The minimum salary requirement to bring non-EU workers was 58k. Now, it will be around 42k. For tech people (shortage occupations), it was around 45k, and they will bring it down to 39k. The basic economics I learnt in school makes me feel that this change will bring down the overall salary of software engineers across Germany because companies want to pay the least amount of money to get max value, and they can hire cheaper workers from abroad due to the lower Blue Card limit.

Theoretically speaking, this won't happen if people don't accept low-ball offers. However, different forces affect micro-economics vs macro-economics. For example, theoretically, if you don't ask for higher wages and just deal with the rising prices due to inflation, it will actually help the economy from a macro-perspective (there will be fewer money chasing goods instead of too much money chasing few goods). However, individual's minds don't work with macro-economics in their head. Similarily, on a large scale, the current market salary of software engineers in Germany will only sustain if ALL potential new employees reject low-ball offers, which is unrealistic.

Here I was hoping that the market salary increases due to the recent inflation. However, the opposite will happen. Living expenses will rise due to inflation and wages will go down due to lowered limit.

Note: this post is purely to discuss economics, not to discuss the politics of immigration, please keep politics out. thank you