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At face value this is obviously corrupt and nepotistic behaviour, especially if the University gets government money. But even with private institutions, it is yet another crack in form of principal-agent problem when it comes to corporate governance. In practice, this is almost nothingburger - one can point out to many other similar cases as other people already pointed out such as affirmative action or other arbitrary criteria for hiring.
What I find interesting is how this proves a lot about how the PMC class is run and that it really is matter of aesthetics. For some reason spousal hiring of two people for let's say 150k cost each is better than paying 300k to one researcher and leaving it to them to sort things out. Spouse will not be happy even with cash on hand, they need to have credentials and job history and they need to be able to suspend their disbelief in their own abilities, so they can keep their position inside PMC class tooth-and-nail. Being stay-at-home spouse is death sentence in this regard. I recently had similar discussion regarding referrals in hiring, and it really surprised me how much the rules could be bent, when literally the same happened and people even collected money for referring their own relatives. You see, it is not bad nepotism, it is result of exceptional and valuable "networking", you should thank me that I populate your local branch of large faceless corporation with my family and close friends. And if you disagree by "anonymous" complaint to HR, then maybe you mysteriously get bad reviews in next 360 and maybe your twitter will get scrutinized a little bit more. So beware.
So my opinion is that this is immoral practice that will bring problems in the future in all the forms you mentioned - including further dilution of trust and expanding polarization. But at this point this is Moloch-like problem, it is almost inevitable especially if one looks how people make excuses for it. So just go ahead and do it, you will be stupid if you won't participate.
If the person with the spouse demanded "I want extra pay so my spouse can buy a private jet and fly to the nearest big city each week where they have a job", we might complain that it's overly expensive, but few people would call it nepotism; it's just a demand for a very high salary. Paying the employee by hiring the spouse for $X above market value is no different than just paying the employee $X. Yes, of course the university could have hired a better person instead of the spouse, but in the cash scenario, it could have hired a better person for some other position using the extra cash.
It's still subject to market forces. The person who is hired for $Y and demands that a spouse be hired at $X above market value (and thus is essentially demanding $X extra pay) still has to compete against other hires who are willing to be paid less than $Y+X. In the long run, the university isn't going to do this unless the hire is actually worth $Y+X.
If the employee had any influence over the hiring process other than "I won't take the job if you don't hire my spouse", that would be nepotism.
The comparison to affirmative action is bad because hiring someone based on ideology is not the same as hiring them based on value to the university (except insofar as the value is being created by non-market forces). If there were no non-market forces demanding affirmative action and if the affirmative action was an official policy of the university, then it would be comparable, but affirmative action wouldn't be sustainable under those circumstances.
Yeah, but it's all fake anyway. The correct way to deal with academia's fakery is to end the student loan program. The rest is just window dressing. This is like, the least offensive thing about academia. In fact it's somewhat endearing.
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The university could say "We can hire your spouse, but only at a salary that is what your spouse is actually worth", but then pay the employee a higher salary, which goes into the same household budget that it would if the spouse was paid a higher salary instead. That would be equivalent, but because the origin of the cash is being shuffled around, that would suddenly become acceptable by your standard.
I'm skeptical about a standard that depends on an accounting trick.
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Oh, I am perfectly with you on this. Corruption, tribalism, nepotism and all that is very natural way of things, it even fits with what I meant around excuses driven Moloch - you exactly nailed it. So yes, if you can have advantages accrued to you by sucking out the system - be it academia or taking advantage of diffuse corporate governance structure, people will take it. I think what is new is that we may not even have to pretend to large extent, to have any kind of noblesse oblige. People will not only take advantage of the situation, they will even develop a new moral system why what they do is okay and possibly even their duty. And thus a new caste system is born with different rules for each strata of society.
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