Final answer:
Several factors minimize the effect of low-skilled immigration on domestic low-skilled workers' wages, notably minimum wage laws, increased local demand driven by immigrants, and shifts to labor-intensive production processes.
Step-by-step explanation:
When considering the impact of low-skilled immigration on the wages of low-skilled workers, several factors contribute to the generally small effect observed. Firstly, there is a legal floor established by federal and state minimum wage laws, which helps prevent significant downward pressure on wages. Secondly, low-skilled immigrants are believed to boost local demand for goods and services, thus invigorating the low-skilled labor market. Additionally, an abundance of low-skilled workers can lead employers to adopt more labor-intensive production processes. These various influences help to explain why the wage effects for native low-skilled workers are commonly minor, perhaps seeing a decline of about 1%.