Employers are the buyers of labour. If food prices depend on what the consumer can bear, then labour prices should depend on what the employer can bear. And most of them can bear a lot more than they're currently paying.
But a professional in a small team, usually witha bus factor of 1? This means a hard time finding a new employee + months of training, while the old worker probably found a new job before they even quit at the first one.
There are plenty of blogposts from the other side, about "never give a raise to a flight-risk, because their loyalty is already shot". The business strategy is to quietly hire a (typically cheaper) replacement, then fire the uppity employee.
This depends on how happy/able the employee is to leave to find an alternative.
A while ago I was at a trade fair in Germany and happened to see an advert from a jobs website, it read (roughly translated): "Hate your job ... ? It's your own fault!" (ie that you've not yet left the job you claim to hate...)
Must be nice being wealthy. Most people can barely go a single month without a paycheck.
> severance pay or unemployment insurance
Lol. In the UK, severance pay is one week per year of service, i.e. nothing. Unemployment insurance typically covers only specific costs, like mortgages, and can be significantly expensive.
And this is quite good compared to what happens almost anywhere outside of Europe.
> Transaction costs for employer depends
For any well-established business with significant redundancy, these costs are minimal. Only small companies suffer significantly when losing an employee.
Not necessary wealthy. For people with median pay, it is more about financial responsibility. According to EU-SILC data more than half EU population has financial reserves for at lest three months.
> Lol. In the UK, severance pay is one week per year of service, i.e. nothing. Unemployment insurance typically covers only specific costs, like mortgages, and can be significantly expensive.
Here in Czechia it is 2 months notice period, then severance pay is 3 months (for > 2 years of employment), and then 5 months of government unemployment benefits on ~half pay. So 10 months to find a new job.
> For any well-established business with significant redundancy, these costs are minimal
Even in large businesses you can have small teams with domain experts, losing them can be costly.
Most corporate cultures are inherently authoritarian, with money being used as a proxy for power.
Empirically there is plenty of evidence that given a choice, many businesses would rather maintain the power differential and complain about "lack of applicants" than increase pay and suffer a corresponding diminution of authority.
Stock is an even more specific proxy for power, which is why stock options that have real value are usually reserved for those at the top of the hierarchy.
This is also why remote working is unpalatable. Even if it increases productivity it also enhances worker autonomy and reduces the power differential. That's not acceptable in an authoritarian culture.
Attitudes to remote work can be a useful indicator of how central hierarchy is in the culture.
Why does any company every pay more than the legally required minimum, then?
If you have 10 employees and you want to hire 3 more but to do that you have to increase their pay by 25% in relation to others then you might decide not to because this decreases power for everyone (should they find out what you're paying these others)
Oh come on. This is a cynical or Marxist take, but it's pretty obviously untrue. A flea market, farmers market, FB marketplace doesn't have a substantial power imbalance. A market may have a power imbalance, but it is not required. People can exchange goods/services at equal power, and routinely do so. And if I understand economics correctly, that's the purpose of a "free" market: no artificial power imbalances.
It's only later laissez-faire and neoliberal capitalists that turned "free market" synonymous with a lack of regulation and a playground for the biggest and most powerful companies.