We’ve all heard the story: In a fair market, workers are paid exactly what they’re worth. Economists even have a name for it—marginal productivity theory. It’s neat, simple…and completely wrong.

In this Back-to-Basics episode, economist Marshall Steinbaum and labor leader Saru Jayaraman dismantle the myth that the market fairly rewards labor. Steinbaum reveals how this theory has been weaponized to excuse wage stagnation, justify corporate power, and erode worker bargaining rights. Jayaraman shows what that looks like in the real world, from restaurant workers stuck at subminimum wages to entire industries built on underpaying the people who keep them running.

They make the case that your paycheck isn’t determined by some neutral law of economics—it’s the result of choices, policies, and power dynamics that can be rewritten to ensure everyone is truly paid what they’re worth.

Marshall Steinbaum is an Associate Professor of Economics at the University of Utah and a Senior Fellow in Higher Education Finance at the Jain Family Institute.

Saru Jayaraman is an attorney, President of One Fair Wage and the Restaurant Opportunities Centers United (ROC United), and author of One Fair Wage: Ending Subminimum Pay in America.