Wages of Unskilled Labor

The alleged connection between immigration and native’s wages is much discussed, with research mostly rejecting the idea of large-scale and broad wage-effects. Many studies of its effects on wages usually yield negligible effects, if any, and even in some cases the reverse sign. Yet meta-analysis shows significant effects on low-skilled workers—with those effects most heartily felt by similarly-skilled recent immigrants—which in the United States often mean those without a high school diploma (Longhi et al. 2010, pg. 827-829). George Borjas claims that immigrants, due to their vast numbers, redistribute five-hundred billion dollars every year from the poorest workers in the United States to their employers (Borjas 2016). He also contends that high school dropouts have lost about four and a half percent in earnings due to immigration from 1979 to 1997 (Borjas et al. 1997, pg. 65-66). Evidence from the Norwegian construction sector yields a similar result. Relying upon low- and medium-skilled workers especially, the relationship between immigration share and wages is inverse; foreign- and native-born workers seem to behave as substitutes (Bratsberg et al., pg. 1202). Even if for the average wage-earner in the United States’ immigration has little wage effect, there still seems to be a noteworthy effect on unskilled labor’s wages.

Lower wages for those with less education and fewer skills is not a positive outcome from the perspective of public policy. This aspect of the remittance regulation proposal entails establishing a remittance cap inversely related to a region’s unemployment rate among those without a high school diploma relative to the national unemployment rate for the same group. An area with an overabundance of unskilled labor, as measured through the unemployment of the region relative to the national average, would face lower remittance caps in order to disincentivize new immigrant labor to enter an area already struggling. Collecting unemployment rates for those not holding a high school diploma would have to be done on a regional basis, and then compared with the national average. This factor would only apply to those immigrants who have less than a high school diploma, with all those higher educated exempt--barring a new trend of higher-skill immigrants causing unemployment among their similarly educated peers.