If the law of Supply and Demand dictates that high demand + low supply = higher prices/rates, why aren’t companies/industries suffering from large scale labor shortages offering suitably higher wages to mitigate the shortage? Contrarily, some of them seem to be figthing this obvious solution tooth and nail. Shouldn’t any businessperson worth their salt realise the labor market has changed beyond their control?
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Businesses are not obligated to operate. If they start having to spend more to make their product than they can sell it for, they simply scale back or shut down, either temporarily or permanently. In this way, businesses will never pay wages that are so high as to make it unprofitable for them to operate.
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