I am very sympathetic to the arguments here, but an employer cannot pay "better than competitive" wages or benefits, because whatever they pay simply becomes "competitive."

Wages are always "competitive." Labor's willingness to bargain, collectively, politically, or even en masse, determines where wages go. I started law school in NYC in 1967. That very fall, one of the city's largest Wall Street firms announced that the starting pay for new associates would be raised from $9,500 to $15,000. They didn't say so, of course, but the firm was going to pay "better than competitive" wages. That, of course, was impossible: Every major firm in every major city (with regionaly variation of course - Philadelphia firms paid $13,500) followed suit. Employers should pay competitive wages; employees must find a way to make "competitive" satisfactory.