[Jyaif]

There are a downsides to paying a lot:

* you attract/retain more people that are interested in money/status.

* the employees become entitled.

Also, just like Apple's customers are OK with paying a premium price because it's Apple, employees are OK with paying a premium price to be an employee of Apple (by accepting lower salaries).

[gnicholas]

Economists call it 'psychic income'; it's often cited as a reason why salaries for teachers are not higher.

[davidgould]

John Kenneth Galbraith called this phenomenon "convenient social virtue".