[evanpw]

This is a valid point, I think the effect will usually be small.

1. If a company is paying above-market wages, then by definition there are more people who want to work there than there are available spots, so the second company will get some of the overflow.

2. The market for a particular kind of labor (e.g. phone techs) is usually much larger than whatever market for outputs these two companies are involved in (e.g., credit-card processing), so one company paying above-market wages is unlikely to change the market wage level very much.

This could definitely break down for some very specialized jobs.