Scott Sumner mentioned recently that there is a bit of a geographical issue. There is a lot of demand, for example, for construction workers in the coasts. There are a lot of people who could do construction work in the middle of the country, where there isn't much demand. Getting people to move isn't that easy. Not only is there reluctance to increase wages, but reluctance by workers to uproot their families and move, invest in a new place, etc.
What that really means is those people are too smart to move to high tax , high cost of living areas where they would end up with less .