> ... at pay far lower than they're used to ...

Is this saying something more about the relative expectation of compensation bands?

New grads are unlikely to have a comparable benchmark.

People who've worked in Big Tech and finding themselves applying to regular companies where the revenue per employee is in the $200k range are likely going to have difficulty adjusting to such.

I work in the public sector and make very low six digits. Others I know have compensation that is 3x or 4x what I make while working in technology industries.

If both I and the people I chat with were to find themselves suddenly out of a job, I suspect I'd find an acceptable job elsewhere more easily than they would because anything I did would be a pay raise while anything they took would be a pay cut. This in turn translates to that I would be the less risky candidate (that I wouldn't be looking for a new position that would pay more within the year)... and thus I believe not only would I be more likely to accept the job I would also be more likely to be extended the position.

Browsing reddit there are a lot of people on cscareerquestions (and similar) who have the mindset of FAANG or bust as a new grad. That they wouldn't even consider working at a company like Little Cesar's or Home Depot despite those companies having open positions.

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Furthermore, this gets into a lemon market situation ( https://en.wikipedia.org/wiki/The_Market_for_Lemons ). Where it becomes harder to distinguish a good candidate for a poor one and that can only be found out after someone is hired, the companies that have people are more afraid of hiring a lemon than so don't hire anyone. This further depresses the market for the highly skilled candidates. Additionally, people who are skilled are less likely to look for a new job because the market is depressed and they're not as likely to get a good position afterwards.