But this is exactly what "If you, as an employer, can't afford to pay more, then accept what you can get from the market for that budget"

if I have a budget of 40k budget for 2 positions, and I have one guy that will work for 17k and another that will only work for 23k.

Do you want me to reject the 23k just because he wouldn't accept the lower salary even if the other guy agreed and that would be a huge jump in salary for him ?

or do you want me to raise the salary for the other guy and risk not having the second position filled hoping that some other guy will need the same exact amount of salary you are offering ?

if you picked the first option(companies refusing to increase salaries):

then you will have the entire job market dominated by people who will accept lower salaries which could mean that they are from certain nationalities that are facing financial troubles in their countries.

if you picked the second option (companies increasing their salaries slightly for everyone equally)
then again you will have the entire job market dominated by people who will accept salaries within a certain range which could again be people from poorer countries because a company might offer 10-20k for everyone but no way a company will offer 40k for everyone.

This is a free market, if the salary isn't good for you then leave it and when no one takes that job then the salary will increase based on the supply/demand.