I disagree with your conclusion, you have several flawed premises.

The market has been slowly shrinking into fewer and fewer hands over time, which is why it has become more competitive over time. This has also led to cooperative behavior among the large marketshare companies in the sectors to disadvantage competitors, and employees.

Companies do not bid up to the max they can, because the executives take their cut first. The companies bids can only ever be the max of what is left after that, and varies by the greed of those people.

Interest rates would be the shock you described, but Tech unemployment as far as I can tell has until now been bulletproof, and uncorrelated with interest rate rises or falls. Its not rational to assume this market shock is a result of interest rates, AI is the only competitive alternative.

The issue is not that you're getting fired. Its that you can no longer get base goods needed for survival arbitrarily and without notice, and without capital reserves which are finite you are living on the street.

When the entire market as an entirety is contracting, there are no new jobs to move to in other fields.

Worse, the concentrated market is naturally incentivized to impose high costs on any job seekers to interfere in labor relations to create barriers to entry for competitors while suppressing wages for prospective workers.

This natural progression occurs when anti-trust fails, and money printing makes it worse potentially leading to either deflation (a collapse to non-market socialism) or hyper-inflation (a collapse to non-market socialism). Debt issued as preferential loans from a money-printer makes a company state-dependent/controlled apparatus even if its claim is that it is held privately.

The economy today is worse than 2008, much worse then the dotcom bust, and if you plot the trend with good data going back and starting around the 1970s, the trend shows progressive ruin as time passes, with seiving and consolidation occurring regularly. That is the force driving this problem, and it doesn't enable tech salaries.

> There should also be some reasonable government provided safety net so people can reskill/learn.

There is a limit to what government can provide, it takes awhile to get to those limits (we're in a super-cycle going back to the 1920s) but we'll be there in the next 5-10 years thanks in large part to deficit spending and the FED picking winners and losers.

The main issues with academia also applies to government. They are structurally the same. Education today is not about learning skills, that is always secondary to instilling the qualities a loyal unthinking worker. That is what the entire prussian-model of schooling is about (which is what we have in this country).

These structures for training follow the same structure as guild socialism, and the same intractable failures (ref Mises for related details).

It inevitably ends up being a cult of qualification, where you are automatically considered unqualified without a piece of paper even if you have the actual skills to do the job. Once a target market size is identified and reached, new candidates are put on an endless escalator of suffering with arbitrary filters/requirements where the claimed outcome is nothing but an unobtainable pipe dream.