Abstract
This paper econometrically compares the subminimum wage propensities of immigrants and US natives using 1989 microdata. A conventional expectation is that immigrants are more likely to earn subminimum wages because of their lesser education and knowledge of labor rights. However, immigrants also tend to participate full time in the labor market and field studies suggest they provide employers an 'experienced' labor pool. Indeed, our findings indicate that immigrants by age, sex, and race/ethnic group are less likely than natives to receive subminimum wages. These findings imply that the foreign born do not contribute disproportionately to the informal economy.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Abraham, K. & Farber, H. (1987). Job duration, seniority, and earning, American Economic Review 77(3): 278-297.
Ashenfelter, O. & Smith, R. S. (1979). Compliance with the minimum wage law, Journal of Political Economy 87(2): 333-350.
Bailey, T. R. (1987). Immigrant and native workers: Contrasts and competition. Boulder, CO: Westview Press.
Borjas, G. J. (1990). Friends or strangers: The impact of immigrants on the U.S economy. New York: Basic Books.
Borjas, G. J. (1991), Immigrants in the US labor market: 1940-1980, American Economic Review 81: 287-291.
Cain, Glen C. (1986). The economic analysis of labor market discrimination: A survey, pp. 693-785 in O. C. Ashenfelter & R. Layard (eds.), Handbook of labor economics, Vol. 1. Amsterdam: Elsevier Science Publishers.
Chang, Yang-Ming (1992). Noncompliance behavior of risk-averse firms under the minimum wage law, Public Finance Quarterly 20: 390-401.
Duleep, O. H. & Zalokar, N. (1990). The measurement of labor market discrimination when minorities respond to discrimination, pp. 181-199 in R. Cornwall & P. Wunnava (eds.), New approaches to economic and social analyses of discrimination. Now York: Praeger Press.
Ehrenberg, R. G. & Schumann, P. L. (1982). Compliance with the overtime pay provisions of the fair labor standards act, Journal of Law and Economics 25: 159-181.
Ehrenberg, R. G. & Smith, R. S. (1988). Modern labor economics: Theory and public policy, 3rd edn, Glenview, IL: Scott, Foresman.
Freeman R. B. (1993). Minimum wages-Again! Paper presented at the Conference on Economic Analysis of Base Salaries and Effects of Minimum Wages, Aix en Provence (France), 30 September to 1 October 1993.
Freeman, R., Gray, W. & Ichniowski, C. E. (1981). Low cost student labor: The use and effects of the subminimum wage provisions for full-time students, pp. 305-335, Report of the Minimum Wage Study Commission, Vol. 5, Washington, DC: US Government Printing Office.
Friedberg, R. M. (1991). The labor market assimilation of immigrants in the United States: The role of age at arrival Mimeo Cambridge MIT, 25 November 1991.
Grenier, G. (1982). On compliance with the minimum wage law, Journal of Political Economy 90: 184-187.
Griffith, D. & Rusten, D. (1992). The impact of the 1986 Immigration Reform and Control Act on the US poultry industry: A comparative analysis, Policy Studies Review 11: 118-130.
Haugen, S. E. & Mellor, E. F. (1990). Estimating the number of minimum wage workers. Monthly Labor Review 113: 70-74.
Katz, L. F. & Krueger A. B. (1992). The effect of the minimum wage on the fast-food industry, Industrial and Labor Relations Review 46(1): 6-21.
Klein, B. W. (1992). Real estimates of poor minimum wage worker, Challenge 35: 53-55.
Lott, J. R., Jr. & Roberts, R. D. (1989). Why comply: One-sided enforcement of price controls and victimless crime laws, Journal of Legal Studies 18 404-414
Meisenheimer II, J. R. (1992). How do immigrants fare in the US labor market?, Monthly Labor Review 115: 3-19.
Neumark, D. & Wascher, W. (1992). Employment effects of minimum and subminimum wages: Panel data on state minimum wage laws, Industrial and Labor Relations Review 46: 55-81.
Neumark, D. & Wascher, W. (1993). Minimum wage effects and low-wage labor markets: A disequilibrium approach. NBER Working Paper No. 4617.
Petersen, T. (1985). A comment on presenting results from logit and probit model, American Sociological Review 5: 130-131.
Portes, A. & Sassen-Koob, S. (1987). Making it underground: Comparative material on the informal sector in Western market economies, American Journal of Sociology 93: 30-61.
Schenker, N. (1993). Undercount in the 1990 census, Journal of the American Statistical Association 88(423): 1044-1046.
Schoepfle, G. K., Perez-Lopez, J. F. & Griego, E. (1992). The underground economy in the United States. Occasional Paper Series on the Informal Sector, No. 2, US Department of Labor and Secretaria del Trabajo y Prevision Social de Mexico.
Sellekaerts, B. H. & Welch, S. W. (1981). Violations of the fair labor standards act: Inferences from the 1979 noncompliance survey, pp. 77-163, in Report of the Minimum Wage Study Commission, Vol. 3. Washington DC: US Government Printing Office.
Sellekaerts, B. H. & Welch, S. W. (1984). An econometric analysis of minimum wage noncompliance, Industrial Relations 23: 244-259.
Sorensen, E. & Enchautegui, M. E. (1992). Immigrant male earnings in the 1980s: Divergent patterns by race and ethnicity. The Urban Institute's Program for Research on Immigration Policy Paper 21.
Trejo, S. J. (1993). Overtime pay, overtime hours, and labor unions, Journal of Labor Economics 11: 253-248.
US Department of Labor, Employment and Standards Administration (1993). Minimum wage and maxi:mum hours standards under the fair Labor standards act. Report to Congress required by the FLSA, Section 4(d)(1).
Woodrow-Lafield, K. A. (1993). Net immigration and census coverage evaluation. Mimeo, Albany: State University of New York.
Author information
Authors and Affiliations
Rights and permissions
About this article
Cite this article
Fry, R., Lowell, B.L. The incidence of subminimum pay among native and immigrant workers. Population Research and Policy Review 16, 363–381 (1997). https://doi.org/10.1023/A:1005784715835
Issue Date:
DOI: https://doi.org/10.1023/A:1005784715835