Earlier this year, a freshman member of the Minnesota Legislature was heard to remark: "When will our transit system ever become profitable?"
The answer to this question is, of course, "never" -- at least as long as transit vehicles require operators.
Why? Because public transportation suffers from "Baumol's Cost Disease."
William Baumol is a New York University economist and longtime patron of the arts. He has served on the boards of a number of performing-arts organizations in New York City.
As an economist, he was troubled to no end that none of these organizations could, as they say, "live within their means." Year after year, costs always seemed to increase faster than inflation. So Baumol dug into their books to find out why.
The answer turned out to be quite simple: It took four people to play a Mozart string quartet in 1790, during the composer's lifetime, and it still takes four people today.
In other words, there are never any labor productivity gains in the live performing arts.
If we want to hear live performances of Mozart string quartets today, we still have to pay the requisite number of skilled musicians a wage that is competitive with what they could earn plying other trades -- or no one will pursue the necessary training.