It should be expensive! Tech companies are getting a fantastic deal on their employees right now. Apple made $460k in profit per employee in 2013[1]. This to me is a failure on our (software developers) part in capturing the value we're delivering.
If a company sold a widget that routinely generated $500k in profit per year each and leased it for $125k/year, would it make business sense to keep it at that price? Hell no! Charge as much as the market will bear. That's just supply and demand.
There's two sides here. The company making profit enables it to take more risks, try new things. The employee making a higher salary has other benefits, some of which might benefit the company, but the company itself will have to be more careful when hiring and take fewer chances both on people, products and strategy.
Imagine if Apple had to pay $300K per employee what kind of a landscape that would be. Nobody but Apple could afford to hire anyone.
It depends on how you define risk, or what angle you're looking at it from.
With lower salaries, the company can assume more risk, there's more room for failure. With higher salaries the employee becomes an increasing liability.
Just compare how hiring in France is, where terminating people is significantly more difficult, with an at-will environment like California.
If a company sold a widget that routinely generated $500k in profit per year each and leased it for $125k/year, would it make business sense to keep it at that price? Hell no! Charge as much as the market will bear. That's just supply and demand.
[1] http://nypost.com/2014/02/28/apple-has-biggest-slice-of-prof...