Very well the wages might fall much quicker than the costs so for a handful it will be beneficial, for the rest not so much.

I think it is funny that some people down voted my own correction for my own comment. People hit the down vote button so fast they don't even think about it.

(someone below said you could edit your comment, and that is true, but it is hard on the phone).

The reason there is a scarcity is precisely the fact that multiplying availability is not easy, i.e. training is long and/or hard and/or expensive.

If you find yourself in a lucrative, scarce job, just make sure it's hard enough that it will always be that way...

I don't see how a reduced job supply would lead to higher salaries.

Money is the tool used to incentivize people to do things.

The idea of increasing the supply is to bring the equilibrium in line with most other industries which is where labor supply generally greatly outpaces business demand. This not only helps drive wages down, but also enables companies greater control over their employee. For instance in tech there is massive turnover. Since employees are in high demand, they can and do job hop much to their own benefit. When employees are less in demand a job becomes more sacred which increases employee "loyalty" giving the company more power to do as they see fit. As but one example employees are going to be less inclined to object to dubious corporate behavior, which has become a running theme at Google, when said employees attach an extremely high value to their job.

What would happen however is that no-name shops who can't offer all that much would be able to hire top quality people. And while that's good for them, I see this no better than the current state of the job market where it's increasingly common to see that the guy serving your coffee has a college degree, and the mountain of debt that entails. Labor oversupply benefits companies and hurts employees. In a 'big picture' view, this is probably a good thing since marginalizing labor means more companies can grow and compete which benefits everybody in the longrun. But from the perspective of labor, it's obviously not a good thing.

It is not just about the absolute scarcity of resource, it is about the ratio between bad and good. Needle in a haystack problem.

Cool sounding jobs (e.g. actor) have an over-supply of labor because people are attracted to it on the basis of either passion or prestige instead of expected earnings. This drives down wages unless there's a regulatory body that artificially constrains supply (e.g. the case with surgeons).

There's an under-supply of tradespeople because it's gritty work, not very high prestige, and rarely lines up with anyone's passions. This drives up wages. It's also a very difficult thing to scale due to geographic and other constraints, so it doesn't have a winner-take-all dynamic. The result is many a large number of tradespeople that each get compensated very well.

Salaries cannot be increased ad-infinitum. Even an extraordinary candidate's potential contribution can add so much value, since it is constrained by the way it fits in the business (and ultimately by the market for the product/service your team is helping to provide).

Requirements cannot be decreased arbitrarily either. The relationship between skill and value added is non linear, and may fall rapidly into the negatives below some threshold (it takes more time for a mentor to teach a rookie how to do things than to do things himself, borderline incompetent employees make costly mistakes, etc).

So, we are basically in a situation where a market cannot sustain itself (Paul Graham wrote about this in one of his essays, the example he used is how this same forces drove out the existance of butlers). So, in this sense, I believe shortages of labor are very real.

This is all aside from the difficulty of grading devs to establish different salary levels, of course. I personally don't think my salary is too high ;-)

First of all, you have to ask yourself why there is a labor shortage. If the underlying reason is insufficient pay, then sure, increasing pay will fix it. This is often the case for fungible talent -- incentivize something enough, and people will shift resources to it. However in many situations, certain types of work are not fungible.

There are natural barriers to entry and qualification issues. Surgeons, for instance. You can incentivize and compensate all you want, but the fact is, not everyone is cut out to be a surgeon, so you have a funneling effect. It's not even a matter of pay.

Then there's desirability issues. Deep sea welding is a highly specialized (and dangerous) trade that pays handsomely, but not everyone wants to do it.

Some physically demanding jobs also have natural attrition issues in spite of compensation. When the inflow of talent is smaller than outflow over a long period of time, a shortage results.

There's also a training and timing issues. Let's say it's 2011 you want someone who can build the kind of infrastructure that powers Netflix, in 6-12 months. The talent and experience pipeline would still have been brewing at the time, so there's going to be a temporary shortage of talent and experience until folks gain experience and mature in the field. In that instance, you can still hire and grow personnel over time, but there would still be a shortage of existing talent.

Talent pipelines take time to build, are highly dependent on talent pools available and the ecosystems around it. Just throwing money at the problem doesn't always work. Compensation is just one end of it (the opportunity end); there are also significant long-term investments needed on the other end (the cradle end, which includes education, development, etc.). Texas Instruments did this -- they funded what eventually became UT Dallas... but it took many many years and the outcome was uncertain.

There's geographic issues. To use an extremely unlikely example, let's say you wanted someone at the level of Jeff Dean or Sanjay Ghemawat, but you would need them to relocate to Podunk, Iowa. Very few people at that level would want to relocate for any amount of pay, hence a shortage. I realize this is a pretty extreme example, but I worked at a company in an undesirable part of the country and it was difficult to get truly talented folks to move out there even with significant premiums on compensation. Now you can keep increasing compensation until you get someone who's willing to move, but they're usually not the kind of talent you were looking for in the first place. Also there's a break-even point at which the compensation doesn't make sense for the value the position is likely to generate, so companies will just not hire.

My point is there are all kinds of real and complex reasons why increasing compensation alone will not solve all shortage problems.

Because if the work is easy, and there's high demand and high salaries as a result, tons of people will flock to that easy work and the increased supply of workers would drive down wages.

I think most people actually believe in supply and demand, and that it has nothing to do with effort.

Most people intuitively understand that if someone is not easily replaceable, they have more leverage. If there is a line of replacements out the door, they have little leverage.