Saving Capitalism: For the Many, Not the Few

In Chapter 10, Reich tackles the meritocratic myth, or the notion that people are paid what they are worth. He asserts that this notion is so ubiquitous that low-paid workers believe this to be their own fault. Reich shows that in the 1950s, more than 30% of America’s private-sector workforce was unionized, which gave blue-collar workers the bargaining power to earn decent wages, but the power of trade unions has declined dramatically. The same belief that low-paid workers earn what they are worth leads to the belief that those who earn vast sums are rewarded for their superiority. This belief in meritocracy fails to take into account factors such as inheritances, personal connections, discrimination, nepotism, luck, and simply being a member of a productive social system.

Because of how power has been allocated and utilized within the productive social system, work that benefits society the most is often financially rewarded the least. Reich argues that the work/worth myth ignores the “legal and political institutions defining the market” and that unwillingness to create change is caused by the myth of the free market (94). This is the reason that the idea of raising the minimum wage is repeatedly met with strong opposition by the powerful in society—i.