Idk man. I think that if everyone at the bottom was given raises (the cheap labor vanishes with the immigrants being deported or stopped from coming in) then more spending would happen and more goods would be purchased and businesses would see an opportunity to make more money and therefore raise prices.
I'm not super knowledgeable on this stuff but my common sense and logic are pretty strong suits of mine and they are telling me this would happen. Definitely could be wrong though.
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You aren't necessarily wrong. Muscle labor goes where muscle labor is cheapest. That said, it's a bit more complicated due to legal issues and the international market. There is a reason why the US, some Asian, and European markets maintain a certain GDP and average income despite economic drivers changing from agricultural to industrial to service-based. That said, certain factors come into play such as the amount of currency involved and
demand for that supply. We're seeing that now where housing prices are starting to fall in certain areas and mortgage rates are dropping without the Fed dropping rates. It's because no one was buying homes. The supply can outstrip demand, but the demand will never outstrip the supply (in general) if folks can't buy up that supply.
That said, the powers that be which govern a society need a portion of that pie to make society function. How much of that supply the government gets matters a great deal because they are at the front of line and are paying for the bar mitzvah, which leaves only so much for the rest of the fam. That said, it's something of a misnomer to say that cutting taxes in general spikes an economy. Short term shot, yes, but the government still has its own bills to pay and, trust me, they will make due on those bills. What matters is a rational tax structure and spending policies. This is why the 90s were such a boom time without a subsequent depression to follow. Because, despite all the dysfunction in the WH and potshotting by Republicans and Democrats, there was a balanced budget and things were smooth economically speaking. So no one cared if Billy-boy got a hummer or not.
All that aside, supply and demand have more factors than just product and wants.
