This is an extended version of an article published in the anthology Integrating Immigrants into the Nordic Labour Markets, Calmfors. L. and Sánchez Gassen, N. (eds.), Nordic Council of Ministers, Copenhagen, 2019.
Most Nordic countries struggle with the integration of low-skilled immigrants. Relying on research from primarily the Nordics, we discuss to what extent minimum wage reductions can improve labour market prospects for immigrants, whether unskilled and low-pay jobs serve as stepping stones to more qualified and higher-paid jobs and how wages of incumbent workers would be affected by lower minimum wages. We argue that targeted minimum wage reductions aimed at new, previously non-existing jobs and increased differentiation of minimum wages according to experience provide an appropriate balance between the conflicting goals of high employment and low wage inequality.
