Work groups that support company goals benefit from narrowing wage differences to boost cohesion and productivity. This leads to firms paying wages closer to each other, even if productivity varies. Companies paying high wages to some workers will likely pay all workers higher wages. The market doesn't fully account for the benefits of equal wages to low-wage workers, resulting in lower overall output. Increasing the number of workers in cohesive firms and raising wages for lower-paid workers can increase total output.