Pitchfork Economics with Nick Hanauer Back to Basics Series: Does the Market Really Pay You What You’re Worth? (with Marshall Steinbaum and Saru Jayaraman)
8 snips
Aug 12, 2025 
Marshall Steinbaum, an economist from the University of Utah, and Saru Jayaraman, a leading advocate for restaurant workers, challenge the myth that markets fairly pay workers. They argue that wage disparities are not based on worth but are influenced by policy choices and power dynamics. Steinbaum critiques the marginal productivity theory, showing its misuse to justify wage stagnation, while Jayaraman highlights the struggles of low-paid restaurant workers and the negative effects of tipping. Together, they advocate for systemic changes to ensure fair compensation for all.
AI Snips
Chapters
Books
Transcript
Episode notes
Marginal Productivity Is A Myth
- Marginal productivity theory claims markets pay workers exactly what they produce.
- Marshall Steinbaum and Nick Hanauer show the claim is false and shields elite power.
Minimum Wage Evidence Contradicts Theory
- Marshall Steinbaum cites experiments showing higher minimum wages do not cause job losses.
- That empirical falsification undermines marginal productivity's disemployment claim.
Tipping Originated As Wage Replacement
- Saru Jayaraman shows tipping in the U.S. was used to let employers pay newly freed slaves nothing.
- The subminimum tipped wage thus has roots in slavery and persists legally today.
