labor is always the most expensive thing in every business, and when you start paying people less (even yourself), the work suffers. i have seen this firsthand at literally every company i've worked at.
i'm not smart enough to understand all the detailed reasons why, but the direct connection between pay and quality of work is super obvious when you actually inspect it. this doesn't even touch the ethics of the situation. the practical outcomes are bad enough to avoid it entirely imo.
i think the detailed reason why is that when people are paid less they start worrying. as someone who struggles to make rent each month, financial worry starts to seep into every aspect of life. it's pervasive.
