That also means that a) it's harder for younger people to get a stable job b) the bare minimum of work not to get fired decreases over time, which is bad for productivity.
If a significant share of your employees optimise in the sense of doing the least of work possible, without getting fired, you have a huge problem anyways. Usually, given the right conditions, people have intrinsic interest in doing a good job. Even if their motivation is more of the extrinsic type, there is more to it than getting paid.
I have worked a fair share of that kind of jobs in the past. The colleagues on my level who cared about more than being paid and not getting fired where the absolute majority. People want to belong. They want to work. The ones who are the exception of the rule can be seeded out pretty quickly. You do not work for an organisation for 10+ years, wake up one day and switch to pure opportunism.
As for incompetent management, that problem can not be solved by churning workers. It can only be solved by better career paths and selection processes for management roles. The most intelligent people in an organisation are often more interested in getting things done than getting more power.
Yes, it only works in a high trust society where there’s plenty of jobs and people actually care about doing a good job (any company will have incentives, people can’t just sit around and do nothing, lots of social pressure too if you’re a slacker). But hey, that’s been mostly true (until recently, I hear immigrant unemployment is really high, while “local” unemployment is close to zero, but the official statistics sit in the middle at around 7% I think, much higher for the youth).