Please think about the claims in these two paragraphs:
- In fact, the relationship between immigration and wages is not clear-cut, even in theory. That is because wages depend on the supply of capital as well as labour. Alone, an influx of immigrants raises the supply of workers and hence reduces wages. But cheaper labour increases the potential return to employers of building new factories or opening new valet-parking companies. In so doing, they create extra demand for workers. Once capital has fully adjusted, the final impact on overall wages should be a wash, as long as the immigrants have not changed the productivity of the workforce as a whole.
The argument is that wages go down, but the workforce goes up. But it goes up because you're letting more people in. For the people who were already here and working, what's in it for them? Maybe the economy is a bit more robust, but their wages are down.
- However, even if wages do not change on average, immigration can still shift the relative pay of workers of different types. A large inflow of low-skilled people could push down the relative wages of low-skilled natives, assuming that they compete for the same jobs. On the other hand, if the immigrants had complementary skills, natives would be relatively better off. To gauge the full effect of immigration on wages, therefore, you need to know how quickly capital adjusts and how far the newcomers are substitutes for local workers.
See the italicized paragraph. What facts would you need to see to believe that immigration of low-skilled workers helps domestic low-skilled workers?
