This assumes that the market rate is constantly increasing. Given the amount of job losses that have occurred recently, there may be talent available at a cheaper price.
If a company has had somebody stagnant for years (many years), they're not going to be replaced for cheaper. The crash might cancel the last couple years of inflation at most.
Also, the employee is much more experienced now (could go from junior to senior over 5 years). Will the replacement be equally experienced or starting from scratch again? A fresh experienced hire is certainly more expensive than what the employee was originally earning.