> If high-skill talent is rare their wages should rise. I do not see that happening. Well, at least not here in Germany. Industry is crying about a skill shortage but the corresponding wages are stagnant.
Businesses resist increasing pay, because that eats into their margins.
Even in capitalist America, SWE pay stagnated until fairly recently. Employers actively fought against increasing SWE pay, even as their shortage was getting worse. They kept wages artificially low, and successfully lobbied the government to fill their openings with cheap H-1B employees - the H-1B quota back then was over twice its current level.
That was a short-term victory, and long-term loss for the industry. If more engineers made $150,000 in SV back in 2005, there wouldn't be such a shortage today.
Eventually this flimsy dam broke, and now we're seeing pay more in line with where it should be according to the supply/demand curve. Arguably it's still not quite there, even in SV, where engineers with their "outrageous" pay still can't afford a home.
So in Germany, apparently employers are still in the "resist and whine to the government" phase. I bet they're begging for the government (i.e. taxpayer) to fund skill-building programs, import more high-skilled workers from 3rd-world countries... the usual stack of solutions.
I'd also suspect higher taxes have something to do with it. Why should I stretch myself paying $120k to an engineer, if he's only going to get $65k out of it? I don't know too much about the taxes in Germany, but I've seen this problem in other foreign locations where we were recruiting: increasing pay did not result in more or better candidates, and all the best candidates were just trying to get to the US any way they can.