Over the last several months, I’ve been asked to think about issues that were bigger than life sciences; issues that were slowing us down. I made a list of a dozen, but focus here on a huge friction, partly given the anniversary of a purported war. Imagine Lyndon Johnson singing “I fought poverty and poverty won” in a parody to a now well-known rock tune that was covered (before it became a hit) by Sammy Masters in 1964—the year Johnson opened the war on poverty with the State of the Union address. We created more of it while impoverishing government at the same time. Let’s take a breather from genomics and wander into economics.
Recently, there have been proposals to raise the minimum wage to $10/hour in some venues and to $15/hour in others. Some suggest this will help the economy rebound, others suggest it will stagnate job creation. If the former, why not raise it to $50/hour or more? Like magic, Social Security revenues would likewise bring that system to full solvency. If the second argument holds, why not eliminate the minimum wage altogether and watch employment soar? Businesses would compete for the very best people who would move to the best spots for their skills and maximize their income. Meanwhile, new opportunities would open up for entry level positions for students and other part-timers. One concept that receives bipartisan support and holds up the low end is the earned income tax credit (EITC) that encourages work. This approach gets work started, rewards the effort and enables individuals to grow toward paying income taxes, which we need more of us to do and soon.
Moving upstream, we have also heard that corporate income taxes in the USA are too high, making our companies less competitive in a global economy. Both political parties advocate reducing them, but they are not doing it. If reducing corporate income tax to 25 percent is a good thing, reducing them to zero is a better thing. Truth be told, only individuals pay income tax and corporations are simply tax collectors, hitting on their customers, employees and shareholders. Eliminating the tax altogether and we’d have no reason to hide corporate profits outside the USA. Our industry would have no need to beg for R&D credits. There need be no difference between a commercial bank, credit union or university. There would be no meaning to tax loss carry forwards, no dual accounting for tax and book, no lobbying of Congress for preferences, and no incentives lumped in as spice from crony capitalism. When earnings are distributed, they’d be taxed. When earnings are used to grow businesses, those beneficiaries would also be taxed. Capital would flow into the place where it is most free to get to work and bring society a return. That place should be the USA.
We also often hear that K-12 education is a problem. Much of that comes from discounting what is known to work and substituting what doesn’t work. Social promotion doesn’t work, discouraging academic competition in favor of self-esteem doesn’t work and overselling higher education as a means for avocation doesn’t work. Let’s go back and post grades as we do basketball stats. Let’s not diminish or discourage those who prefer to take a vocational/technical track. Instead, give them a hand as has long been done in Canada, Europe and Asia. We have a bubble in higher education that leaves many disappointed, in debt and underperforming. While growth in anything good is attractive at the low end, inevitably there is saturation and values drop. This is just as true for university degrees as for the corn and soybean crops. We professors have long been accused of tribalism, wanting to reproduce ourselves. Guilty as charged. If we do not start respecting the alternatives, the social welfare costs of everything from food to housing to student loans to (especially) healthcare will average down our standard of living. This is the path we are on. It is eating the resources for creative science. NIH, FDA and life-science start-ups are under resourced. It is weakening the most effective social mobility program in history, the United States military. The known cure is economic growth through effort. You can’t gift effort, you have to incentivize and reward it. You have to compete. Surrogate markers of group challenges are correlations, not causes. We know exactly what works and overrepresented minority groups demonstrate this every day. Emulate them and good things will happen.
I’ve given you four things to civilly debate at Starbucks: eliminate the minimum wage, eliminate the corporate income tax, bring academic competition back to school, and value people who can do great things without wanting to study calculus, genetics or European history. My favorite course in college was Early American Art and Architecture. I never expected to work in, or have a credential in this field, but it sure makes walking around Boston more fun. Education makes things more fun. Training and practice enables competence. As our Purdue alumnus John Wooden liked to say, “Failing to prepare is preparing to fail.” We are failing too often, often because many of us stopped trying.