Does downwash increase or reduce lift generation?
Downwash is behind the wing and is the result of pressure differences between the top and bottom of a wing.  Although the energy conservation bookkeeping says the plane goes up and the air goes down, the main driver of lift is pressure differential.  True to Bernoulli, the angled bottom wing slows and increases air pressure beneath the wing.  This is "bottom lift" that even simple flat plates have.

Airfoils also deflect air upwards and away from the top of the air foil, creating additional lift above the wing.  Downwash is created by the movement of air from higher to lower pressure as the wing goes by, filling the void where the wing was.  This constant process is known as circulation.

Ground effect may not be directly related to downwash, but may be indirectly, as the ground and the downwash stream may create enough of a "fence" to slightly raise the pressure under the wing.  A Cessna 172 has a wing area of $174 feet^2$.

$174 feet^2 × 144 inches^2/foot^2= 25056 inches^2$

A pressure increase of 0.01 psi from ground effect adds 250 extra pounds of lift!

Ground effect is also said to be caused by the wing tip vortices being disrupted by their proximity to earth.