Use a supply and demand diagram to show how migration affects wages in a high-wage country and a low-wage country
The market for unskilled workers for a high-wage country and a low-wage country is shown above. When the equilibrium wage in the high-wage country is set above that of the low cost country, immigration occurs. The supply of labor in the high-wage country increases and decreases in the low-wage country as workers move toward the higher wage. This change lowers the equilibrium wage in the high-wage country and increases it in the low-wage country until they are equal. The increase in the quantity of labor in the high-wage country causes output in that country to increase, while output in the low-wage country decreases.
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