What causes wage-rate compression? How can organizations alleviate the problem of wage-rate compression?

Some argue that increases in the minimum wage may lead to pay compression. Pay rate compression means that differences between low-and high-paying jobs decrease. It occurs when the less experienced earn as much or more than experienced employees due to high starting salaries for new employees.

What problems this can cause the organization? What causes wage-rate compression? How can organizations alleviate the problem of wage-rate compression?