Wouldn't the lack of supply drive up wages until more new talent is incentivized?

That is the current landscape today. Mainframe engineers are in high demand and good ones are paid quite well.

I've heard from a global bank, they have one mainframe developer in the team who is past 70. She manages a critical credit card service and gets paid in the upper end of 6 figures to work 20 hrs a week. She's the only one who knows that system. Lots of stories like this.