> they hope to find someone at their $12 price point rather than just ponying up $14 (or whatever) One of the issues is that it isn't just ponying up an extra

> they hope to find someone at their $12 price point rather than just ponying up $14 (or whatever) One of the issues is that it isn't just ponying up an extra $2/hr. If a company already has, say, 10 employees at the $12/hr price point, they won't be too thrilled about a peer coming in at $14/hr. Most likely, in the short to medium term, they will have to be bumped to $14/hr, too. So rather than being an extra $2/hr, it's actually an extra $2/hr + (10 * $2/hr) = $22/hr.