Yeah, but there's a soft form of collusion going on. If we live on an inescapable island of 1000 people, and I have 200 jobs, and you have 200 jobs, and Bob has 200 jobs, then the fact that you and Bob pay twice as much doesn't matter. You guys only need 400 workers, total. Those 600 other workers will be left to compete for the 200 jobs I have.

I still get to name my price. And once you see that I can undercut labor costs due to this, it makes no sense for either you or Bob to continue paying twice as much as I do.

And let's not pretend that if you don't have the very best workers, you can't compete. First of all, you can't identify the best. You hope to get lucky, but in reality, you're going to be paying not the best, but those adequate enough to perform the job reasonably well.

COVID assistance has changed the game. Because before, the choice was to have a job or starve homeless. You'd take almost anything in desperation. Remove desperation and people stop acting desperate.