> Theoretically speaking, labour shortage should affect economy in a way that wages rise to attract more people, right? Why aren't we seeing something like that

> Theoretically speaking, labour shortage should affect economy in a way that wages rise to attract more people, right? Why aren't we seeing something like that? Because attracting more people into the labor market assumes that there are people sitting on the sidelines, waiting for higher wages. The labor force in most western countries is already tapped out, exhausted and cannot do any more work.