> but it might also create downwards pressure as management were more reluctant to give anybody a raise given that it might cause other employees to demand one

> but it might also create downwards pressure as management were more reluctant to give anybody a raise given that it might cause other employees to demand one too Maybe. Unless, of course, management's income is absurdly high compared to that of their hires and then the hires decide to unionize in retaliation leading to again upward pressure. And if management's income isn't absurdly higher, then there's no real problem with the scenario because now everyone's being compensated fairly.