I think instead he's saying that in a "normal" job market it's possible to higher server admins of lesser experience for lower pay and suffer through the consequences of having to train them up and get them proficient. There's good business reasons not to do this but that doesn't make it any less of a normal job market

There are 3 other variables to consider:

1. How low a quality of service are customers willing to bear, trading off price and quality?

2. What is the supply of such lower-rate employees who can continue feeding the beast, once the trained employees become too expensive for the company to keep? If they could afford to keep well-trained employees, they probably would be able to attract good employees from the get go.

3. How good is the company's employee retention rate for keeping well-trained employees without significantly raising salaries?

But it's a normal assumption on this kind of discussion to deal with employees of the same quality. You can always pay lower and get less.

If that were a normal assumption, we wouldn't be seeing otherwise decisions in the real world so frequently.