typing; but that might not always be so, and corporations could relieve some of the boredom of repetitious jobs simply by letting employees exchange them. Still another legitimate worry is the distribution of the economic benefits of telecommuting. What’s to prevent employers from abuse of the piecework payment system if the government lets it become the norm? Could piecework be just a gimmick to help impersonally squeeze the last drop of blood from the clerical telecommuters? Is telecommuting a mean-spirited or enlightened response to the day-care problem? I suspect some companies _are_ mean spirited. Not all. But some. Ideally, however, this won’t deprive society of telecommuting’s benefits. Munytels, after all, could help solve the child-care problem, and changes in the labor laws could guarantee the fairness of the piecework system for all. Existing ones do cover clerks doing piecework. They must, for instance, keep time records to show they’re collecting the equivalent of the minimum wage. In a related matter, a controversy was swirling in 1984 around a 42-year-old federal ban on commercial home knitting—an issue of interest to companies considering telecommuting. Unions were fighting for the ban; the Reagan administration, for courts to overturn it.[71] Perhaps the Reaganites would want _no_ restrictions on corporate use of telecommuters, which is unfortunate considering the opportunities for electronic sweatshops, of which the sleazy will certainly want to avail themselves. Ideally, either (1) I’m wrong about the Reaganites or (2) future administrations will take a more enlightened attitude. Footnote 71: In November 1984 the Labor Department released a rule that allowed people to knit sweaters and hats at home for sale to manufacturers. Telecommuting also has energy implications—good ones. With widespread telecommuting, oil price increases would no longer be so scary if another energy crisis threatened the United States. Jack Nilles once calculated that the typical computer terminal uses less than 125 watts, and a phone line takes up no more than a watt. Then he matched those figures against a private automobile’s typical energy use during commutes, and he found that telecommuting would have a twenty-nine-to-one energy advantage. Compared to mass transit systems loaded to capacity—a rarity in most American cities—it would still enjoy two-to-one superiority. With ten million telecommuters, the country might save three-quarters of a billion gallons of gasoline a year.[72] Footnote 72: Nilles’s three-quarters of a billion estimate is reported in _InfoWorld_, April 23, 1984. “At least in the United States,” notes Richard Harkness, “commuting accounts for 35 percent of all auto and truck fuel consumption.” Much, maybe even most, of the thirty-five percent would be trips to jobs convertible to telecommuting.[73] Footnote 73: Harkness’s remarks are from his speech to the Seminar on Communications, Brasilia, Brazil, June 1982. Ticking off statistics, Harkness illustrates the profligacy of American energy consumption. “The average U.S. worker commutes about twenty miles each day. Eighty-four percent of those commutes are by automobile, 65 percent with only the driver. Two hundred and twenty million Americans consume 18 million barrels of oil per day, roughly 30 percent of the world’s supply.” He also notes the cost of America maintaining forty thousand miles of superhighways and 4 million miles of streets and roads. “It has been estimated,” says Harkness, “that 248,500 U.S. bridges need major repairs at a cost of $47 billion.” And beyond the energy and financial prices, what about the psychological ones? Even part-time telecommuters can greatly reduce the stress on their nerves and schedules, perhaps lowering medical costs for society. “An employee who drives an hour to work would save sixteen hours in commuting time each month, or the equivalent of two eight-hour workdays, by working at home two days a week,” says Frank W. Schiff, a Washington economist.[74] Footnote 74: Frank Schiff, _Washington Post_, Outlook Section, September 2, 1979, p. C1. Even battle-scarred urbanites with short commutes might relish the chance to work at home two days out of five. Skyscrapers and their occupants keep hogging downtowns, aggravating congestion and tension; and a taxi trip of just a dozen blocks in New York City can take a half an hour at lunchtime. In Houston, meanwhile, some gun-toting commuters are literally murdering each other, saying in effect: “Your right of way or your life!” Jon Verboon, a _Houston Chronicle_ reporter who has worked the police beat, told me, “It’s not uncommon for shots to be exchanged between motorists who are hacked off at each other”—sometimes over right of ways. An accident needn’t have occurred. Motorists killed more conventionally on the way to work, of course, are a hefty percentage of the fifty thousand yearly highway fatalities. But how could a telecommuter die? Electrocution? Cutting his wrists on a broken video tube? Forgetting about the rather unlikely radiation risks—which flat screens would reduce if these dangers existed—computers needn’t be lethal like cars. By converting to telecommuting, then, companies in the end might save employees’ lives as well as energy and money. Firms making the transition would do well to consider what will be in the data base into which the telecommuters would tap. The range of requirements is as wide as the range of business activities. A good data base for telecommuters, however, isn’t that different from the ones that some managers are already using by way of terminals on site. Here are the traits: