What does capitalism's competition do for unskilled labor?
The capitalist would say:
In a capital society, each individual earns as much as his abilities will warrant. An unskilled laborer has no ability...hence, very meager pay.
The often overlooked element to this...is the fact that a capitalistic system allows unskilled labor to BECOME skilled through low market entry.
So, in other words...a teenager who can barely man a gas station register....won't make very much at all. But, because capitalistic system allow him to be paid less...he has a very good chance of being hired.
When hired, he develops skills (stocking, ordering, retail, cash handling, customer experience, etc), which are then marketable and will increase his pay.
In socialist systems...his pay is predetermined. In American society, we have an element of this called Minimum Wage.
The current Minimum Wage in Oregon, for instance, is $8.80/hr come next January. However, an unskilled worker isn't worth that much money. And that means, only skilled workers will get the position. Unskilled are left out of the equation, or they are substituted by illegal activity (illegal labor or "under the table" transactions).
Whatever the case, it becomes a barrier to low entry workers, rather than a boon to them.
A capitalist would suggest that eliminating Minimum Wage, would allow thousands of low skilled labor (particularly the young and ethic minorities) to get a fair shot at the labor market. They wouldn't make much in the short term, but it would vastly improve their prospects going forward.
The market will always pay what a person is worth. If a person is getting short-changed, they are free and (very often) encouraged by other employers to leave their employer, and seek a new position with better pay.
A company that retains it's people, has a distinct competitive advantage. And the best way to keep your people, is to treat them humanely and give them their fair salary.