By our OTTAWA Correspondent: June 12, 2007: As per statistics department Canada, increased inflow of immigrants over past five years has had adverse impact on the wage rates.
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Though impact on wage rate depends largely on skill mix of new comers, largely the willingness of new immigrants to accept low paying jobs or jobs or even unskilled jobs, is having adverse impact on the wage rate.
Canada is one of he countries that has point based system of immigration where highly skilled immigrants are awarded maximum points. Thus the ration in Canada of persons with at least university degree was four in ten compared to one in five in USA. This is impacting the earning level of native Canadians who are not as well educated.
As compared to Canada, the percentage of immigrants in US is less educated. This is, presumably, because, US immigration policy allows more emphasis on family re-union rather than skill based point system as in Canada. As a result, these newcomer immigrants in US have depressed the earnings of low-paid Americans and increased the gap relative to the highest-paid.
The study explored the impact of the immigration in both the countries, concluded that between 1980 and 2000, immigration increased the male labor force by 13.2 per cent in Canada and 11.1 per cent in the U.S as well as the sizable, statistically significant, and roughly comparable inverse relationship between immigrant-induced shifts in labor supply and wages in these countries.
The differences in skill mixes between Canada and the U.S. are the result of differences in immigration policies during the last four decades as Canadian immigration policies since the 1960s have encouraged high-skilled workers to come to the country while during the same period, US immigration policy has emphasized family reunification, which resulted in a disproportionate number of low-skilled immigrants.
Another significant aspect of the study is that it suggests that that, in the long run, low-skilled workers in Canada have gained relative to high-skilled workers.