That is exactly what capitalism is about. Prices being driven by supply and demand. Companies certainly try to pay the minimum they can get away with, just like workers look for jobs that pay them the maximum they can find. Companies are not generous (although some claim they are), and workers aren't either. But the competition drives the prices and, in the case of jobs, the salaries. If you are productive, you'll be in demand, and you'll be paid handsomely. If you are productive but live in communist Soviet Union, you'll get very close to whatever else gets in a similar job.

I think you're thinking of a Market Economy.

https://en.wikipedia.org/wiki/Market_economy

Capitalism is about the private ownership of the means of production and profits.

But yeah, competition for labor (and other things) via differences in wages are attributes of a market economy.

Capitalism can be a healthy part of this, but sometimes it isn't.

Crony capitalism for instance can provide companies the opportunity to collude so they can artificially suppress wages, which distorts the market economy for labor.

https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L...