How does that work exactly? If no one is willing to pay higher salaries then the salaries aren’t higher. Senior people would presumably take junior pay over unemployment.
Junior developer salaries here are low enough that people just change industry. It's also not just about the salary but the way that they work. That all being said there are start ups out here that do look for experienced devs and pay accordingly, my previous comments mostly relate to large local businesses.
Some companies tend to hire only junior devs for junior positions. The argument is that, once hired, senior people complain about being paid lower than a less experienced dev. Some management does not want to deal with that. I know it sounds stupid, but that is what I've heard from some of my seniors.