[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.