Supply and demand and your explanation are both true. They are competing. Managers want it be structured like your explanation, what they actually get is struc

Supply and demand and your explanation are both true. They are competing. Managers want it be structured like your explanation, what they actually get is structured by supply and demand. Because they setting below the market rate they then struggle get anyone. If a company comes along and does not follow hierarchical setting salaries, then they will get all the better programmers. Overtime if the software is critical to their business, then they will die out. It just takes time.