> demand for labor exceeds availability

Employer monopsony can also produce less with fewer people and keep demand for labor below availability. This will also increase prices due to scarcity of the product. Just give me employer monopsony, government in their pocket, and I will give you N ways to screw the workers.

> workers share in those gains

Not gonna happen until workers obtain bargaining power and they are working hard to keep it that way.

> will it devalue labour or not

I agree with Kent Beck here: “The value of 90% of my skills just dropped to $0. The leverage for the remaining 10% went up 1000x.”