Tuesday, February 18, 2014
I’m not sure whether the concept of low wages as innovation-stifler has a glaring hole in it, but it feels like it captures something fundamental. Now I’m doomed to walk around for most of the day obsessing about it, as if trying to place some actor. Wise and worldly readers, is there a flaw I’m missing?
Software for tax preparation is essentially using a computer to solve equations that are defined by answering a set of logical questions. (I think "no brainer" is the DD lingo.) It's an easier problem to solve than cleaning a hotel room by a robot. In other words, cost cannot be the only factor. Paying a CEO is much more expensive than paying an accountant, yet we don't have CEO-replacement software.
There does seem to be some logic to the argument, though. I try to teach my students in engineering design to focus on the most expensive aspects of a process when they are trying to identify efficiencies and opportunities for cost reductions. Turning off office lights in world headquarters at night will not have a significant impact on the profits or losses of GM.
So is the old option off the table? Either someone has to pay for its costs, or lower costs must come from somewhere else. Continuing to think toward a more sustainable model does make sense.
Even the labor issue is not as simple as described in that article. I know that some full-time (yet not tenured and hence adjunct) instructors are paid similarly to CC faculty but teach huge lectures so the (higher paid) t-t faculty are free to do research and teach small honors seminars or upper division classes and bring fame to the university. They are backed up by another layer of grad TA labor that actually talks to students 1-on-1.
That would be the 1986 Tax Reform Act, enacted with bipartisan support and signed by President Reagan. At the time, I was puzzled by the fact that they kept the distinction between long-term and short-term capital gains in the Tax Code--what was the point when they had the identical tax rate, the same rate as ordinary income? But it didn't take too many years before the rates diverged again. As rates on ordinary income rose, capital gain rates (long term) were first protected, then reduced to promote economic growth.
I believe that things that can be automated will be automated, eventually. Education can be far more automated than it is today. Open Courseware is a first step. Even the low pay of adjuncts is very high compared free.