Labor Migration and Wage Inflation: Do Foreign Workers Lower Wages?

Labor Migration and Wage Inflation: Do Foreign Workers Lower Wages?

25 March 2026

One of the most persistent arguments in debates about labor migration is the claim that the influx of foreign workers leads to lower wages, particularly in sectors such as manufacturing, construction, industry and hospitality — sectors where migrant participation is relatively high.

However, the dynamics of labor markets are complex. Wage levels are shaped not only by labor supply but also by labor demand, inflation, minimum wage policy and unemployment levels. This article examines whether increases in the share of migrants have corresponded with wage suppression by analyzing data for 2010, 2015, 2020 and 2025.

1. Macroeconomic Context — Wage and Price Inflation

Wage Growth vs Price Inflation

Wage inflation — the rate at which average wages rise — is influenced by a number of factors, including economic growth, labor demand, general price inflation and minimum wage policy. In Poland, nominal wages have risen over the past decade at a pace that often outpaced consumer price inflation (CPI), meaning that real wages (adjusted for inflation) generally increased.

However, price inflation — especially during periods of elevated CPI in the early 2020s — meant that nominal wage growth did not always translate into significant gains in real purchasing power. This context is vital when analyzing wage trends across sectors with varying shares of migrant labor.

Minimum Wage as a Reference Point

The statutory minimum wage in Poland has increased significantly over the years:

  • 2010: approx. PLN 1,317 gross
  • 2015: approx. PLN 1,750 gross
  • 2020: approx. PLN 2,600 gross
  • 2025: approx. PLN 4,244 gross

Minimum wage increases have a direct impact on the lowest-paid workers and exert upward pressure on wage levels across sectors, independently of migration.

Unemployment as a Labor Market Indicator

Poland’s unemployment rate declined markedly between 2010 and 2025:

  • 2010: approx. 12.4%
  • 2015: approx. 7.5%
  • 2020: approx. 3.3%
  • 2025: approx. 4–5% (depending on region)

Falling unemployment indicates heightened competition for workers, which tends to drive wages up rather than down.

2. Migration and Workforce Composition in Key Sectors

Migrant workers in Poland are concentrated mainly in four sectors: manufacturing, industrial processing, construction, and hospitality/services. Their share in employment within these sectors increased significantly over time:

Sector2010 (est.)2015 (est.)2020 (est.)2025 (est.)
Manufacturing~1–2%~4–6%~10–12%~12–15%
Industrial Processing~2–3%~5–7%~13–15%~15–18%
Construction~1–2%~6–8%~18–20%~20–22%
Hospitality/Services~2–3%~6–8%~9–11%~10–13%

These trends reflect sectors with longstanding labor shortages where domestic supply could not meet demand.

3. Wage Levels in Selected Sectors

Below are approximate average gross monthly wages (in PLN) for the relevant sectors across the selected years:

Sector2010201520202025
Manufacturing~3,400~4,200~5,100~6,800
Industrial Processing~3,500~4,300~5,200~7,000
Construction~3,200~3,900~4,800~6,600
Hospitality/Services~2,800~3,500~4,300~5,900
Overall National Average~3,900~4,700~5,600~7,300

All sectors saw wage growth in nominal terms across the period, reflecting both macroeconomic factors and sector-specific labor market conditions.

Manufacturing and Industrial Sectors

In manufacturing and industrial processing, where the share of migrant workers increased most substantially, wages also rose faster than general inflation. This suggests that greater reliance on migrant labor did not suppress wages. Instead, heightened labor demand amid a shrinking pool of local workers drove upward wage pressure.

Construction

Construction had one of the highest increases in migrant participation. Wages in this sector rose significantly between 2015 and 2025, outpacing general wage growth and inflation. Employers, competing for scarce labor, often increased pay rather than lowering it — a pattern inconsistent with the notion that migrants depress wages.

Hospitality and Services

In hospitality and other service sectors, wage increases were more moderate compared to manufacturing or construction. This effect can partly be attributed to the seasonal and flexible nature of employment in services. Still, real wages rose overall, indicating that migrant participation did not cause wage declines.

5. Other Factors Affecting Wage Levels

Local Labor Shortages

The declining number of local workers and aging population intensified competition for labor. Employers often had to raise wages to attract both local and foreign workers, particularly in sectors with persistent shortages.

Minimum Wage Policy

Rises in the minimum wage lifted earnings for the lowest-paid positions across sectors, exerting upward pressure on wages beyond the direct influence of migration.

Price Inflation and Real Wages

Periods of elevated price inflation (CPI) in the early 2020s meant that nominal wage increases did not always translate into equivalent gains in real purchasing power. Nonetheless, adjusting for inflation shows that real wages in all sectors increased significantly over the analyzed period.

6. Key Conclusions

Based on the data from 2010, 2015, 2020, and 2025:

  1. Increases in the share of migrants do not correlate with lower wages.
  2. Sectoral wage growth — both nominal and real — outpaced inflation in all key industries studied.
  3. Wage pressure was more strongly influenced by labor shortages and declining unemployment than by the presence of foreign workers.
  4. Migrants have helped alleviate workforce constraints, allowing firms to maintain production and growth in tight labor markets.
  5. Minimum wage increases and low unemployment played a more significant role in shaping wage dynamics than changes in workforce composition.

Conclusion

Empirical evidence shows that labor migration has not lowered wages in the sectors where foreign workers are most concentrated. On the contrary, migrant labor has enabled markets to adjust amid tightening labor supplies, supporting wage growth rather than suppressing it. The notion that foreign workers drive down wages does not hold up against data when controlling for broader economic and labor market dynamics.

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