[muzani]

This is the answer here.

Market rate isn't what the average person is being paid. It's the amount that both parties accept.

Pay = (cost of change) + (value of work)

For new hires, the cost is high (interviews, effort) so the pay needs to be high. For long time employees, the cost of staying is negative (friends, familiar/working code, devil you know) and the cost of moving is positive, and this gap increases with tenure.