Imagine that your new employer knows your past salary. They can offer you 10% above it and this might be sufficient in enough cases. However, if they don't know it, they will be in the fog of war and they will have to guess much more and be ready for a wider salary range. In such scenarios the new offer might not be 10% but something like 30%. Now, imagine the accumulated effect over 2-3 employers over time.
I've had pretty good success being completely honest about my salary requirements. A 10% raise just won't cut for me, because I care about my team. The only way I'm willing to leave is for a <your_number_here>% raise, and comparable benefits.
Edit: I'm probably biased, because I've been shown a lot of love the past few years by my current employer, in the form of money.
Those were example numbers. The key part is the asimetric information: the new company knows your rock bottom, while you have no way to know their upper limit.
Yeah, I get it, and you're not wrong - you'll probably end up with a higher salary operating that way. It's just not for me. I've already reached my "good enough" salary (the hard way), and at this point I'm more focused on what I can give back.
Statistically, with this setup, companies will constantly underpay. Yes, there will be some outliers being overpaid or those happy with their salary, but most will be in fact underpaid.
