You aren’t wrong, but we need to be careful when applying typical market economics to the labor market. It has its own field of study specifically because some of these relationships/intersections breakdown in the employee-employer relationship.
A classic example is the lack of perfect information in the labor market like you see in a commodities market. A more specific example is the wage-fixing scandal that hit tech companies [1]. In this case, the companies used their market power and unified to lower worker wages and stop them from crossing the street for more pay.
I see that example as supporting the idea of supply and demand determining price.
Employers colluded to reduce number of buyers, hence reducing demand, causing sellers to have fewer alternatives to sell their services to, causing them to sell at a lower price than they otherwise would.
There may be more effects due to lack of information or ability to move or issues of social signaling compared to a simple example of widgets, but in the grand scheme of thing, it still follows the same principle.
wouldn't the wage fixing scandal, which was essentially illegal oligopolistic behaviour, be an example of how a larger market, wider area supply/demand relationship would look more like the classic economic model, i.e., this exact case?
There isn’t an open market where the worker can get a clear market value for their salary. The companies hold far more information than each worker. Nuances like this non-clearing behavior, geographic forces, compensating differentials, and monopsonies make labor economics it’s own field of study.
A classic example is the lack of perfect information in the labor market like you see in a commodities market. A more specific example is the wage-fixing scandal that hit tech companies [1]. In this case, the companies used their market power and unified to lower worker wages and stop them from crossing the street for more pay.
[1] https://www.cnet.com/news/google-adobe-apple-intel-settle-wa...