Immigration depresses wages in Canada and US.

I wonder if the immigration of skilled workers actually reduced the wages or if it is the effect of global competition. Many companies export work to low wage countries and this puts pressure on workers and companies in Canada in the same area of business to reduce labor costs. Even if no immigrants who would work for lower wages had entered Canada the global competition would probably still have forced wages downward. Perhaps both the immigration and the competition work in tandem to reduce wages or at least put pressure on them. Unions seem to be unsucessful on the whole in finding ways to counteract these global effects.
In some areas where there are very powerful professional organisations immigration may not cause downward pressure on wages. The medical profession would be a good example I should think. THere are plenty of doctors who are immigrants but I doubt this caused remuneration of the doctors to be lowered.

Immigration depresses wages in Canada and U.S: report

Eric Beauchesne
CanWest News Service
Friday, May 25, 2007

OTTAWA - Immigration has depressed wages in both Canada and the U.S., but has also reduced wage inequality in this country, while widening the gap in the U.S. Those are the key findings of a Statistics Canada study released Friday which found that a significantly higher proportion of immigrants to Canada than the U.S. are highly educated, increasing the supply of such workers, but lowering their earnings.Immigration was a factor in a 7% drop in real wages of highly educated workers in Canada between 1980 and 2000, the report said.

Low-skilled workers in Canada have also gained relative to high-skilled workers, because the share of low-skilled workers in the labour force has declined, it said.

While the earnings gap between high school dropouts and university educated workers increased to nearly 45% from 38% in Canada over the past two decades, in the absence of immigration that gap would have widened to nearly 50%, it calculated.

In the U.S., however, immigrant labour is concentrated among low-skilled workers depressing their wages, and less so of highly-skilled workers, which served to magnify growth in US wage inequality, the report said.

In 2001, about four in 10 individuals with more than an undergraduate university degree were immigrants in Canada compared to only two in 10 in the U.S., it noted.

There was a significant but relatively comparable inverse relationship between the change in the supply of labour from immigration and in wages in Canada, the U.S. and in Mexico, said the report, which looked at the impact of immigration on wages in the three NAFTA countries between 1980 and 200.

A 10% change in the labour supply due to immigration resulted in a three-to-four-per-cent change in earnings in the opposite direction, it found.

Mexico, however, lost workers to emigration. And, as a result, wages there went up.

“Mexico provides a mirror image of the impact of emigration in a source country,” the report said.

Between 1980 and 2000, immigration increased the male labour force by 13.2% in Canada and 11.1% in the U.S., while Mexico experienced a 14.6% loss.

“The differences in skill mixes between Canada and the United States are the result of differences in immigration policies during the last four decades,” the report said.

Canada has encouraged high-skilled workers to come to the country while the U.S. has emphasized family reunification, which resulted in a disproportionate number of low-skilled immigrants, it noted.

Erin Weir, economist with the Canadian Labour Congress, said the report - on the positive side - suggests that Canada has done better in attracting higher skilled workers than the U.S.

However, that wages here have also been depressed by immigration, suggests that Canada needs to do a lot more to ensure immigrants are fully aware of their workplace rights to protect them from being taken advantage of by employers, Weir added in an interview.

Another “emerging issue” raised by the report is the more serious damping impact on wages of Canadian workers resulting from an increasing trend to bring in temporary foreign workers, he said.

The report also noted that significant illegal immigration to the U.S., especially from Mexico, and the fact that U.S. immigrants tend to be younger than Canadian immigrants, has also contributed to U.S. immigrant workers being lower-skilled than those who entered Canada.

In Mexico, meanwhile, emigration rates are highest among mid-skilled workers, which as a result, has increased relative wages for such workers but lowered the relative wages among the least and most educated.