New York Times columnist Joe Nocera went to the Aspen Ideas Festival and learned about a brilliant new strategy for the new economy. The status quo thinking of American business today is that the road to profit requires constant cost-cutting: Hire the lowest cost workers, outsource jobs to countries that pay less than American workers expect, cut, cut, cut.

We have seen the same mindset in education, where school boards bring in Teach for America and welcome teacher churn because it means young workers who won’t stay around long enough to qualify for a pension. It also means that experienced teachers are a burden instead of a treasure, because they cost “too much.”

Joe Nocera heard a radically sensible idea from a professor at MIT named Zeynep Ton. She said that instead of cutting costs to the bone, employers should “provide employees a decent living, which includes not just pay but also a sense of purpose and empowerment at work.” This strategy “can be every bit as profitable as companies that strive to keep their labor costs low by paying the minimum wage with no benefits. Maybe even more profitable. Getting there requires companies to adopt what Ton calls “human-centered operations strategies,” which she acknowledges is “neither quick nor easy.” But it’s worth it, she says, both for the companies and for the country. Surely, she’s right.

Nocera writes:

Her thesis comes out of research she did early in her academic career on supply chain management in the retail industry, focused especially on inventory management. What she and her fellow researchers discovered is that while most companies were very good at getting products from, say, China to their stores, it was a different story once the merchandise arrived. Sometimes a product stayed in the back room instead of making it to a shelf where a customer could buy it. Or it was in the wrong place. Special in-store promotions weren’t being executed a surprisingly high percentage of the time. She saw this pattern in company after company.

As she took a closer look, Ton says, she realized that the problem was that these companies viewed their employees “as a cost that they tried to minimize.” Workers were not just poorly paid, but poorly trained. They often didn’t know their schedule until the last moment. Morale was low and turnover was high. Customer service was largely nonexistent.

Yet when she asked executives at these companies why they put up with this pattern, she was told that the only way they could guarantee low prices was to operate with employees who were paid as little as possible, because labor was such a big part of their overhead. The problems that resulted were an unavoidable by-product of a low-price business model.

She sought out companies that valued employees and treated them well. They had middle-class wages, better morale, good training, and minimal turnover. Their employers wanted to keep them for a long time.

These findings reflect the work of scholars like Edward Deci, G. Edwards Deming, and Dan Ariely (summarized in Daniel Pink’s “Drive.”) People are motivated to work harder when they are given autonomy, support, and respect. Deming wrote that people want to take joy in their work, and their employers should make it possible for them to do so.

Could someone share the news with the corporate reformers in education, who love disruption and churn, and who think that motivation stems from threats and rewards. Their thinking reflects the behaviorist ideas of Frederick Winslow Taylor, now a century old. Time to enter the 21st century.