Under normal market conditions, they would hemorrhage current employees to any alternative local employers who raise their wages. But if all local business owners are freezing their wages while unemployment is low, then the liquidity of the workforce freezes, and you get into a weird equilibrium. Workers might want to leave, but there's no alternative that improves their compensation. Businesses are engaged in a natural cartel behavior, but where the incentives to cheat are reversed - the first to raise wages hurts themselves the most.