So why don't we just mandate that every airline merge into one company then? I don't get it: one master seniority list where everyone gets paid the same amount, no company competes with the other on price, and each company is forced to hire pilots from other companies before they can hire outside? And in what other "real world job" are you gaurunteed your pay if you make a move? Are you speaking of "pay comensurate with experience"? While true the airlines don't have this, this is by no means a gauruntee of any sort of compensation in other "real world jobs".
This idea basically goes completely against a "free enterprise society". In order to make something like this work, much of the rules of our country's current "business model" would have to be re-written, not to mention much government intervention. This undercutting you speak of is not just occuring in the airline industry. I was a software engineer for years, before my job was outsourced to India where someone was willing to do my job for much cheaper than I was. And we didn't even have a seniority list, management was basically allowed to axe whoever they wished which (suprise suprise) turned out to be those who had been there the longest and were the highest paid.