If you follow my comments from the conditions whatever describes, it most definitly would lead to increased wages.Zergling,
I'm not sure that it would lead to an increase in wages as it would be a war of attrition. Who would break first? Those who needed the work done or those who needed the money it would provide? I think that over time the wages would rise but in the case of America I think that's well overdue.
In general, the wages might not increase right away, or the amount of jobs for non-immigrants, but they would go up at some point. Illegal Immigrants do a lot of jobs that people in the U.S. who hire them will not do themselves, but still heavily want done, so it is very unlikely that such people would wait a long time for people to agree to work for such bad wages.