> But arguably any labor shortage can be fixed by just having way higher wages
Not even remotely true, outside of unskilled labour work
> Like if Google is struggling to hire L3 entry level engineers, can't they just offer $1 million/year salary?
They can, but that won't suddenly make more people who are qualified for L3 entry level engineering positions to sprout into existence
It may cause people to re-skill to try and chase those positions.
It probably will have engineers from their competitors come to work for them
But then their competitors are in the same position facing a labour shortage. The shortage hasn't gone away!