> "Most senors developers can leave and get another job with a 30-40% higher pay" and that "most current developers stay because of the flexible time and casual environment" is a very strong point.

One of the worst things a developer can do is to underperform on purpose because of thoughts like the above ("I could get a better job elsewhere, so I don't need to put in any effort here"). It leads to the worst possible outcome for everyone: low pay, bad performance, dissatisfaction on both sides. If you think you deserve better pay, ask for it or go find it elsewhere. If you don't, you were just looking for excuses to slack off.

I didn't say "Work at 30-40% of their capacity". The job environment is obviously a very important factor when considering a position.. some developers preferred to have a smaller salary in exchange for a better work environment. This is what I think should be explained. Now, if a new manager comes in and remove that great environment, what in hell would you stay if you don't have the great environment AND you have lower salary than market standard?!

I completely disagree. Casual, unrushed work and lower hour weeks are absolutely a feature to hire qualified, but otherwise busy employees. Parents especially go for these sorts of roles.

He's not complaining about effort, but hours

When they say "casual atmosphere", you should think about people taking time off work to drive their kids to baseball practice. Not potheads arriving at 12PM at work.