It really doesn't. An employee brings their employer some amount of value. The exact amount of value is completely unrelated to that employee's salary at their previous jobs.
The _only_ "risk" here is that the employer might not be able to lowball the candidate as much as they possibly could.
> The exact amount of value is completely unrelated to that employee's salary at their previous jobs.
Just try hiring a minimum wage worker as CEO for your next company, and see how well that works out.
Is it really? If someone's bouncing between jobs, doing a terrible job at each of them, why would their salary history be likely to reflect it? A given company might fire them, but lowering someone's pay to indicate poor performance is not common.
> Just try hiring a minimum wage worker as CEO for your next company, and see how well that works out.
That has nothing to do with what they were paid and everything to do with their experience. No one's discussing not talking about experience.
As for me, I've gone to the boss and said my work XXX was valuable to the company, so I want a raise, and I'd get it. If I hadn't done XXX would I have gotten the raise? Of course not.
(Of course, government and union jobs are different, where your pay is based on seniority, your degree, and job category.)
I also don't see why, if an employer demands a pay history, the candidate is obliged to provide it.
(And also, in my experience, nearly all candidates inflate their salary history by about 10%. Employers know this, and discount the salary history by 10%. Back when I applied for jobs, I provided a pay stub along with the comment that I wasn't lying about my salary.)
Not having a clue about what a candidate formerly earned means risk for the employer, and risk always means that the offer will be lower to account for the risk.