I think you are right about the market effects, but wrong about the causes. The way I see it, it's not that the employees are willing to make the sacrifice per se, it's that there are just more job applicants total. If the supply is increased, the price will drop. It's not that people want to work for a lower wage and then make up for it in the quality of the work, it's that since the population is broader, you find more people willing to work for a lower wage. You get the less frequent edges of the Gaussian curves because you have more people. You see this in zoos, hospitals, elder care, etc.

It's not a question of society being backwards, it's just a function of market based jobs. The cause is amoral and independent of the wishes of the people in the system, though the effects very much have moral relevance.