> Better-paid employees are less stressed, healthier, less busy at home (because they can afford domestic help)

Again, that isn’t always true. It is true when comparing $40k to $100k but less true when comparing $200k to $400k. When looking at that argument in terms of scale it is an argument of diminishing value that does not guarantee the increased individual productivity the argument would promise. The reason why that argument can suggest but not promise increased individual productivity is that increased wages alone does not directly correlate to better leadership or a more valuable team.

This may be true, if the employees are receiving high salaries under normal working conditions. But sometimes, the high pay is a result of insane work conditions. For example investment bankers, lawyers in biglaw all work crazy hours and are under an immense stress from juggling multiple projects at the same time. You sacrifice your health, family, friends for earning a high salary. The turnover at those jobs are super high and the job requires a certain amount of breaking-in.

In my experience (as someone working in Biglaw), high pay equals high stress, because the employers demand it.