Another part of the issue, as I can see it, is that paying your workers better is a prisoners dilemma:

If nobody pays their workers well: All companies suffer from a disaffected, burnt out workforce that is unable to consistently perform at the best of their ability. As well as many industries suffering from the fact that their products are non-essential. If you're paycheck to paycheck, barely scraping by rent, you're not going to bother buying a new board game, pick up a book, get the latest and greatest console, or its overpriced games.

If some pay their workers well, and others don't, the companies that do will be at a disadvantage financially against their competitors. A healthier and happier employee almost certainly directly results in higher profits, but not to an extent that matches or outpaces the increase in wages required to reach that point.

If all of them pay their workers well, workers become less financially stressed. They do their job better, because they are healthier, less exhausted, etc. This also results in the exact opposite of the first case above: People have more money, they can spend more, you make more profit from people spending more across the board.

This is part of the reason that minimum wage laws are actually really important, and why the fact they have stagnated for so long is such an issue. It breaks the prisoners dilemma game by mandating that everyone together makes the group-optimal decision over the individual-optimal one.

Or, you know, we could also try UBI! Or help free up discretionary spending power by nationalizing the most essential goods and services (targeting the ones that are the least elastic). It's not like we aren't lacking in options that would work to alleviate the issue here.

Only if there are plenty of workers for all time. The economy isn't in great shape now (We sometimes call this recession but recession has a weird definition that we might not meet even though it looks like one when you wave hands), so there are plenty of workers and in turns you can get by with paying less because someone who needs money will accept something with a lower standard of living - at least they are living.

However the economy has always moved in cycles. When things are going well again there will be more jobs than workers and if you want to get employees to take advantage of the money coming in you will be forced to pay more - even just to retain the workers you have you will be forced to pay more.

Thus this is not prisoner's delemma. The situation over time is far too complex for that simple analysis.

I think the larger issue is the delayed ROI.

You pay workers well and retain institutional knowledge it helps you 5+ years down the road. Who in 5+ years is going to run a study that shows retaining the people that created a system made it easier to maintain that system?

Like think about Jack Welch who ran GE into the ground but keep the stock afloat through financial craftsmanship. He spawns a ton of copy-cats because despite making poor decisions he was visibly successful for a long time.

It's not like the NFL where if you decide to fire all your receivers and play the running game you'll immediately start losing next week.