This week’s question: “Does it make sense to give workers a special payment to offset the effect of higher gas prices?”

I advise running away from this line of thinking for several reasons:

• It’s just like the gas tax holiday plans supported by John McCain and Hillary Clinton. Both are horrible ideas. From a nationwide perspective, what does a lower price or set aside money to purchase gas do? It increases the demand for gas, which is the exact opposite of what needs to happen. We need to use less — not more — gasoline. In a free market, high prices are the best way to force less consumption.
• How far do your workers commute? If we wish to become more efficient to compete with the rest of the world, we have to copy the European model where people live very close to where they work. In the U.S., the average commuting time to work is 24 minutes each way. Fifteen states average commuting times of 20 minutes or less. Companies should think twice before hiring a person who must drive more than the national average of 24 minutes to the office — chances are they are less likely to stay with you.
• How could a company afford such a move? If it dug into reserves to pay for it, it’d just be a temporary band-aid. Once the money was spent, a company would need to shell out for another payment.

Instead, I’d suggest:

1. Paying for mass transit with pre-tax dollars. The company saves on payroll taxes, employees save money getting to work, and you both benefit as gasoline demand is reduced. Five percent of all employees used this or a similar subsidized commuting benefit in 2003.
2. Organizing internal car-pooling. HR should know where everyone lives, and they’d be able to suggest the best matches. In 2003, when gas prices were much lower, 10% of employees car-pooled to work — this number could easily rise. But you’d have to be flexible as well, which means allowing employees from different departments to keep the same hours and certainly a more flexible schedule.
3. Moving to a 4 day work week.
4. Allowing employees to work from home one or two days per week, or
5. Arranging for a company van or third party bus to pick up 6-10 employees in one run. They’d save on gas, but spend more time commuting. If you charged a small fee, employees would still come out saving money, and it wouldn’t be as onerous a cost to the company or employees.

Tags: Clinton, Commuting, Gas prices, Mass transit, Tax holiday