This is a great point. Non-compete agreements reduce risk of losing otherwise unprotected information to a competitor and probably increase retention of valuable employees. So preventing employers from using these agreements would increase risk and turnover, and employers might (read: probably would) decrease offered compensation in response.

Now, this effect might be dwarfed by the upward pressure on compensation caused by greater availability of alternative jobs for employees, but it’s not obvious to me that would be the case. I’d be interested to see some empirical studies on the subject.