Sure, but you would imagine the Nth week of onboarding to be more important to improving an engineer's productivity on average than the N+1th week. It may not always hold, but it's certainly what my personal experience has been.
>Underpaying a new engineer doesn't solve anything.
You could always take the money you would "save" during the staircase and offer it as an end of year bonus or some such to those who remain onboard. There's no law saying this has to result in lower pay over the long term.
>unnecessarily making their lives harder taking money out of their pocket when they need it most
It's true that such a plan incentivizes people to have some cash saved up so they can weather the first few weeks better, but even if they don't one would imagine a quality hire would be able to get a short term loan at a very good rate, considering the high likelihood that they would be able to pay it back quickly.