Earlier quoted context omitted.
First of all, this is a non-sequitur. Market prices can go up or down while scarcity still exists. Scarcity is simply a situation where a lot of people want a good or service, but not all of them can have it. Secondly, your claims about market prices are not even directionally correct. Real wages have dropped because compensation has shifted from wages to benefits. (This effect is larger at the bottom, since non-wage…
If we're talking about economics, I'd say that a 'scarcity' which isn't pushing wages up isn't a scarcity worth thinking about. Money talks.
If taxable wages are preferable to non-taxable benefits, should we eliminate the various laws (e.g. Obamacare, 401k) that push employers to provide benefits rather than wages?
Also, there are many market distortions that won't push wages up but will still create scarcity. For example, we could simply ban food vendors/cigarette walas/etc, or we could impose various occupational licensing rules that raise wages for some while lowering them for others. Why are those not worth thinking about?