People usually consume a significant part of their income, so they create more demand.

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.