> Loosening restrictions on sponsorships would invariably result in a net increase in the available labor pool, which would put downward pressure on wages for everyone.
The labour market doesn't work like that..
The labour market doesn't work like that..
In the tech industry the opposite happens. Demand is higher than supply so you're forced to hire somebody who already has a job. The only way to convince them to switch is by paying them more than they already make.
Also, aggregate demand has more to do with central bank policies than the real economy.
Yes, in each particular occupation, an influx of people willing to work for less might lower salaries in that occupation (compare game programing vs CRUD apps; or magazine journalism vs lawyers), but that doesn't exert downward pressure on everyone's wages.
In addition, if it's easy to start up new competing companies, the employers are forced to pass on the savings.