The only situations I've seen where this was actually true is some extremely esoteric ones like certain military occupations and some emergency services. Even then, a lot of the time you can still use shifts, or reorganize the system entirely.

In fact, an oversupply of labor should have made the time problem evaporate. I've seen what some students waste their time on sometimes and it made me seriously scratch my head. I think part of the problem is that nobody is really looking for good labor, which is why there's so much for it. You're not going to get "special forces" people here, like Musk likes to pretend, because that number is so low they have other things to attract them. You'll get people who lost their self-respect somewhere and who will sit pointlessly for too long before they realize how much time they're wasting, burn out, and leave. They're often looking for people who will agree to sit there 24/7 and be the professor's little servants, rather than actually trying to screen for scientific ability. People who are actually as amazingly good as everyone claims scientists should be prefer to work on their own terms, they would never allow someone to boss them around and put time constraints.

There's an oversupply of labor, but I think that oversupply is already not very high quality at this point due to the fact that you are treated better and paid more in private industries. So, I disagree with you, treating people better would actually result in better people going back in and some work actually getting done, and treating people better, as in, paying them more and being more cognizant of their time, would also put an incentive on the payers to be careful with what they throw their money on so they're not going to think it's OK to waste a PhD's time to go grocery shopping (professional housekeeping is a thing, if you want some of that, maybe hire some. Oh, too expensive? Yeah, that's how much you're underpaying the PhD).