As long as there isn’t enough people waiting on jobs to easy replace someone, there is room for negation because if the guy packs up, the work won’t be done and no money is made.
Sure, the company can pack up shop and relocate to a different country, but that also has a bunch of costs in itself. It may be more profitable to pay people slightly more - again, negotiation. But again, that is only possible if it isn’t easier to just quickly hire someone else.
You don’t need to believe me, just check how the average hungarian wage increased in the last 20 years. That’s the effect when there aren’t enough surplus workers, so employed people can’t be easily replaced.
It’s literally how it worked. You can check the statistics.