Cons
Individual Disadvantages
If you have ever gone through the process of making a home office deduction, you will doubtless of reached the conclusion that some of the advantages of working from home are over-rated. Much of the productivity and financial advantages of telecommuting (TC) are surrendered or lost through costs of doing business, like air-conditioning, computer tech support, heat, electricity, and space (which has a cost).
The ability for individuals to shop for employers (owner globalization) is offset by employers' ability to shop for employees (labor globalization). I think the prospects for employees to outsmart or outstrip the employers "absolute advantage" in employment is dim at best.
One of the glaring areas of problems with TC are tax problems. Double taxation is a very real circumstance for many TC workers. Oddly, this seems to happen most for states who don't have income taxes at all. States trade the right to tax income with one another in many cases, but those agreements don't apply, so if you live in a state with no direct income tax, you must still pay their indirect tax locally, plus the income tax of the state you are [virtually] working in.
It is widely accepted that social/communicative isolation plagues TC workers, who may run out of people with whom to instant message, and become something of a pariah among their office-working friends. It is also widely understood that competitive pressures mean that non-TWs are often said to be less productive than their office-bound mates. Sadly, this might be true.
Finally, scrutiny cuts both ways. In the TC environment, not only does your employer not know if you are working or not, but also you don't know who is and is not working. This can be distracting. The fact is that it is harder to work without scrutiny. Fear is an ordinarily a part of work.
Macro-economic (Employer) Disadvantages
One of the great challenges in making the transition from office work to TC, is difficulty transitioning from "management by observation" to performance-based management. It has been proven many times over that managers feel left out of communication as much as employees, and TC managers often feel unable to account for the work they are supervising. This should shed insight into the idea that "management" (as opposed to owners) may ultimately be against TC for employees, because TC employees must be more self-managing. Having worked for a number of project managers, I can easily point to the positive role that they exert over my work. Is it possible that with TC we are obsoleting the manager, as many personal secretaries were obsoleted by email and word-processors?
Regained costs and productivity from commuting are always offset by increased costs in support. If you have done any remote system administration or PC support, you will know that it is much harder to communicate over the phone or internet than in person. This dimension of concern is particularly exaggerated when security and risk management are also considered. IT departments have long "held-the-line" at the LAN walls. But in a post-TC environment, a company's most precious asset ([ahem], its data) is sure to be more vulnerable to being stolen by competitors, damaged, or misused by employees.
Benefits from the ability to for employers to shop for employees (labor globalization) is offset by employees' ability to shop for employers (owner globalization). Another way to think about this is to see that TC employers must now consider a global market to compete in. Advantages in other states and countries can and will be used against you in the post-TC global marketplace. Get ready!
The tax and financial liability administration problems posed by white collar workers, particularly W-2 bearing traditional employees are not to be underestimated. W-2 home workers can and will be seen by tax law as an "office" in another state.
Security, Environmental and Quality-of-Life Disadvantages
Comparing the so called "Carbon Footprint" of telecommuters and commuters is really a false comparison. The word "telecommuting" contains "commuting" within itself. The idea is itself part of our suburban existence, which is organized around great distances. And despite the significant impact of commuting, all the rest of our commodities and activities are also stretched over that great distance and continue to cost plenty. An even more-worrisome aspect of TC is the thought that it may drive or temp people to live even farther from work. If you have to "come in to the office" even once a month whilst living in Montana or Vermont, the carbon footprint advantages may go away.
A fairer comparison might be between the carbon footprint of cities and suburbs. With that in mind, if carbon concerns really drive change, we might do better to consider living closer together rather than farther apart.
Security concerns don't evaporate as distances get greater. In fact, a greater distance may be harder to control or monitor. First responders take longer to get to suburban locations for this reason. One rule to consider wisely is that every measure invites and inspires a counter-measure. That is why the proper use of force is such an important value. Spreading out may simply invite and inspire a different kind of attack.
While prevailing mass-cultural wisdom is that cities are dangerous and bad and that suburbs are not, disbursed populations are not a panacea. Quality of life can be defined in many ways, and many people see cultural diversity as a priviledge, and lack of it as a disadvantage.