I’m surprised to hear that pilots are in short supply. I started learning to fly as a hobby and I saw many videos about how hard it is to get a job at a commercial airline. I got the impression that there is more supply than there is demand.

Pilots aren't in short supply. Pilots willing to accrue $40k in dept for the necessary education to then get paid $25k a year are very much in short supply. Many regional pilots are on food stamps. This is the reason I currently write software instead of flying commercial airplanes.

The going rate for training to commercial level in the UK is £120k. I wonder what accounts for the difference. Pilot wages are higher than the $25k you mention. Are those regional airlines subsidising the training?

Shouldn't wages increase with demand? Why aren't they?

If only the market was as simple as this. The reason as with many things lies with the fact that when an industry has a small number of large employers, they can conspire to cap wages fairly easily without ever actually speaking to each other, and indeed it probably happens without any illegal conspiracy, just them banking on each other to not undercut.

It's been years since I was a student pilot, but it doesn't look like things have changed much. Back then, there were many commercial pilots at the low end, making peanuts. Only at the middle & upper levels do you really start to make money

It's a similar situation to National Park Rangers: there are so many people willing to do the job that wages are very low.

Why the World is Running Out of Pilots:

https://www.youtube.com/watch?v=cognzTud3Wg

Edit: I'm not a pilot, just a kid that never grew up and likes airplane stuff...

Getting the necessary time in complex aircraft has gotten almost prohibitively expensive. I also believe the military is creating less pilots as a result of having fewer and fewer airframes. I wanted to be a pilot and pursued an Air National Guard C-17 squadron, but to get the hours they were looking for would have required me to be independently wealthy. And if you go the civilian route, you end up flying for a regional with hopes it doesn't get bought out before you get enough PIC time to be competitive for one of the majors. And that is while making 20k-30k anually for 5-10 years.

Depends where you are. In Asia this is very true, in North America it's not true at all. Source: I'm a pilot.