How To Make Google’s Telework Pay Payoff

One of the employees from the article lived in Stamford, CT and worked at Google’s New York office. The calculator showed that if she chose to work from home full time instead of commuting to the NYC office, her Stamford address would leave her with a 15% pay cut from what she had been earning. Further, the article alleged that if she lived in the same neighborhood as the Google office and chose to telework full-time anyway, she would continue to earn 100% of her salary with no pay cut.

I have some opinions about how silly this policy is. It kind of makes me think the last portion is not true because of how little sense it makes for a company to do this. By the same token, an employee could choose to live in a city with an even higher cost of living, like Hong Kong, telework full time, and be paid 25% more. Ludicrous. Nonsensical. 

Setting the Stage

Anyways, let’s agree to focus just on the interesting choice this Stamford-to-NYC pay comparison brings up. What I’m more interested in is an exercise of determining when this pay cut makes sense for the employee to accept. At what point does she come out ahead here? When should she make the decision to suck it up and ride the train to collect the extra pay?

There are a few key monetary factors here that I’d like to hone in on for our Googler, who by the way I’m going to name “Julie.” These factors could serve as a starting point to scope the decision further:

1. Cost of commuting—Does she take the train or drive?
2. Can she work during her commute? And importantly, if so, can she spend fewer hours in the office as a result? This question gets at the idea of her commute potentially being unpaid job-related labor (if she drives her own car and cannot work during the drive).
3. What is her salary? How do all of the above items, added together, compare to how much she’ll be losing from her salary?

SCENARIO 1

1. Cost of commuting: Julie takes the train from Stamford into NYC each work day. She pays $335 per month for the New Haven to Grand Central train. Let’s assume she pays another $127 per month for the unlimited MTA metro card for taking the bus and subway once she’s in the city to get to her office. Total Cost: $5,544/yr
2. Can she work during her commute? YES! Julie just saved herself from spending an unpaid hour each way to work everyday!
3. What is her salary? $150,000. 

Verdict: From a monetary perspective, Julie should continue to commute each day to New York from Stamford by train. Her potential 15% salary cut of $22,500 more than makes up for her annual $5,500 commuting costs. Good for her for having such a low-cost option for her commute!

SCENARIO 2

1. Cost of commuting: Julie drives her car from Stamford into NYC each work day. It’s 80 miles round-trip,includes $15 in tolls each way, and requires $20 for parking at work.* When Julie added up the cost per mile of her relatively fuel-efficient 2021 Toyota Corolla,** she found the costs of fuel, maintenance, repairs, insurance, depreciation, and personal property tax to be around $0.37 per mile. Working 5 days per week, 48 weeks out of the year, that means she drives 19,200 miles each year just for work. Plus she pays for parking and tolls. Yuck! Total Cost: $19,104/yr
2. Can she work during her commute? NO! Julie now has 2 hours per day in unpaid job-related labor. So what am I going to do here for a calculation? I’m going to grab the salary figure from item 3, below: $250,000. Let’s imagine for sake of argument that Julie works an average of 9 hours each day. With her decent vacation time each year putting her at 48 weeks of work, her hourly wage comes out to be $115/hour. However, accounting for the extra 2 hours of driving each day means she actually spends 11 hours each day on work and is only paid for 9. For all intents and purposes, this brings her hourly wage down to about $95/hr. Put another way, the opportunity cost of Julie’s 2-hour round-trip commute is a 17.4% reduction in her annual salary. That’s minus $43,500, for those keeping track at home…
3. What is her salary? $250,000.

Verdict: This one was a doozy. Poor Scenario 2 Julie… She looked at the potential drop in her salary of $37,500 for full-time work from home and thought she should keep commuting to work as a result. However, she saw the light that her choice to continue commuting was going to cost her $62,604 and thought it better to take the pay cut to telework.

SCENARIO 3

1. Cost of commuting: Julie takes the same train from Scenario 1. It’s a great, low-cost way to commute, after all! Total Cost: $5,544/yr
2. Can she work during her commute? NO! Julie gets horribly motion sick when she tries to read in a moving plane, train, or automobile. As a result, all of her commuting time is spent peacefully listening to music or podcasts. It beats the stress of driving, however she is faced with Scenario 2’s 2 hours per day of unpaid job-related labor. In this scenario, she makes a sweet $800,000 per year, though, which is good for a $231 per hour wage based on her 9 hour workday. “Working” the extra 2 hours per day of unpaid job-related commuting brings her hourly rate down 18.2% to $189 per hour. 
3. What is her salary? $800,000.

Verdict: This scenario leaves a little bit of decision wiggle room for Julie. At the end of the day, she still takes home $794,456 before taxes if she decides to commute. If she is willing to get to that amount by adding in a ton of unpaid time to her work, then so be it. Maybe she has a hard savings goal in mind that she will simply hit faster at this rate, so it’s worth the sacrifice. Personally, I would take the 15% cut in salary to never commute in this situation. It’s hard to walk away from $120,000 of potential earnings, but all the intangibles of the situation probably make it worthwhile to do so.

Get Creative, Julie!

These scenarios are based on the idea that this is an all-or-nothing proposition. I’m not privy to the details, so we might never know if that’s the case. However, perhaps Julie could work something out with her manager. Maybe she commutes by train only a few times per week and takes no reduction in salary as a result. Or perhaps Julie doesn’t mind crashing in a friend’s spare room during the week, or even sleeps at the Google offices.*** Maybe she is willing to consider the idea of moving into NYC to avoid the commute altogether.

As I stated before, this is just a starting point for Julie to make a decision. There are a myriad of other factors to consider, as well (many of which we could attempt to monetize): 

• The added stress of commuting
• Perhaps needing to buy a more professional wardrobe for in the office
• The negative impact on her potential to obtain a promotion if she teleworks full-time
• The loss of social interaction with peers if she’s not in the office
• Missing out on tons of free food and coffee at work and having to instead buy it herself for at home

All-in-all, I don’t cry for Julie. She has a lot of great opportunities and flexibilities to make her work… work for her. Thanks for running through this thought experiment with me. And who knows, maybe we helped some Google employee (or other telework-curious person) out there start to make sense of some tough decisions!

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*Take that figure with a grain of salt—it was just my imagined cost for sake of argument! There are tolls on each main route from Stamford to NYC. For those of you who have ever driven through NYC, you know this is a pretty reasonable estimate.

**Julie must be pretty smart. She chose to forego her top choice of a Mercedes after reading my post on lifestyle inflation…

***I imagine this is a thing that could work. Their offices are super fancy, after all…