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Do minimum wages (whether through minimum wage laws or because trade unions control access to low paying jobs) prevent or cause immigration in Europe? On one hand high minimum wages are attractive for immigrants. On the other hand, immigrants cannot compete by offering to work for less than the natives.

I'm having a hard time getting some clarity on this issue since the theoretical and empirical arguments from different sources can be very contradictory.

And finally, the following question related to the above: In a country with low minimum wages, would the economic elite have incentive to oppose immigration laws so they have access to cheap labor?

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    "On the other hand, immigrants cannot compete by offering to work for less than the natives." - but on the third hand, immigrants might be willing to work a job at minimum wage that natives might not.
    – Lag
    Dec 24, 2019 at 7:42

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The problem with putting all "immigration" in a single bucket is that it leads to all sorts of confusion about who might be affected by what incentives. Non-immigrants also tend to be completely unaware of how the system works. Each EU country has its own rules for non-EU immigrants; I'll use the UK points-based system as a guide. (Yes, the system is already points-based, so anyone promising to "introduce a points based system" is misleading you.)

We can also see the statistics for how many people use each kind of visa.

Tier 1: "entrepreneur" visas. Rich people only. Unlikely to be affected by minimum wage.

Tier 2: general work permits. Mostly require a specific job with an income of £30k (not affected by minimum wage), apart from some specialties which require £20k. Minimum wage is about £15k a year. The NHS is heavily dependent on recruiting nurses through this system, for example.

Tier 3 was never implemented.

Tier 4 is students. No relevance of minimum wage.

Tier 5 is temporary and youth workers. The minimum wage might be relevant here.

Further categories of non-visa entrants are family reunification (I don't think the minimum wage affects who people marry, and in any case there's a minimum income requirement for a spouse visa), and asylum. Asylum seekers are not allowed to work while their claim is being processed, may be subject to detention, and have an uphill burden of proof.

Almost none of these are "cheap" labour, except some of the tier 5 fruit pickers and other seasonal workers.

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  • Once asylum has been granted, minimum wage likely is important. So the minimum wage might affect the choice with which country to apply for asylum.
    – Sjoerd
    Dec 24, 2019 at 16:23
  • Is it now the choice of the seeker as to which country to apply? (I honestly don't know the current rules of the EU in regards asylum)
    – CGCampbell
    Dec 24, 2019 at 16:47
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    @CGCampbell In theory, the Dublin regulations still apply. In practice, they don't. Judges in many countries don't allow sending back migrants to the first country of arrival, because those countries have so many refugees already that the living conditions aren't up to the standards the judges wish. So in practice, many refugees continue their journey inside the EU until they arrive at their preferred country. See e.g. "The jungle" in France full of refugees trying to get to the UK but refusing to apply for asylum in France itself.
    – Sjoerd
    Dec 30, 2019 at 14:13
  • @Sjoerd Gotcha. I thought that was how it is, but didn't know for sure what the aftermath of the mess was. Thanks.
    – CGCampbell
    Dec 30, 2019 at 19:22
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  • For most of the EU, legal immigration for labor purposes is only open to highly skilled immigrants (and of course to EU citizens, who will be subject to all the rules which affect the citizens).
  • On the other hand, illegal immigrants would not be part of the official labor market anyway, so minimum wage would not apply to them. They are often cheated by their employer out of whatever was agreed, too.
  • The way the EU is currently constructed, companies from low-wage countries can send workers to other EU countries and pay the wages which apply in the origin country, not the destination country. (This directive has been under fire, but AFAIK it is still in force.)
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  • Legal immigration for labour purposes is open to all EU citizens afaik.
    – Jan
    Dec 24, 2019 at 23:30
  • @Jan, an EU citizen who immigrates becomes subject to the local labor laws.
    – o.m.
    Dec 25, 2019 at 7:51

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