The 2000 recession sucked and lasted a while. I remember Intel was hiring web programmers for $12/hour and were getting swarmed with applicants.
In those kinds of environments, contractors do a little better. Employers are all freaked out, they want to get work done but they don't want to make long-term commitments. It's not until they start making noise about contractors being expensive and wanting to convert you to full-time that you know the recession is over.
What happens in times like this and people's issues with wage discrimination for example?
Are there people left at the company still making $50 an hour for a similar role to someone new hired making $20? Do all these salaries get readjusted eventually?
Not at all. Companies generally will just pay you a below market rate unless you can force them into an adjustment. That is a major source of wage gaps actually. People who have the leverage and safety to risk counter offers and renegotiation end up getting paid more than people who cannot take the risk of damaging their reputation or even getting fired over a 30% raise. People with an ample safety net can take a gamble on an unknown new job with a big pay increase also.
In those kinds of environments, contractors do a little better. Employers are all freaked out, they want to get work done but they don't want to make long-term commitments. It's not until they start making noise about contractors being expensive and wanting to convert you to full-time that you know the recession is over.