Re-post: Does the market pay you what you’re worth? (with Marshall Steinbaum and Saru Jayaraman)

Pitchfork Economics with Nick Hanauer

Civic Ventures

Business, Government, News, Politics

4.8 • 1.5K Ratings

🗓️ 16 February 2021

⏱️ 51 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

The theory of marginal product of labor says that every worker is paid exactly what they’re worth—the value that their labor generates. Employers cite marginal productivity to legitimize paying the lowest wages possible, but that’s just another trickle-down scam. Economist Marshall Steinbaum and food labor expert Saru Jayaraman expose the lie of marginal productivity, and show how it’s been used to exploit workers for centuries. Marshall Steinbaum is an Assistant Professor of Economics at the University of Utah and a Senior Fellow of Higher Education Finance at the Jain Family Institute. He studies market power in labor markets and its policy implications. Twitter: @Econ_Marshall Saru Jayaraman is President of One Fair Wage and Director of the Food Labor Research Center at UC Berkeley. Twitter: @SaruJayaraman No, Productivity Does Not Explain Income: https://evonomics.com/no-productivity-does-not-explain-income/ ROC United Diners’ Guide App: https://rocunited.org/diners-guide/ Saru Jayaraman: How Restaurant Workers Are Inheriting a Legacy of Slavery in the U.S.: https://bioneers.org/saru-jayaraman-restaurant-workers-inheriting-legacy-slavery-u-s-ztvz1712/ Evidence and Analysis of Monopsony Power, Including But Not Limited To, In Labor Markets: https://www.ftc.gov/system/files/documents/public_comments/2018/08/ftc-2018-0054-d-0006-151013.pdf Antitrust and Labor Market Power: https://econfip.org/wp-content/uploads/2019/05/Antitrust-and-Labor-Market-Power.pdf Why Are Economists Giving Piketty the Cold Shoulder? http://bostonreview.net/class-inequality/marshall-steinbaum-why-are-economists-giving-piketty-cold-shoulder Show us some love by leaving a rating or a review! RateThisPodcast.com/pitchforkeconomics Website: http://pitchforkeconomics.com/ Twitter: @PitchforkEcon Instagram: @pitchforkeconomics Nick’s twitter: @NickHanauer

Transcript

Click on a timestamp to play from that location

0:00.0	Hey, pitchfork listeners, we've been talking a lot about minimum wage on the podcast recently,
0:06.1	because of course minimum wage is in the news. And so we thought this week we would re-broadcast
0:12.4	an earlier episode, which gets at the core essence of the issue, which is, do employers actually
0:20.8	pay you what you're worth? The classical theory says, yes, reality seems to say no. So in case you
0:29.1	missed this old episode, listen in, learn and enjoy. The way to make workers work more is to give
0:37.1	them greater skills, get more higher education degrees. That whole sort of genre of argument
0:41.6	is premised on a certain assumption about how the labor market works, that workers will pay
0:45.5	with their worth and that assumption is false. I'm an electrician by trade. I make $18 an hour
0:50.6	about the exact same as my uncle who did this back in the 80s. If it's not marginal product that
0:56.8	determines how much you make, what is it? It's power. From the offices of civic ventures in downtown
1:09.2	Seattle, this is pitchfork economics with Nikhan Hour, where we explore everything you wish
1:15.3	you'd learn in Econ 101. I'm Nikhan Hour, founder of civic ventures. I'm David Goldstein.
1:26.8	Senior Fellow at Civic Ventures. So, Nik, before I started working for you, I worked for the
1:34.8	stranger in Alt Weekly, where I wrote like 3, 4, 5 blog posts a day plus head. I don't know,
1:41.8	600, 2,000 words do in the paper that week and I got paid very little money and then I came to
1:48.8	work for you and you're paying me so much more than I made at the stranger. So as I understand Econ 101,
1:56.3	I'm a lot more productive now with you, right? My marginal product is so much higher to justify
2:02.8	this higher wage. Yeah. Yeah, the super sad part is you're probably about a third as productive
2:11.0	anywhere in three times as much. Quality versus quantity. Yeah, I don't know what happened.
2:19.4	Yeah, that little story is a marvelous illustration of why the principle of marginal productivity is such a lie.
2:29.9	The theory of marginal product says that essentially that you are paid what you were worth. That's right,
2:36.2	because markets are perfectly efficient and allocate resources perfectly efficiently. The amount
	...

Please login to see the full transcript.

Previous episode | Next episode

Disclaimer: The podcast and artwork embedded on this page are from Civic Ventures, and are the property of its owner and not affiliated with or endorsed by Tapesearch.

Generated transcripts are the property of Civic Ventures and are distributed freely under the Fair Use doctrine. Transcripts generated by Tapesearch are not guaranteed to be accurate.