Because not enough people quit to make the business feel the loss in the end.

If you can underpay 10 people at the cost of losing and having to rehire 1 at a higher cost, then that might unfortunately be the more lucrative choice for the business.

Hence we unionize

Depends on the situation, but one thing I can think of is certain benefits don’t kick in until you’ve worked at the company a certain amount of time (say, a full year).

The employee may not quit.

Consider the system as a whole. If not enough underpaid people quit, you as a business might just make it out ahead.