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Shortages always exist at a given price. If people demand their iphones cost only $100, there would be a massive shortage of iphones.

Same goes for labor: if you pay shit, demand for that job is going to be shit.

Of course on the labor side, part of the "price" is job satisfaction, working conditions, etc. Many more people would rather be receptionists at $17/hr than working in a warehouse or factory for the same rate.

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i think another part of it is whether there's any meaningful difference in value for a mediocre vs good employee.

let say you ran a trucking company and decided that you'd pay more to ensure you cornered the market on 'good' drivers. but... it turns out that your customers don't care if you have good drivers or mediocre drivers, so you can't justify charging a higher rate.

With rates of drivers hitting overpasses mediocre is a high target here.

That's usually captured by "pricing power" (i.e. the ability of a company to increase price/margin vs competitors).

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