Keeping an employee out of the market for even a year is extremely detrimental to that employee's career. Skills atrophy and domain-specific knowledge fades. And past income is not an indicator of actual value or future income.
The idea of simply limiting it to "competitors" is difficult to determine, since it's easy for any company to call anyone a competitor. It would simply allow contracts to exist that would be cost prohibitive for employees to challenge.
If a business wants to prevent high turnover and on-going poaching, then it should be the one bumping up pay to 150% of the previous year, otherwise they're paying below market wages for their industry.
I mean I think that people will survive. I would think with 150% pay one should be able to stay up to date, and I think that the non-compete would be a reasonable explanation for the gap. If you offered for friends 150% of their pay to not work for a year, how many would say yes? Go get a master's degree, travel the world, write OSS, etc. I bet 90%+.
I don't even think that you'd have to limit it to competitors in this case either - it could be a blanket "we have the option to bench you for up to a year" clause. I think that if non-competes were paid at a multiple like this, companies would think very hard before enforcing them, and it would work out to the employee's advantage.
The idea of simply limiting it to "competitors" is difficult to determine, since it's easy for any company to call anyone a competitor. It would simply allow contracts to exist that would be cost prohibitive for employees to challenge.
If a business wants to prevent high turnover and on-going poaching, then it should be the one bumping up pay to 150% of the previous year, otherwise they're paying below market wages for their industry.