The "free market" model never had much relevance to the real world, and today it is less predictive than ever. This is especially true of labor markets, distorted by decades of neoliberal policy under Republicans and Democrats alike. Corporate combination goes virtually unchecked, and when a few major players dominate an industry, they don't have to compete, even with no active collusion. If any single company offers higher wages, the others have to follow; so nobody begins a process that would result in higher labor costs for all. They may compete for a small number of high-value, highly specialized employees, but the bulk of their labor force is completely fungible.
Even outside the oligopolies, though, workers have become largely interchangeable in most job areas, especially in lower-wage occupations. Much is made of technology's potential to replace jobs, but its greater impact may be in how it makes jobs easier, reducing the skills needed to do them. At the same time, higher educational attainment is expected of today's workers, so jobs once done perfectly well by high school graduates now employ people with bachelor's degrees. A tight labor market is not really a problem when almost anybody can do the job and somebody is willing to take it.
A substantial slice of corporate profits in recent decades came from suppressing labor costs: part-time jobs with "flexible" hours, "gig economy" contract workers, and legal restrictions on labor unions all facilitate the ongoing transfer of wealth from the many to the few. Any economist claiming wages soon will "catch up" with corporate profits is either a liar or a fool.
