In 1966, economists William Baumol and William Bowen proposed that while technological innovation drives productivity growth in manufacturing, sectors like the performing arts remain labor-intensive and resistant to such efficiencies. A string quartet still requires four musicians playing for the same duration as it did in the nineteenth century. Consequently, because performing arts organizations must increase salaries to compete for talent with higher-productivity industries despite experiencing no corresponding productivity gains, their operating costs rise disproportionately. Rather than reflecting mismanagement or declining audiences, this "cost disease" is an inevitable structural feature of service industries where human labor is the end product itself.
Which choice best states the main idea of the text?
- AService-oriented industries are generally less efficient and more poorly managed than manufacturing industries in modern economies.
- The rising expenses of performing arts organizations are a structural inevitability caused by the need to raise salaries in a labor-intensive sector that cannot easily increase its productivity.Cevap
- CPerforming arts organizations are suffering from rising costs primarily because interest in classical music has declined since the nineteenth century.
- DTechnological innovation will eventually allow performing arts organizations to reduce their dependence on human musicians and stabilize their operating budgets.