You have a very good point about the "blackmailing". I have seen that in direct action with employees of large banks here getting access to cheap credits. Of course, those that fall for the trap then cannot leave, because the interest rate is tied to the employment. Obviously, that is an extreme case, but the more general principle you describe applies nicely. People used to be kept in line by the fear of "God", now they are kept in line by the fear of losing their material wealth. Funny how both approaches seems to work pretty much the same.
I have not thought about this that much, because I am not affected. I am nicely in the plus and have no dependants I need to care for. Hence I am one of the factors that makes populations shrink slowly. But quite frankly, I do not feel bad about that at all. For one thing, we have massive overpopulation on this planet. For another, all my retirement will be paid for by money that I paid into the respective insurances, not by tax money. And finally, I see massive, massive waste and inefficiency everywhere. The smaller generations can easily hack it if those inefficiencies are just a bit reduced. Obviously that also means that some really big egos need to be deflated, but that is in no way a bad thing.
As to employers having to compete for workers, damn right. But somehow the economics graduates do not understand what a market is and how it works. I just quit a side-job where they will not be able to replace me and that was because of stupid demands from one of those economics grads. When I told them some time back that they usually would not even have access to somebody on my level of expertise (quite true, they only got access to me by a partnership), and that if they continue this funny business I would leave, they just tried to sabotage the conversation. These people are not rational. They somehow think they own employees (i.e. a "slave holder" model) and that the whole thing is not a market. I guess these will have to grow up now and face reality. I see that as a good thing.