From an economics perspective, unless the hiring of more software engineers results in an increased demand for software engineers (i.e. there being a significant latent demand), H1B absolutely then lowers the earnings potential of engineers. Especially those earning more towards the middle and bottom of the market.
I'd also add that BLS data suggests that this induced demand isn't true. As the projected employment growth for engineers between 2016 and 2026 is 600,000 where there are around 60,000 people graduating with computer science bachelor's degrees every year in the US and even more getting masters or doing bootcamps.
There aren't 60k people graduating with computer science bachelor's degrees every year in the US from any source I can find: https://datausa.io/profile/cip/110701/.
I'd also add that BLS data suggests that this induced demand isn't true. As the projected employment growth for engineers between 2016 and 2026 is 600,000 where there are around 60,000 people graduating with computer science bachelor's degrees every year in the US and even more getting masters or doing bootcamps.