But if your wages don't keep up with CPI, you're going to lose your good employees to better-paying companies, while a disproportionate share of your applicants will be bad employees who quit or were fired from their former job (because the better ones take one look at your wages and shop elsewhere).
So I can never quit a job? Great. Good to know that if I leave this job I can never have another one. And people don't care about good vs. bad, they care about CHEAP.
That management philosophy may work at low-end jobs where the quality of the employee doesn't really matter. But any employer whose company does anything more than menial labor knows that the employees are the company, and will try to get good employees.
Tell that to my employer. We make enterprise-class CAD software. We have an installed base in the millions. There are a great number of talented programmers and designers here. My last raise was 2.5%. In a year when revenues were up 30%. I had a "meets expectations" review. The most I could have gotten for a top review was 3%. I'm calling bullshit. Again, nobody wants "good" employees, they want "ok" employees that they can work to death and then hire some other warm body to replace them.
You have a very distorted view of how to run a business if you think lowering costs (wages) is the only or even primary motivation of an employer.
For profit companies exist to .. well, make profit. You make profit by increasing revenues and decreasing costs. Payroll is a big cost. It is imperative, then, for payroll to be as low as you can possibly get away with. And if you're a publicly traded company, if your stockholders decide you're paying your people too much, you can get sued out of existence.
You'll find out pretty quickly that low wages = low performing employees, and will leave you stuck with low-end clients and low-end jobs.
So? As long as your costs are low, you can still make money off other peoples' hard work. That's the REAL American dream, get rich by fucking over your employees.
The trick isn't just to flat-out minimize cost. It's to minimize costs in ways that have the least impact on productivity - i.e. make the company more efficient to operate, not just cheaper to operate.
No, you make the company more efficient by lowering quality and making your people all do the work of three while paying them 50% below market. Since cheap is more important than good, you will have an advantage over your competitors that don't fuck over their employees quite as much as they really should. Eventually your market share gives you leverage, and you jack up your prices, make a bazillion dollars, sell your company for millions, and retire. Bonus: Most of your employees will probably be laid off, so you get one last poke before you go.