Poeple are not fungible, who’s to say that the individual replacing them is of equal value.

Only in a market with perfect information. With imperfect information, the market rate is an estimate of the expected or typical rate for a similar good. Because everyone has access to a different subset of the information, everyone's estimate is different, and companies often end up paying above or below the consensus rate.

That depends on the country. In the US where everything is tied to stock options and employees will jump ship if they get 50 cents an hour more next door, that may be the case. In Aus/NZ you don't have that kill-yourself-for-your-stock-options-and-then-leave culture, if you're not on a barely-subsistence wage where you don't have any choice then people will look at job satisfaction, ease of travel to/from work, and so on alongside what they get paid. I know several guys who have turned down jobs that paid five-figure amounts (this may be a two-figure amount in the US) more than they were currently earning because they were quite happy with their current work environment. Good work environment, laid-back management, the company looked after you (rec room, pool table, beer fridge, after-work gaming, being able to tell the mgt that something wouldn't work and they'd listen to you, etc), not because they saw it as a leash but because they believed in looking after their employees. Some of those guys, and their coworkers, have been at the same company for 20-30 years.

Hiring the replacement ≠ finding the same or better replacement.

Will you be able to find someone in this economy? Sure

Could you fill the shoes? Much harder. Especially in the age of bootcamps, AI to complete exercises, and what have you where people went into IT for the money and not for the love of the craft, tinkering and learning.

So this is not an oxymoron: you can have 200 applicants and not a single good one to replace someone with them.

No, we are not talking about a commodity market with a clear exchange. If an employee is bad at a negotiation or doesn't look around then they may accept a lower salary than another market participant would have offered and if neither side looks around, and is willing to pay some costs of a change then they are making a salary that is different than the current market rate.

I'm not an economist but that implies the market maintains some kind of optimal equilibrium price. The reality probably is very noisy like with everything else. Plus there's asymmetric information on both sides meaning people don't get what they think they do.

> If a company pays below-market, it won't be able to hire anyone. Either the role will remain unfilled, or the employer will have to compromise on experience.

Or they lobby the government for slaves