Thanks, your clarification is helpful. I think that it's more accurate to say, rather than "employers are unwilling to pay the market rate for labor," that "at the market rate for labor, employers have other options than employing workers."

Either they decide that the work is not worth doing at the higher cost, or they have some way to get it done other than directly hiring people to do it (automating, outsourcing, assigning more tasks to current employees, etc.)