[lsc]

speaking as someone who plays in that end of the pond, I don't get it. I mean, if I'm underpaying you, isn't that enough? I mean, I know that eventually you are going to get a better job; if I didn't think you were valuable, you wouldn't be working for me. Why would I want to hurry it along? or make things so unpleasant that you quit and go work retail or something?

I find that often the sort of people who are working for below market rates are used to being treated badly, which seems backwards to me. I don't know about you, but the more you pay me, the more unpleasant bullshit I am willing to put up with.

The thing is if you pay people enough to cover the bills, even if it's not "market rate" you can keep people for a while if continuing to work for you is more convenient and generally less pain than getting a better paying job, so it seems like it is in the employers interest to avoid unnecessarily antagonizing employees.

[isleyaardvark]

I'd guess it's a psychological thing. If a person is willing to work for below market rates, they've decided how much their time is worth. In other words the employer may very well look at those employees as below market quality, rather than getting a great bargain on high quality employees.

There's an old story, I think it was Buzz Aldrin was giving some sort of talk. They changed the entry price from free to $5, and more people came after the price was increased. That may be a similar situation.

[lsc]

so the employer is being irrational? how are they not punished by market forces? I mean, it seems like an opportunity for arbitrage to me.